In May Publisher/Editor Honoré passed along a letter from a TAN reader concerned about regulations which govern Canada’s two income plans for seniors, the Canada Pension Plan (CPP) and the Old Age Security Program (OAS). From Honoré’s comments it seemed that I was getting the call to respond not because I am a financial genius, (which is good because I’m not) but because I am a pensioner. In fact something the editor said suggested that I may be the oldest writer on the TAN team. (Note to self: ask Honoré for a corner office with air conditioning as befits my greybeard status.)
Our reader decried the low attention paid by all parties to pension issues in the recent federal election campaign, the delay in receiving CPP and OAS benefits after a pensioner’s 65th birthday and the mandatory cash-in of Registered Retirement Savings Plans at age 71. I had a crack at researching pension and tax regulations related to these matters and quickly decided I am in no position to offer detailed financial advice in this space but some general comments come to mind.
There are two main courses of action for seniors looking to protect their financial interests: political action to change pension amounts and regulations and careful planning to ensure that full benefit is gained from the pension and tax regulations as they exist. Political action is all about engaging people in a common cause in numbers large enough to have an effect on a government’s ability to stay in power so seniors are strongly advised to check federal party policies to see which party seems to place the greatest emphasis on their financial wellbeing and then work get that party elected. Groups for seniors combine advocacy for improved government benefits with other services and two groups to consider are the Canadian Association of Retired People (CARP) and Seniors’ Info, A Collaborative Online Resource.
Provincial and federal tax laws and benefit programs for seniors are complex hence the need for careful planning but adherence to a few basic principles will do a lot to promote financial security in old age. My parents and grandparents lived through the great depression of the 1930s and tried to instill the values of living within one’s means and saving each month for both rainy days in the short term and long term financial independence. In a recent Vancouver Sun column Shelley Fralic cited advice on retirement planning she once received from former Sun Money Matters columnist Mike Grenby. Quoting Ms Fralic: How much money do I need to live comfortably in retirement, Mike? This is what he said: “Not as much as everyone thinks. It’s simple. Don’t retire until all your major debts are paid off, like your mortgage and credit cards. And buy a new car a few years before you retire, with a warranty that continues a few years after you retire…Make sure your retirement income — from investments and pensions or whatever — is about half of what you earned the year before you retire, and you should be just fine.” Couldn’t have said it better myself so I didn’t.
Immigrants face so many challenges when making Canada their new home that planning for senior years is probably far down on their list but the sooner it can be addressed the better. Organizations such as S.U.C.C.E.S.S. and the Immigrant Services Society of British Columbia can be invaluable in helping immigrants find their feet and learn about government benefits and support programs but CARP is the main source of financial planning advice of which I am aware. Members are eligible for reduced group rates for extended health and other benefit plans and speakers are invited to local luncheon meetings to address any issues which are of interest to members.
The Canadian Revenue Agency, the good people who collect our taxes, offer a Community Volunteer Income Tax program under which the CRA partners with community organizations and gives training to volunteers to help people complete their income tax and benefit returns.
May you live long and prosper.