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The usual age to retire is 65 in Canada, however if you happen to’re in good well being and anticipating to stay an extended life, chances are 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 probably be since they are going to cowl fewer years, says Jason Heath, managing director of Goal Monetary Companions Inc.
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“Usually talking, if you happen to stay effectively into your 80s, you may 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, not too long ago spoke with FP’s Larysa Harapyn about various methods for retirement.
Regardless of the advantages, solely 5 per cent of CPP candidates waited till the age of 70 in 2022, he stated.
Essentially the most profitable retirees Heath has seen are those that have transitioned to retirement by way 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 life-style perspective, might 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 folks don’t have a selection, whether or not that’s due to severance packages within the company world or well being points that result in a sudden retirement. “Dying and retirement usually are not meant to go collectively … however actual life tends to work slightly in a different way,” he stated.
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Expat locations for retirement are an choice for Canadians attempting to economize on the price of residing. Heath stated there’s alternative in nations similar to Panama, Ecuador, Costa Rica and Mexico which are attempting to draw retirees from different nations. Among the advantages embody decrease actual property costs, meals prices and simpler journey to unique places.
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For many who choose to remain nearer to house, tapping into your property fairness by downsizing or borrowing in opposition to your property are choices in the best circumstances, notably for individuals who stay in massive cities the place house costs are greater.
“If it buys someone 5 extra years of their house, for instance, borrowing in opposition to that worth earlier than they promote it, I don’t suppose it’s a nasty factor,” stated Heath.
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