Golden years or dark cloud? Rethinking aging: Part 1

With life expectancies increasing and those aged 65 and up outpacing those 0-14 in population growth, it’s time for people to think about how they want to spend their second adulthood.

Everyone has to define what retirement looks like to them; however, increasing life expectancies can lead to increased burdens. Here are some ways planning can help ease these burdens

Financial planning

There are things that everyone can do to get their financial matters in order and to help make it easier to retire and live well as you age:

  • make saving easier with:
    • automatic savings plans
    • RRSP contributions
    • Tax Free Savings Accounts
    • employer programs
  • monitor where your money is going:
    • create budgets and monitor spending
    • pay down debt to avoid late fees and penalties
    • determine how much you will actually need to live in retirement
  • create an overall financial plan that includes retirement and other life changes and takes into consideration whether your situation is complicated or not
  • talk to a financial advisor at your financial institution

While it’s good to start as early as possible, life can get in the way. If you’re starting to save for retirement later in life, this CPA Magazine article might help.

Estate and funeral planning

After building a life, you want to make sure that what’s left after you’re gone endures. Estate planning is about making sure your property and possessions are distributed according to your wishes. A will is the most common estate planning document. Estate planning documents are legal documents, so it’s a good idea to have them prepared by a lawyer.

Funeral planning can range from discussing your wishes with family members, to pre-arranging and pre-paying.

When planning to spend winters in a sunny hotspot, some of the things you need to think about include:

  • Renting or buying a space to call home. Enlist the services of a local broker in the area you are looking into. Consideration also needs to be given to what you will do with your Canadian-based home – rent it out for additional income or leave it vacant. This also requires consideration of what needs to be cancelled or kept up while you are away.
  • Immigration laws. Visas aren’t necessary for pleasure trips but stays in the U.S. lasting longer than six months require additional documentation and authorization from U.S. Citizenship and Immigration. Other locations (Caribbean, Mexico, Central America) may have different requirements.
  • Health issues.Make sure to have travel medical insurance. Visit your doctor for a thorough checkup prior to leaving, research health resources available in the area where you are planning to stay and look into your provincial health care coverage to see if and when it would lapse, depending on how long you are away.
  • Tax issues.To avoid taxation while living in the U.S., you must complete IRS form 8840 annually, providing you meet the criteria to have a “closer connection” to Canada. If you have a bank account with a U.S. institution, on which you are earning interest on deposits, you should complete IRS form W8-BEN with your U.S. financial institution. Other foreign destinations will have their own specific requirements. Your financial advisor should be consulted.

Keep the conversation going

Have you thought about what your retirement looks like, and how you plan to get there? What actions will you take to fully realize your second adulthood?  Post a comment below.


The views and opinions expressed in this article are those of the author and do not necessarily reflect that of CPA Canada.

About the Author

Paolina Calabro, CPA, CGA

Paolina is a financial analyst at RealDecoy.