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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, you might need to take into account 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 might be since they’ll cowl fewer years, says Jason Heath, managing director of Goal Monetary Companions Inc.
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“Usually talking, if you happen to stay 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 Publish columnist, just lately spoke with FP’s Larysa Harapyn about alternative strategies 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 life-style perspective, may be actually rewarding and enhance the transition,” Heath stated. “In an ideal world, it’s deliberate, it’s sluggish, 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. “Loss of life and retirement will not be 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 save cash on the price of residing. Heath stated there’s alternative in nations resembling 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 areas.
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For individuals who choose to remain nearer to dwelling, tapping into your own home fairness by downsizing or borrowing towards your own home are choices in the best circumstances, notably for many who stay in huge cities the place home prices are higher.
“If it buys any person 5 extra years of their dwelling, for instance, borrowing towards that worth earlier than they promote it, I don’t assume it’s a foul factor,” stated Heath.
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