Toronto actor Nicole Fairbairn.The Globe and Mail
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Toronto actor Nicole Fairbairn entered the pandemic lockdown with long ginger locks. The 50-year-old is coming out of it ready to embrace her now natural salt-and-pepper. It wasn’t just the inability to professionally maintain her hair colour with salons closed as part of public health measures, but the self-reflection and shifting of priorities that she experienced in the face of an urgent global crisis.
“I was one of those people that said ‘there’s no way. I’ll go to my grave with dyed hair,” she says. “But then when the pandemic happened, I was like ‘I don’t want to be fussing around with this. There are more important things.’”
If the proliferation of Facebook groups for “women who dare not to dye,” is any indication, Ms. Fairbairn is far from alone. Dene Moore reports.
How to turn your portfolio into a compounding machine
Reinvesting dividends is a critical part of investing. The purpose of reinvesting dividends is to benefit from the magic of compounding – perhaps the most powerful force for building wealth over the long run, John Heinzl writes in response to a Globe reader question. Compound growth – also known as exponential growth – is no fun when it is working against you. Think of someone paying 20-per-cent interest on an ever-growing credit card balance, or the speed with which COVID-19 spreads through unvaccinated populations. But when compound growth is working for you, the results can be extraordinary.
Is this 50-something couple financially stable enough to pull back from work?
With a house in the Toronto area and substantial savings, Dylan and Darlene, both 57, are eager to retire from the work force. He works full time in marketing earning $184,000 a year and she works part-time in the health and wellness industry earning $5,000 to $10,000 a year. Neither has a company pension. They have two children in their 20s, the younger of whom is going back to university for a second degree. Their target budget in retirement is $105,000 a year after tax.
“I enjoy my work overall, but after 30-plus years, I’m ready to step back,” Dylan writes. “I’d be happy to work part-time after retiring but would ideally do this as a paying hobby rather than as a financial necessity,” he adds.
Darlene plans to resume her work once pandemic restrictions have been completely lifted. They want to stay in their home for the rest of their lives without touching the equity. In the Globe’s latest Financial Facelift column, Ian Calvert, a certified financial planner at HighView Financial Group in Toronto, looks at their situation.
In case you missed it
Lawn bowling: Good for you and ‘more fun than Sudoku’
Mike O’Reilly first came across lawn bowling when the Calgary Lawn Bowling Club moved into his neighbourhood six years ago. He and many of his friends were in search of a new activity.
“We thought, ‘wouldn’t it be fun if we all got together and went out as couples and tried this?’ ”
As Kathy Kerr reports, the sport is growing in many parts of Canada, and the amenities are pretty good, too. Many clubs have facilities with kitchens and liquor licenses and offer fun-oriented tournaments and weekend events. O’Reilly likes that it’s a game he can play well into retirement.
“It was a thrill to find an activity that is going to challenge me for many decades to come.”
Why more boomers are turning to spirituality as they age
Retirement offers time to tend to the spiritual side of life that often gets neglected in the overheated world of work.
“We have spent our whole lives working and building our careers, often at the expense of our families and personal relationships and worked long hours … boomers turned busyness into a virtue,” says Sheila Macgregor, lead minister and minister of worship and pastoral care at Siloam United Church in London, Ont.
“Now boomers are faced with the question ‘Who am I now that I no longer have the job? Who am I now without the title, or staff or colleagues? Who am I without the kids at home?’” adds Ms. Macgregor, who is also the author of Re-Designing Your Life: A Practical Spirituality for the Second Half of Life.
“These are questions around identity and purpose … they’re fundamentally religious questions.”
Whether it involves traditional houses of worship or spiritual practice of various types, religion continues to be of interest to retirees. Kathy Kerr reports.
What else we’re reading
Why people are rushing to retire in Panama
When Erika, a 58-year-old American teacher, told her financial advisor she wanted to retire, he told her she’d have to get creative. She didn’t have enough money to retire in the United States, so she moved to Panama. The country has long been popular among budget-conscious retirees, writes Andrew Hallam, who recently moved there. In 2021, International Living magazine ranked it the second-best place to retire, after Costa Rica. It’s also relatively easy to become a resident, he says.
“In many ways, Panama seems to have it all: modern living in Panama City; cool mountain towns like Boquete and idyllic Caribbean beaches on Bocas del Toro.”
This young couple chose to get married in a retirement home
When Adrianne Hart got married recently, she knew the residents of the Gander retirement home where she works wouldn’t be able to attend the wedding itself. Instead, she decided to bring a taste of the big day to them. As CBC Newfoundland reports, Ms. Hart and her new husband, Joey, left the ceremony, still in their wedding attire, and went straight to Oram’s Bethesda Manor to visit the residents.
“It was so amazing, I don’t even know if I can put it into words,” Hart said in an interview with CBC Radio’s Newfoundland Morning.
“As soon as I walked in, I stepped into the lounge and I had a full house, which I wasn’t expecting. Everybody was clapping and smiling and just, oh, just really warmed my heart.”
Ask Sixty Five
Question: My husband and I plan to retire in the United Kingdom next year. We have RRSPs, TSFAs and equity investments. Can we stay invested in Canada or do we have to liquidate and reinvest in the U.K. market?
We asked Jamie Golombek, managing director, tax and estate planning, with CIBC Private Wealth Management, to answer this one:
There are really two issues here: the tax considerations, both in Canada and the U.K., and the securities laws.
Under the rules, Canadian advisors can continue to provide services to pre-existing clients who move to the U.K., but only on an “unsolicited basis,” with limited exceptions. This means that the advisor can provide investment advice in response to a client request, but the advisor cannot initiate or solicit new investments unless they are transactions in the same type of business that the client was previously engaged in while in Canada.
On the tax side, there is no requirement to deregister the RRSP or TFSA upon ceasing to be a Canadian resident.
RRSP withdrawals will be subject to 25 per cent Canadian non-resident withholding tax. But be careful, because, according to the U.K. tax authorities, no foreign tax credit relief is allowable in the U.K. for the tax withheld because the Canadian tax is imposed upon the lump sum withdrawal (which is not taxable in the U.K.), whereas any U.K. tax is levied on the disposal of assets held within the RRSP to enable the lump sum to be withdrawn. By the same token, where the disposal of RRSP assets to facilitate a withdrawal gives rise to U.K. tax, no foreign tax credit relief is permitted since the disposal of the asset within the RRSP in Canada is non-taxable (while inside the plan).
As for the TFSA, there would be no Canadian withholding tax on TFSA withdrawals. No new TFSA contributions are permitted as a non-resident of Canada.
Finally, be sure to check with a U.K. advisor as it’s unlikely that the U.K. recognizes the tax-deferred status of the RRSP and the tax-free nature of the TFSA, and thus you could face U.K. tax annually on any income or realized gains on the investments inside these plans.
Have a question about money or lifestyle topics for seniors, or want to suggest a story idea for the Sixty Five series? Please e-mail us at sixtyfive@globeandmail.com and we will find experts and answer your questions in future newsletters.