Sometimes I feel like I’m off and away like a herd of turtles, but I’m gradually inching towards a retirement check list. I hope this posts helps you think about creating a retirement check list, too.
Many of us spend decades working and hope we’ve got our ducks in a row for retirement. The advice we hear from writers who’ve always had a good paying job with a pension plan, wise investments, own a house, and max out their retirement accounts doesn’t resonate with lower income, single women. Or even lower income couples.
The advice usually goes something like save as much money as you can and pay off your mortgage and all your debt before retiring.
People on low income are struggling just to pay the bills. There isn’t extra money to put aside for retirement savings. Us single women are a one person household income. There is no one else to split paying the rent and utilities. We do it all.
Finances keep getting more and more complicated. It’s not going to get easier when we retire and our workplace income ends.
WHEN TO RETIRE?
One of the biggest decisions to make is at what age to retire.
Or even if you’ll fully retire. Many people in their 60s and 70s keep working. They’re physically and mentally capable of doing so. Perhaps they’ve working shorter hours or maybe a different type of job than what they did in the majority of their working years.
Other people keep working because they can’t afford to retire.
Loosely I’m thinking of working until at least 65, maybe 66. Maybe with shorter hours. Or maybe retire completely.
I don’t actually have a set in stone age to retire. All I know is the push is on to save as much money as I can before fully retiring.
WHEN TO TAKE RETIREMENT BENEFITS
Canada and America offer similar old age benefits to their citizens.
In Canada, there’s the CPP – Canadian Pension Plan. Workers have a percentage of their income deducted off each paycheck that is deposited to the CPP. The amount of money a retiree receives is based on how much they contributed during their working years, and at what age they start collecting. CPP is available at age 60. The amount of CPP varies from person to person. Could be a couple of hundred dollars a month up to around $1200, which is the maximum. That won’t be my problem. I never had that kind of high paying job. Most Canadians average around $700/month.
For residents who’ve lived in Canada for at least 40 years after the age of 18, there is Old Age Security (OAS). That can be accessed at age 65, though some Canadians defer it for a few years. All Canadians receive the same amount (except those who defer – the amount increases by .06% for every month past the 65th birthday) and it’s adjusted for inflation annually. Right now, OAS is a bit over $600/month. For residents who haven’t lived in Canada long enough, a pro-rated, lower amount of OAS is available.
In America, Social Security benefits can be accessed as early as age 62. The average benefit is around $1,200 a month. See this AARP article for a better breakdown. Sorry, I’m not familiar with American programs!
The thing with these retirement or pension benefits is once you get the ball rolling to start receiving them, you can’t stop and then restart. Say you needed the money and started taking your retirement benefits early. Then you found a nice job and you’re not struggling financially, but now you’re taking a tax hit on the extra money. You can’t pause the senior benefits once you’ve started collecting them.
A few years ago my plan was to start taking CPP at age 60, but I still haven’t applied. I decided to try to hold off as long as possible. If I’d started taking the benefits at age 60, that income would be around $400 a month for the rest of my life, with small annual adjustments for cost of living. If I can hold out until age 65, it’ll be over $600/month. CPP is taxable, so that’s another hit while I still have income from a job I’m being taxed on.
Plan ahead! These benefits could take months to kick in after signing up for them.
LIVING YOUR RETIREMENT LIFESTYLE
Have you given much thought about where you’ll be living when you retire?
We all need a place to live and put our stuff. Living in Canada and America might be too expensive on a meager retirement income, especially if all we’re getting is senior benefits from our governments.
It might be a struggle to keep surviving where we’re currently living. Or we might be able to live a much nicer life in a foreign country with a lower cost of living.
Maybe even move to another part of the country. It’s nice for Americans who have the options of warm weather states. In Canada, the Greater Vancouver Area and southern Vancouver Island have about the warmest temperatures we can find in the country. That comes with a high cost of living, especially with housing.
The Maritime provinces offer an attractive, lower cost destination to retire to, but those winters are nasty. They’re always digging out from 10 feet of snow after blizzards.
OCCUPYING OUR DAYS
Now that we’ve reached retirement age, and we’ve decided we’re done working, how will we spend our days?
Some retirees are caregivers. To their parents, their spouse, maybe their kids or grandkids.
Being a caregiver is a full time job. Some caregivers will be just as busy as they were during their working days.
A lot of retirees would like to travel more. That means figuring out a budget of how much to spend each year on travel. Or if it’s a really epic vacation, that might mean saving for a few years. Lower income single women probably don’t have a huge retirement account to count on to fund travel.
When I turn 65, I’ll be eligible to receive money from a Locked-In Retirement Account. A LIRA is where the money goes if an employee worked for a company with a pension plan. Upon leaving the company, the pension plan has to be allocated to a LIRA. That sucks! But anyway, I have one of those, courtesy of a credit union I used to work for. I’ll receive about $4,000 a year when I turn 65. My lawyer pointed out that’s money to take a vacation on. And that’s probably where it’ll go for.
Taking up a hobby is another way retirees spend time. Perhaps that hobby could even turn into an income-earning opportunity. I know someone whose hobby is baking cupcakes and cakes and she sells her goodies to hungry clients.
As for me, my hobby costs me lots of money. My hobby has a head, a tail, four legs, and it whinnies.
What about volunteer work? There are many charities out there who can use a hand.
But you know what?
Hobbies, volunteer work, and travel are all things we can do during our working lives too. We don’t know what tomorrow will bring. Why put things off? That’s why a few years ago I decided to do more traveling to Oregon and Washington. Until Covid-19 and the darned land borders are still closed! Well for Canadians heading South – thanks Biden! Fully vaccinated Americans are allowed to drive into Canada now, so the border is partly open.
WHERE, WHEN, AND HOW!
If you’re also inching towards a retirement check list, it all comes down to where, when, and how!
Where will you retire?
When will you retire and when will you start collecting retirement benefits?
How will you spend your days?
Are you inching towards retirement?
Published by Cheryl @ The Lifestyle Digs on September 5, 2021.