If you use news headlines as a guide, it would seem that group benefits at work – health, dental, chiropractic and more – are getting a bad rap, and benefits fraud is the reason.
While the vast majority of employees make legitimate benefits claims, the bad apples get all of the publicity. One of the worst in recent years was the fraud involving the Toronto Transit Commission, which was linked to more than 220 employees who have either been fired or resigned.
In many cases of fraud, service providers collude with benefits plan members to get money out of the plan. So, they claim for orthotics that are never delivered, or claim for prescription glasses but receive designer sunglasses, or submit a receipt for a therapeutic massage when they actually received a sexual massage from a massage parlour.
The chill effect
The trouble with fraud, and all of the warnings about “don’t abuse your plan” is that it can create a chill effect on those who want to use the “health services” part of their plan (in-person treatments and therapies) for legitimate reasons. People can feel that using these benefits outside of an emergency situation equates to taking advantage of their plan. So, they don’t get their knee checked by a chiropractor, or get a back massage for their lower back pain, or get the orthotics they need to prevent problems down the road.
And the most underused benefit area, according to Canada’s largest provider of group benefits, Sun Life Financial, is for psychological services. For Canadian employers with 50 or more employees, 88% of employees make at least one prescription drug claim in a year but only 5% make a claim for psychological services. This is despite the fact that mental health issues are a leading cause of short and long-term disability claims. You can read the full report here.
Think prevention: Make use of your plan
My point is a simple one: employers want employees to take the prevention steps needed to stay healthy. It’s beneficial for both the employee and the business. Yes, there are short-term costs for preventative treatments, but these short-term costs can avoid larger long-term costs, such as multi-year disability leaves. This is especially true for mental health issues.
All to say, if you’re lucky enough to have a benefits plan, don’t wait for an emergency to learn about the preventative treatments available to you. From dental check ups, to mental health therapy, to chiropractic adjustments, there are subsidized treatment options available to help you stay healthy and productive.
Enjoy the rest of your day!
There are lots of positives to retirement and your senior years: fewer costs, more leisure time, and less daily stress to name a few. And these are all worth celebrating. But the negatives can be crushing: more body pains and disease, the deaths of close friends and family, and being that much closer to death yourself.
It’s not that age 65 or 70 can’t be wonderful. It often is. If you could freeze the best time of older age, most people would take it in a snap, even over their younger years. But you can’t freeze time, so onward we go to the inevitable: settling our estate (but without us being there).
Bolt out of the gate
These facts don’t depress me, they actually motivate me. I’m not a senior yet, but many in my circle are. And the ones who impress me are the ones who embrace their senior/retirement years right out of the gate.
That means making maximum use of the freedom that comes with their “new normal.” While the activities people choose will differ radically, one common thread is often a need to watch cashflow a little more carefully. For many, it’s a balance between enjoying life now and not running out of money later.
Which brings me to my confession and my point, with the confession first: I’ve never been a coupon clipper. My spending could be described (charitably) as a bit loose. I know I could get $30 off my phone bill for 6 months if I phoned Bell and threatened to leave, but I save my energy for my work and family and choose to battle Bell another day.
Now my point: that “other day” should be when you turn 60. The reason? The discounts are far too rich to turn down, you have a little more time to organize your life around saving, and your need (if you’re retired) has likely never been greater.
From banking, to grocery and drugstore shopping, to travel, you can easily knock 20% to 50% off your costs once you reach your prime senior years. And those savings can be channelled into pursuits that you find most meaningful.
You have to know what’s available and sometimes you have to ask. But the deals (which are not time-limited) are substantial.
This website is a great place to start
Happy 60th, and happy saving. Thanks for reading!
Is it possible for today’s seniors to return to their hippie past? For some, plans are in the works.
Youth of the 1960s were a powerful social force that introduced a greater acceptance of community or “commune” living. While the concept never went mainstream, commune-type living is a niche arrangement that takes many forms today, from housing co-operatives in the city, to back-to-the-earth rural compounds, to religious groups seeking to live with their own kind.
If there’s a “hippie” feel to all of this, it’s for good reason. Many of these communities are progressive, socialist in leaning, and seeking a higher ideal in their living. It sure sounds like the 1960s.
Which takes us to commune living for seniors. I heard about this first from a group of men who played hockey together and lived in the same neighbourhood. Recognizing that many would need to “cash out” and sell their homes as they got older, the group lamented the possible loss of their community. One answer was to establish a single housing collective that everyone could move to to maintain their social bonds.
While that idea has never gotten beyond beer talk (at least not yet), I recently learned of another friend who was actively involved in a group that had moved beyond the talking stage and were scouting potential building sites. It may not be for me, but it certainly put the idea on my radar.
The push for senior communes
The attractiveness of senior communes is that it bypasses traditional retirement homes (too institutional) or living alone arrangements (no community, too lonely). A commune brings like-minded people together who can care for each other – and bring in help as needed as group members age.
Of course, there are countless hurdles to such arrangements that range from funding, to legal status, to rules relating to who can live in the complex and what the responsibilities of living there entail.
The Huffington Post ran an article about this recently.
One of the Toronto groups mentioned in the article, Baba Yaga Place, is in the process of making their community living project a reality. It’s modelled on a Paris commune of senior women that is up and running. The Paris commune took 13 years to establish, but Baba Yaga Place is hoping their development stage is quicker. You can follow their progress through their website.
Are you ready to channel your inner-hippie as you enter your senior years? You may soon have options.
Thanks for reading,
We’re almost 19 years into the new century, so it seems a little late to be talking about the “new” 21st century version of retirement. Or does it?
For those in their 50s or 60s approaching retirement, I don’t think so. If you’re getting close to retirement, you likely have parents who retired in the last century. Pre-internet, pre-smartphone, pre-Amazon delivery on demand. There’s a good chance that at least one parent is still alive, and, like it or not, our “vision” of retirement is shaped by those living it now.
And those living it now made retirement decisions based on life in the 20th century. We may consciously want a different type of retirement, but subconsciously we can be influenced by our parent’s retirement path, whether we know it or not.
So, how could your retirement decisions be different than those of your parents? Here are a few things to consider.
- Shrinking distances: Many retirees want to be in close proximity to their children and grandchildren – and that has influenced many in choosing a home location, even within the same city. But the emergence of advancements like self-driving cars (coming soon), discount airlines, and video calls has made it easier to connect. You may have a much broader radius for home location than you think.
- Enhanced services: In today’s Amazon era, just about anything can be delivered to our doorstep. In Ontario, even the government-controlled liquor store can deliver to your home. This not only decreases your need to be living near certain retail locations, it could allow you to stay in your own home much longer than previous generations. Virtual health care (via text or video conference) has also emerged as a service that brings health care to you rather than the other way around.
- Longevity: Life expectancy gains have slowed a bit recently (as noted by the Canadian Investment Review) but lifespans continue to increase and medical advancements will continue to improve health as we age. For you, it means planning for a longer, healthier life (think 90s, not 80s). This fact can influence many factors, from ability to pursue a second career, to the asset allocation for your retirement savings, to your ability to gift money to family members during your lifetime.
The 21st century has been with us for while – and there are more options out there than you may have realized for your retirement. Make sure your plans reflect it.
Thanks for reading!
It’s been a cold winter, and the snowbird culture is alive and well in Canada. The southern United States continues to swallow up planeloads and carloads of Canadians visiting for a few months each year. And good for them – they’ve earned their time in the sun.
But what if you’re more adventurous? You’re in or approaching retirement and looking for something more than sun. You want to experience a different culture, a different lifestyle – while still enjoying a break from the worst of winter.
This list of 10 places to retire abroad caught my eye for a couple of reasons. First, many of the locations I would never have considered for a retirement retreat. I was surprised at the countries and regions chosen, and it opened my eyes to some new possibilities. Second, the list is updated each year based on many factors, from currency changes to improvements to infrastructure. There’s clearly some rigour to the analysis.
The top 4 for 2017?
- Portugal’s Algarve Region
- Valletta, Malta
- Mazatlan, Mexico
- Abruzzo, Italy
The Forbes article has the full list for 2017, and you can click on the link at the beginning to sign up to receive the list for 2018. And if you’re looking at the tried and true U.S.A. to plant your winter roots, here are some suggestions:
If you buy abroad, put planning in place
If you do buy property outside of Canada, whether it’s in the U.S. or further abroad, the impact of this purchase on your estate should be addressed upfront, and reflected in your will and potentially in your tax planning due to different estates laws in different countries.
So, before you take the plunge, make sure you’ve surveyed the issues with a lawyer, ideally both in Canada and in the country in which you’re purchasing property. A little planning upfront can ensure you enjoy your winter retreat without worry or issue.
Thank you for reading … Have a great day,
Is a deceased’s Pre-Retirement Death Benefit to be included in the calculation of the value of an estate for the purposes of determining dependant support? That was the question asked and answered in Cotnam v. Rousseau, 2018 ONSC 216 (CanLII). There, a child of a deceased made a claim for dependant support as against the father’s estate. The estate had a nominal residual value. Accordingly, the applicant sought a determination that a Pre-Retirement Death Benefit payable to the deceased’s spouse was deemed to be part of the estate for purposes of determining the quantum of dependant support.
Section72(1) of the Succession Law Reform Act expands the potential assets available for the support of a dependant making a claim as against the estate. Section 72 lists a number of assets that are deemed to be part of the estate. The list includes “Any amount payable under a designation of beneficiary.”
The wrinkle with respect to the Pre-Retirement Death Benefit was that it was paid to the spouse pursuant to s.48(6) of the Pension Benefits Act. The spouse argued that she received the Pre-Retirement Death Benefit as a “spouse”, and not as a “designated beneficiary”. The Court referred to two decisions, Smallman v. Smallman Estate, 1991 and Quinn v. Carrigan, 2014 ONSC 5682 (CanLII), which cases held that a spouse’s entitlement to a Pre-Retirement Death Benefit flows from marital status, and not by designation, and thus, the benefit cannot be clawed back by virtue of s.72(1)(g) of the Succession Law Reform Act.
The Judge in Cotnam, however, disagreed with those interpretations of the interaction between s.48 of the Pension Benefits Act, and s.72 of the Succession Law Reform Act. The Judge did not agree that “this spousal priority” under the Pension Benefits Act shelters Pre-Retirement Death Benefits paid to a spouse from the “claw back” provisions of the Succession Law Reform Act.
The Judge went on to note that the provisions of the Succession Law Reform Act specifically contemplated a balancing of the assets between spouses and other dependants. To ignore the Pre-Retirement Death Benefit all together would not only be arbitrary, but may unduly skew the “balancing” envisioned under the Succession Law Reform Act. The Judge went on to state that the purposes of the Succession Law Reform Act could easily be thwarted all together if the Pre-Retirement Death Benefit was not deemed to be part of the estate. In many instances, the Pre-Retirement Death Benefit may be the only asset available to the deceased at the time of death.
Thank you for reading.
A lot can change in 100 years. In 1920, the life expectancy at birth for the average Canadian male was 59 years – and only 61 years for women. Fast forward to today and the numbers are remarkably different – nearly 80 years for men and 84 years for women.
And those are just averages. According to the federal government, a 50-year-old man today has a 37.5% chance of living to age 90, and a 50-year-old woman has a 48.8% chance, nearly one in two. Want to know your odds of living to 100? Check out Table 16 here: http://www.osfi-bsif.gc.ca/Eng/oca-bac/as-ea/Pages/mpsspc.aspx#TBL14.
What does it all mean? Well, you could live long enough to see the Toronto Maple Leafs win the cup after all; but, more importantly, it means you need to plan your finances to last a much longer time than generations past. Here are four tips to consider as you make your plans:
- Don’t save it all in one basket: While it can be cost-efficient and convenient to deal with one financial institution, within that one institution, aim to have a mix of investment accounts. Ideally, you’ll have a combination – registered retirement savings plan (RRSP), tax-free savings account (TFSA) and a non-registered account. Because tax and withdrawal rules differ between account types, the mix gives you maximum planning flexibility to manage your income distribution in retirement.
- Invest for growth: Many people will now spend more years in retirement than they did in their careers. With many retirements now spanning 30 years or longer, the need for equity investments in a retirement portfolio can be more important than ever. Yes, equities carry substantially short-term risks, but the higher long-term returns they generate can extend the life of a portfolio and help offset the impact of inflation.
- Consider alternative products: In addition to your investment savings, it pays to explore other products that can help you achieve your financial goals for retirement. For example, permanent life insurance has a cash value that can supplement retirement income and provide a legacy for family members, or cover estate tax liabilities. And life annuities – while not providing income flexibility – offer the benefit that those living into their 90s and beyond love: guaranteed income for as long as you live. Both products are worth discussing with your financial advisor.
- Delay the start of your government benefits: Government benefits – like those from the Canada/Quebec pension plan and Old Age Security (which is only paid in whole or part to those with annual incomes below about $120,000) – are both inflation-protected and, more importantly, paid for life. And if you can afford to delay receiving these benefits until age 70, you’ll get a much bigger payout.
For example, if you start receiving your CPP retirement pension at the age of 70, your pension amount will be 42% more than it would have been if you had taken it at 65. And if you delay receiving your Old Age Security pension to age 70, your monthly pension payment will be 36% more than it would have been at age 65. While these two benefits may not represent huge payouts in the early years of your retirement, they can be an important guaranteed income stream in your later years, when other assets may have been depleted but the need for income remains.
And if you want to make age 100 your goal, BMO outlines some strategies to get you there: https://www.bmo.com/assets/pdfs/gam/BMO-Report-Living-to-100-en.pdf.
Happy living, and thank you for reading!