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The usual age to retire is 65 in Canada, however for those who’re in good well being and anticipating to dwell a protracted life, it’s possible you’ll wish to think about deferring Canada Pension Plan, says a monetary planner.
You can begin CPP as early as age 60 or as late as 70, however the longer you wait, the upper your month-to-month profit will likely be since they are going to cowl fewer years, says Jason Heath, managing director of Goal Monetary Companions Inc.
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“Typically talking, for those who dwell nicely into your 80s, you’ll be able to come out forward by deferring your CPP to age 70. The issue? No one does it,” Heath stated.
Heath, a fee-only, advice-only licensed monetary planner and Monetary Put up columnist, lately spoke with FP’s Larysa Harapyn about different methods for retirement.
Regardless of the advantages, solely 5 per cent of CPP candidates waited till the age of 70 in 2022, he stated.
Probably the most profitable retirees Heath has seen are those that have transitioned to retirement by means of part-time, consulting or volunteer work, avoiding the acute change from a 40 to 50-hour work week.
“The sooner you begin to plan retirement, not solely from a monetary perspective, however from a way of life perspective, will be actually rewarding and enhance the transition,” Heath stated. “In an ideal world, it’s deliberate, it’s gradual, it’s regular.”
Heath acknowledged that some individuals don’t have a alternative, whether or not that’s due to severance packages within the company world or well being points that result in a sudden retirement. “Demise and retirement are usually not meant to go collectively … however actual life tends to work just a little otherwise,” he stated.
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Expat locations for retirement are an choice for Canadians making an attempt to economize on the price of dwelling. Heath stated there’s alternative in nations comparable to Panama, Ecuador, Costa Rica and Mexico which are attempting to draw retirees from different nations. Among the advantages embrace decrease actual property costs, meals prices and simpler journey to unique places.
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For individuals who favor to remain nearer to dwelling, tapping into your house fairness by downsizing or borrowing towards your house are choices in the appropriate circumstances, significantly for many who dwell in huge cities the place dwelling costs are increased.
“If it buys someone 5 extra years of their dwelling, for instance, borrowing towards that worth earlier than they promote it, I don’t suppose it’s a foul factor,” stated Heath.
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