Oaken Update – September, 2017

The big picture on retirement in Canada

A recent feature in the Toronto Star provided a wealth of information about retirement that paints an interesting picture. Based on a survey of working Canadians and retirees, the article revealed some encouraging insights:

  • An overwhelming majority of retirees (88%) feel positive about retired life.
  • Nearly one third said their biggest surprise in retirement was how easy it was to live on a smaller budget.
  • Fully 62% said their emotional health improved after leaving the workforce.

On the other hand, the article also noted that anxiety about retirement among working Canadians is very high. Most don’t feel they can afford to retire yet, and a remarkable 77% believe they will have to work beyond the statutory retirement age.

Plan your worries away

The key to easing anxiety about retirement is having a plan. Once you sit down and evaluate your financial future with hard numbers, you’re well on the way to dispelling those clouds of worry. That’s because our biggest fears come from the unknown. Making a plan can reveal that you’re actually better off than you thought, which is always a great feeling. And if it shows that you’re not on the financial footing you want to be, it will encourage you to save more and reduce your expenses.

One great advantage of retirement is that many of your expenses diminish, sometimes considerably. Your taxes are often lower, your mortgage may be paid off, and children are usually well on the way with their own careers. However, the counterpart to that can be a major increase in expenses, from things like travel. Once again, that’s where planning can be a great help in putting things in perspective and letting you breathe easier.

You can read the Toronto Star article by clicking here, and we highly recommend it. It covers retirement in detail, and also features a convenient, step-by-step calculator that lets you figure out how much you will really need to retire.

Why you should designate a TFSA successor

There’s an often overlooked aspect of TFSAs that can have significant consequences for your estate planning, so we thought we should share it with you. It’s about what happens to a TFSA when the plan holder dies.

As you probably know, any gains that accrue in a TFSA (such as interest payments, dividends, capital growth) are not taxed by the government. While a death triggers the termination of most other kinds of accounts, that’s not true with TFSAs—if you’ve planned properly. By designating your spouse or common-law partner as a Successor Holder, you ensure that the account continues in existence upon your death, with the survivor as the new account holder.

That can have quite a big impact on your family’s overall financial picture, especially in old age. By retaining the account, the survivor will continue to benefit from tax-free asset and wealth accumulation. For someone who may have another 10, 15 or 20 years in which to enjoy their investments, that can add up to significant savings

There are two key points to remember about designating a successor. First, only a spouse or common-law partner can receive the designation. Other family members, such as children, are ineligible. That means that TFSAs don’t continue indefinitely, generation to generation.

The second point is that it’s highly advisable to designate a successor while you are still alive. A spouse who is the deceased’s beneficiary, but who was never named as a successor, can transfer their partner’s TFSA assets to his or her TFSA account up to December 31 in the year following the death. That amount is not taxed, because it’s deemed to be an exempt contribution. However, any amount that the TFSA accumulated between the date of death and the date of transfer is NOT exempt. That amount would then count towards the surviving spouse’s contribution room.

Yes, it’s complicated. And we haven’t even covered the tricky bits, such as how the exempt value is calculated and what tax forms you need to do this. That’s because we’re making a very strong recommendation: designate a successor now. It will make life a lot easier down the road.

Healthy eating means healthy living

It seems we’re all obsessed with food these days, for both good and bad reasons. On the positive side, there has probably never been a better time in history to be a foodie. The variety and quality of ingredients, restaurants and food choices today is stunning. On the negative side, excessive weight is a problem for many of us, with over 60% of Canadian men, and nearly half of Canadian women, overweight or obese.

One of the problems compounding our relationship with food is convenience. And while it’s true that a lot of convenient food isn’t especially healthy, some of it is just fine. So before you swear off packaged and processed foods entirely, here are a few points to remember:

Frozen is fine

When it comes to frozen fruits and vegetables, there’s generally no reason to be concerned. That’s because freezing eliminates the need for additives that are often not good for you. But there’s more! Because frozen fruits and veggies have been frozen at more or less peak freshness, in many cases they’re actually more nutritious than fresh ones. So go ahead, help yourself from the freezer.

Bagged salads are the real deal

Those salads you can buy in bags or clamshells are, technically, processed. That’s because they’ve been washed, handled and packed. But in truth they’re not any different from salads that you would prepare at home from the same ingredients. No additives or preservatives, so eat your greens with confidence.

Labels are your friend

Labels list ingredients in order of greatest amount. Watch out for products with sugar and fat at the beginning. And consider whether or not you want a product with white flour, as whole grains are healthier. And for fibre, remember that 4 grams per serving is great, 2 grams okay, and less than 1 gram is low.

Pick your percentages

In addition to the list of ingredients, most labels also include the “percent daily value” (% DV) that makes it easy to judge nutritional value and compare different products. For fats and sugars, 5% DV or less is low fat or low sugar. For sodium, 15% DV is considered low as well.

Plain language, please

As a final note, any product that contains ingredients with long names that you can’t pronounce (which are usually things like preservatives or colourants) is likely not going to be as good for you as a similar one without those things. Simple is generally best.

Time for more show and tell

It was great to see many of our friends and customers at The MoneyShow Toronto earlier this month. Held every year, The MoneyShow is always an excellent chance to interact with some of the key financial players in Canada, as they offer their thoughts on where the markets are heading and what type of strategies you should be considering for your financial future. For those who missed it, you can still watch some of the highlights here.

We’ll also be attending the Toronto ZoomerShow once again, which is taking place at the Enercare Centre on the weekend of October 28 & 29. The ZoomerShow is billed as the “Consumer and Lifestyle Expo for 45+”, and will be celebrating its 10th anniversary this year. This is always a fun event that encompasses a wide variety of topics, including finance, retirement, travel, entertainment, health, fitness, and much more besides.

Shortly after that, we’ll be back at the National Women’s Show in Toronto, which is happening on November 10-12 at the Metro Toronto Convention Centre. This is also a multi-faceted show with hundreds of exhibits, and an emphasis on fashion, food and fun.

We hope to see as many of you at these events as possible. And as usual, make sure you stop by our booth to say hello, as well as enter into our draw for your chance to win a great prize!

Reading corner

As it’s one of our favourite times of the year again, here’s some reading material to accompany those pumpkin spice lattes…


The information, materials and opinions contained in this Blog are provided for your information only. This Blog does not constitute legal, financial or other professional advice and you should not rely on it as an alternative to specific advice based on your particular circumstance.

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