•   
  •   
  •   

Money Retirees need to start thinking ahead

22:57  05 may  2017
22:57  05 may  2017 Source:   moneysense.ca

Sears, Payless woes push retail vendors to get more militant

  Sears, Payless woes push retail vendors to get more militant When a group of disgruntled shoe manufacturers assembled in China earlier this year, they put up signs with messages in English, hoping they would be seen by Americans 7,000 miles away: “Payless Sucks.”BEBE

Retirees have plenty of estate planning considerations to make. Here are tips from retirement expert Jonathan Chevreau. Start now! The trial run may be the need to care for aging parents, but once they’re gone, the next in line will be ourselves, our spouses and other loved ones.

"You want to start thinking about being very tax efficient with your income." Avoid This Cash Penalty. Please. Don't frustrate your spouse and don't hurt your financial position. "If you're turning 70 and a half, you have to start taking required minimum distributions from your IRA," Powell said.

In April, a CIBC survey discovered almost a quarter of Canada’s baby boomers have no formal plans for taking care of elderly family members. This is a disturbing pattern that is consistent with the well-known fact that more than half (56%) of Canadians don’t even have a will.

Popular Searches

International Business Machines Corp

IBM

7 money decisions you could regret forever

  7 money decisions you could regret forever You don't want to get to your golden years and realize you never got to see the world. Or worse, that you don't have enough cash in the bank to sustain your retirement.Others will haunt you.

In fact, many people actually become a “failed retiree .” That is someone who is depressed with long days ahead 1. Develop your life plan. Waiting until you are finished with your job is not the time to start your planning. You don’t need to start a business but you sure can expand your favorite hobby.

Thinking one level ahead means understanding how tech skills intersect with the larger picture. Pillar 2: Professional communication and relationships. In order to think one level ahead , you need to be strategic about proving your worth in a measurable way. Take charge of your accomplishments with a

155.18
-3.72
-2.34%
Air Canada

AC

13.96
+1.17
+9.15%
Home Capital Group Inc

HCG

5.87
-0.14
-2.33%
JBS SA

JBSAY

6.76
+0.09
+1.35%

In both cases, there seems to be some big-time denial of the inevitable going on. Here at Retired Money, we tend to focus on the more pleasant aspects of the post-full-time work lifestyle but the very fact one is old enough to have accumulated significant wealth also means one is that much closer to sickness and ultimately of death.

The trial run may be the need to care for aging parents, but once they’re gone, the next in line will be ourselves, our spouses and other loved ones. And the best time to prepare for these inevitabilities is while all parties are still young and healthy enough to talk about it.

What to do if you don’t trust the executor of a will

  What to do if you don’t trust the executor of a will This reader thinks her brother will keep everything from their parents’ will

The average near- retiree today has saved only 4,000. This thinking is leading many institutional investors, mutual fund managers, hedge funds and the like to FOMO (fear of missing out). Get full access to everything you need to make the best investing decisions. Start Your FREE Trial.

In reality, once you start withdrawing money from the nest egg you worked so hard to build, it's the sequence of those returns, not the averages, that can have a major effect on your wealth. Down markets are little more than a distraction when you're young and still adding to your retirement savings.

CIBC vice president David Nicholson says families shouldn’t have to wait for a health emergency or unexpected event to force a hurried conversation about caregiving and financial planning. CIBC found 90% of Canadian adults acknowledge the importance of discussing these matters but only 62% with a parent age 65 or over actually engage in this conversation. This reluctance stems in part about concerns the old folks may think the kids are merely after their money.  Even so, one in six who are 65 or older believe eldercare should be a top issue.

As for wills, CIBC found 68% of those with 65-year old parent or older do have a will in place, but only 23% of the same group have a financial plan for their senior years, 43% have a legal power of attorney and 39% a health-care power of attorney.

According to Tom Deans, author of Willing Wisdom, 12.5 million Canadians don’t even have a will and hence no estate plan. And even among clients of estate planning experts, 90% of the time the children don’t find out the full extent of their parents’ wealth (and wisdom) until one of them passes away and the will is read out to the grieving heirs, Deans says.

How Homeownership Became the Engine of American Inequality

  How Homeownership Became the Engine of American Inequality An enormous entitlement in the tax code props up home prices — and overwhelmingly benefits the wealthy and the upper middle class.Two years ago, the couple bought a new home. Set on a half-acre lot that backs up to conservation land in Milton, Mass., the 2,350-square-foot split-level has four bedrooms, three bathrooms, an open-concept kitchen and dining area, a finished basement, hardwood floors and beautiful touches throughout, like the Tennessee marble fireplace and hearth. It cost $665,000. “This is the nicest house I’ve ever lived in,” Asare told me.

Question everything Want to think what nobody has ever thought ? Start by questioning all assumptions. There comes a moment in time where everyone agrees The best way to make sure that this happens is to think about how long the turkey needs to cook, and what other things need .

It may seem years away, but we all need to think about how we'll live out our lives in our retirement For instance, did you know about 60% of current retirees use Social Security as their primary source of In fact, in a 2012 Gallup poll Americans ranked their need for retirement income ahead of other

The need for younger family members to pay attention sooner is underscored by a passage in Deans’ book that describes the all-too-common situation whereby the whole family is disinherited during a late-life redrafting of a will, in order to designate a “younger, ahem, ‘caregiver’ “ who becomes the sole beneficiary.

Sadly, we all may have less time than we assume. Of the 7,000 Canadians who die every day, 19% die in their 90s, about 33% do so in their 80s, 23% die in their 70s and 12% in their 60s: But 7% die in their 50s and another 7% die even before then, according to Deans.

Little wonder “sudden wealth” can descend upon families at any time. Another CIBC study released in 2016 showed $750 billion will be inherited by Canadians in the next decade, which Deans says translates into $205 million today, tomorrow and every day for the next ten years.” The fastest growth bequests will be from boomers to their millennial children, he says.

Les Kotzer, a wills lawyer with Thornhill, Ont.-based Fish & Associates author of The Family Fight and other estate planning books, stresses the importance of having a second will. This is a major technique for minimizing the cost of probate fees of 1.5%.  The first is for assets controlled by third parties and which therefore must go through probate: typically financial assets. The second will is for assets like personal effects and shares in the family business, which do not need to go through probate (also known in Ontario as an Estate Administration Tax or – aptly! – EAT).

Oilers bounced from NHL post-season by Ducks

  Oilers bounced from NHL post-season by Ducks Oilers bounced from NHL post-season by DucksANAHEIM, Calif. - The Edmonton Oilers were taught a harsh lesson, one the Anaheim Ducks had learned too many times in recent years. Finish off a playoff series when you get the chance, or you will almost certainly regret not doing so.

Using a second will is a strategy that wealth and health consultant Sandy Cardy recommends all the time, in part because it provides a lot more privacy about the assets that don’t have to go through probate. But, she cautions, you have to get some experienced wills practitioners to ensure that the second will doesn’t revoke the first one.

In the case of business owners wishing to pass the family business on to the kids, you certainly need to plan well in advance of death.  Tactically, a popular technique for intergenerational wealth transfer is the estate freeze, says Adrian Mastracci, portfolio manager with Vancouver-based Lycos Asset Management.

The founder literally “freezes” growth of such assets as the business, investments or real estate, in effect transferring future growth to the heirs. In the case of a private company, assets are transferred at current fair market value for shares of equal value in the private company; the heirs become shareholders and their wealth rises as the shares rise, while the founder’s shares no longer rise in value. Family trusts can also be used but Mastracci says some rules have changed as some trusts approach their 21-year life.

Cardy adds that if you do go for an estate freeze, you need to talk to an estate lawyer who knows how to protect the kids’ shares in the business from matrimonial claims. Estate freezes can also be used to lock in the value of a cottage, Cardy says.

Russell Wilson pens controversial Mother's Day note to Ciara

  Russell Wilson pens controversial Mother's Day note to Ciara Russell Wilson pens controversial Mother's Day note to CiaraWilson - who wed the singer in 2016 and welcomed baby daughter Sienna with her last month - shared a sweet photo on Instagram of the two at the 2016 Billboard Music Awards and wrote, "Nothing better than spending time with you. You are an amazing mom & I'm so grateful I get to spend the rest of my life with you & raising our kids. I love you! #HappyMothersDay Weekend my love. @Ciara.

Another key consideration is the lifetime capital gains exemption, which is $835,700 per spouse, available in 2017 (for qualifying small businesses, farm property and fishing assets). Mastracci says full use of this exemption generates tax savings of more than $190,000 per spouse across Canada.

In short, it’s all about families communicating while they still can. Deans’ book lists seven questions successful families need to ask themselves. And CIBC lists five steps families should take: talk about future plans, be able to locate key documents, set expectations for care giving, create a financial plan and seek financial and legal support to build an estate plan.

Jonathan Chevreau is founder of the Financial Independence Hub and co-author of Victory Lap Retirement. He can be reached at jonathan@findependencehub.com

MORE ABOUT ESTATE PLANNING:

  • Help your parents avoid probate
  • Investing as power of attorney
  • Can my son challenge my will?
  • Joint tenancy vs. tenants in common
  • Financial contracts with family
  • What to do with a sudden inheritance
  • America’s most expensive cemeteries
  • Will preparation for every budget

10 financial risks and rewards of retiring abroad .
Wondering where to retire? Living abroad might save you money, but there are risks.A recent GOBankingRates survey found that more than half of people ages 55 and older have less than $10,000 saved for retirement — and a whopping 34 percent have nothing saved at all. While such little savings can make it near impossible to retire in the U.S., there are plenty of countries where the cost of living is lower, so even a small sum can stretch further.

Topical videos:

usr: 1
This is interesting!