Retirement planning for widows and widowers

November 24, 2021 drifinancialLeave a comment

You’ve lost your spouse/partner and now you’re solely responsible for your own retirement pension. Do you know what to do? Follow my four-step process to estimate your new retirement pension.

Executive Summary

The death of Mary meant the loss of my best friend and the end of many of my retirement plans and goals. During the first few months after becoming a widower, grief prevented me from updating or even thinking about my retirement plan. Eventually, the brain fog lifted, and I realized how much my retirement plan had changed.

I began worrying about my new retirement reality, yet as more time passed, I realized that developing a new retirement plan was part of the healing process. As I began to plan my new retirement dreams and goals, my worry gradually lessened, and I began looking forward to the future.

Here is my four-step process to help widows and widowers calculate their new retirement pension and take a positive step forward on their own.

The whole process starts by estimating your retirement spending, selecting a target date for achieving financial independence, making a few assumptions, and finally plugging all the information into a retirement calculator.

Sounds easy but if you need help with any of the steps, contact me and we can work on the four-step process together.

The painful reality of a widow’s retirement planning

My late wife and I planned to retire around the age of 65 and spend more time travelling and enjoying our kids and friends.

Having always prepared a retirement plan that addressed the income goals of two people, everything changed when I lost Mary. On that sad day, all of our retirement dreams died, and I was left to find ways to move forward on my own, including rewriting my retirement plan.

My new reality included re-evaluating my income, expenses, income taxes and government benefits. For me, my lifestyle expenses did not drop by 50% as might be expected but closer to 30%. I lost Mary’s second income and was shocked at the lower CPP and OAS entitlement for widowers.

Other widows and widowers may have their own unique retirement challenges such as:

They may lack the experience of handling their finances.
Their spouse’s life insurance proceeds may be insufficient or nonexistent.
They may not have a full-time job, may not be part of a pension plan and may have lost their spouse’s employee benefits.
They may still face the cost of raising and educating their children.
They may be responsible for taking care of their parents.

Rewriting your retirement plan starts with the numbers

It’s safe to say, a widow’s retirement plan and estimated retirement income will be very different after losing their spouse/partner. Here are the four-steps required to rewrite your retirement plan and estimate your retirement income.

1) How much are you spending?

During my 25+ years as a financial planner, I find that this question strikes fear in the eyes of my clients. The most common answer is “I don’t know” or “we spend everything we make… I think?”

Determining how much one spends has always been difficult to calculate because it involves manually tracking expenses on a spreadsheet. The process is time consuming and prone to mistakes consequently, many people give up and “wing it” when estimating their expenses.

Fortunately, we now have a budget tracker called Mint.com by Intuit. The app helps people track where their money is spent and allocates the spending to major categories (such as groceries, gas, mortgage etc.). The work is done automatically, without the need of spreadsheets, and thankfully takes about one hour per month to maintain.

Once you understand how much you’re spending, the next step is to add additional expenses that will be incurred during your retirement years (such as additional travelling, charitable donations etc.) and subtract expenses that disappear when you retire (such as car expenses, clothing expenditures etc.).

For example, let’s assume I spend $75,000 per year. In retirement, I plan to take at least two additional trips per year and downsize my home. Hence, I estimate my expenses will increase by $15,000 due to the extra vacations but will decrease by $30,000 due to a smaller house.

In this example, I assume retirement expenses of $60,000 per annum (indexed to 2% inflation) (or $73,000 before Federal and Ontario tax).

Many people decide to live frugally prior to retirement so that they can live a more comfortable life in their senior years, such as my podcast guest: Miriam. Check out my podcasts today.

2) When would you like to become financially independent (or “retire”)?

I will never ask, “when are you planning to retire? Instead I will ask, “when would you like to be financially independent?” Read my e-Book: Live well, stay rich, never retire for more information on the difference between the two definitions.

Some widows choose 65 as their target age for financial independence but like estimating your widow’s retirement spending (step 1), it’s a personal decision and everyone’s circumstances are unique.

For simplicity, I assume financial independence by age 65.

3) Let’s make a few conservative assumptions (use mine or make your own).

a) Age of death

According to Statistics Canada, a 65-year-old widow is expected to live another 21 years, or until age 86.

To be conservative let’s assume a life expectancy of 90¹.

b) Inflation rate

According to the Bank of Canada, the average annual inflation in Canada from September 1915 to September 2020, was 3.01%.

For simplicity, we’ll assume 3% inflation².

c) Investment returns

The average annual investment returns for the S&P/TSX (a benchmark for Canadian stocks) for the last 10, 20 and 50-year periods (as of December 31st, 2020) were 5.8%, 6.2% and 9.3% respectively. I estimate that short-term Canadian equities returns will gradually rise to match their long-term historical averages, but let’s be conservative.

I’ll assume that Canadian equities will grow at 7% annually³.

The average annual investment returns for the 10-year Government of Canada bond (a benchmark for the Canadian fixed income) for the last 10, 20 and 50-year periods (as of December 31st, 2020) were 2.2%, 3.4% and 6.9% respectively. Since we’re currently at the historically low-end of interest rates and higher inflation seems possible, I’ll assume a lower bond return going forward.

I’ll assume an average return from 10 year bonds at 3% annually.

d) Asset allocation

Asset allocation refers to the percentage of cash allocated amongst the various asset classes such as stocks, bonds and cash (I’ll ignore the other asset classes for the purpose of my example). The percentage in each class depends on many personal factors such as one’s risk tolerance, age, other assets, etc.

For simplicity, I will assume a 65-year-old widow has an asset allocation of 60% equities and 40% bonds.

e) Expected investment return

Assuming an asset allocation of 60% Canadian equities and 40% 10-year government of Canada bonds AND an expected rate of return of 7% for equities and 3% for bonds.

The expected return from this portfolio is 5.4% before fees (7% x 60% + 3% x 40%)

f) Other sources of income

Assume full CPP: $14,445 per annum.
Assume full OAS: $7,623.12 per annum.
Assume no pension plan.

In short, I need a pool of money that generates an annual retirement pension of $37,932 (60,000-14,445-7,623) rounded up to $40,000 plus 3% inflation from the age of 65 to 90. I will also assume the funds grow at an average investment return of 4.4% (5.4% less advisor fee of 1%).

4) Plug your assumptions into a retirement calculator:

For simplicity, I’ll assume that all monies are in an RRSP account (note: widows may also save in a TFSA, a cash account, in real estate, etc.). I used the retirement planning calculator available on Scotiabank’s website. Try it for yourself. It’s very simple to use.

Retirement savings calculator

Once all of the assumptions were entered, the program calculated that a retirement pool of approximately $600,000 is needed to generate after-tax target income of $60,000 per annum, indexed to an annual inflation rate of 3% and integrated with CPP and OAS. The retirement income from all sources (approximate numbers are used for the illustration) were:

Final thoughts

In summary, retirement plans and retirement income both change when you become a widow or widower. Once the “brain fog” lifts, revisiting your retirement plans is part of the healing process and a positive way to move forward on your own.

If you’re still unsure about how to determine your retirement pension or need guidance in selecting an appropriate asset allocation for your unique situation, please contact me and I will personally introduce you to our office and the services that we provide.

If you are newly widowed and you’re not sure how to plan for the future, please give us a call and I will personally introduce our office and our services. In fact, if you have any goal in mind — big or small — that requires some financial planning, but you’re struggling with where to start, reach out to our team. We have the expertise and life experiences to help guide you to achieving your goals.

Learn more:

The process of finding a financial advisor can be overwhelming. It is our job to make that process simpler and easier.

Dri Financial Group’s proprietary Wealth Navigator Process is designed with you in mind.

Its structured framework helps you make an informed decision and feel confident in our team and management practices before we get started.

We offer you a range of services from creating bespoke financial plans and providing investment advice to helping you take advantage of our investment models. If you would like more information on the Wealth Navigator Process or our team, call me any time at 416.355.6370 or email me at richard.dri@scotiawealth.com.
—

Beyond helping you manage your finances, we take pride in motivating, educating and helping you expand your financial literacy. We are here to answer any questions you have and to help you feel in control of your financial destiny.

If you are ready to dive deeper into your financial literacy journey, we have a wide range of free tools and educational resources available.

Subscribe to our Never Retire Newsletter
Contact us to order a complimentary e-book
Check-out our latest Wealth Navigator Podcast
Follow me on LinkedIn

¹ https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1310013401
² https://www.bankofcanada.ca/rates/related/inflation-calculator/
³ https://www.taxtips.ca/stocksandbonds/investmentreturns.htm

source https://richarddri.ca/retirement-planning-for-widows-and-widowers/

8 Retirement Income Sources for Widows

November 21, 2021 drifinancialLeave a comment

After the loss of a spouse, many widows/ers are overwhelmed by grief and the fear of not having enough retirement income to maintain their lifestyle.

Executive summary:

When I meet a widow or widower for the first time, the question I often hear is “Richard, will I be okay—financially?” The truth is, the best time to have asked and planned for that question was 20+ years ago, however, that doesn’t help widows/ers today!

Here are my eight pro-tips for possible retirement income sources. They include life insurance proceeds, employer pension plans, net rental income, selling personal property, continuing to work, collecting a CPP survivor pension and investing registered and non registered assets.

Ultimately, a financial advisor may be able to help a widow/er identify sources of retirement income and recommend an investment strategy that matches their risk level and generates the necessary monthly income to maintain their lifestyle.

Am I going to have enough retirement income?

Understandably, after losing a spouse, many widows worry about their financial future. They ask themselves:

Will I be able to continue to live in my current home?
Will I have enough money to pay for my children’s tuition expenses?
Will I be able to retire and maintain my lifestyle?

Restated, the question I often hear from widows/ers is, “Will I be okay—financially?”

The reality of a widow’s retirement lifestyle

Unfortunately, the financial concern is more significant for widows. According to a recent study by Statistics Canada:

“Senior women aged 65 years and over between 1990 and 2001, the standard of living declined continuously for those who became widowed, while it remained relatively constant for their married counterparts.

Five years after they were widowed, median family income declined 9.8% for widows. This was more than six times greater than the 1.5% decline among senior women who remained married during the same time frame.

Not only did the standard of living of widows decline; more of them also fell below the low-income threshold as a result of widowhood. Five years after widowhood, 9.4% of widows were living in low income, almost three times higher than the proportion of women (3.6%) who were in low income in the year before they were widowed¹.

Eight sources of retirement income

I have been in exactly the same situation. Thankfully, I was able to lean on my professional experience to overcome my concerns. For those without a financial background, here are my eight pro-tip sources of retirement income that may be available to widows/ers.

1. Life Insurance.

Many couples purchase life insurance to replace income lost from the death of either spouse. As a financial planner, I usually help couples calculate the amount of insurance needed on the hypothetical death of spouse A or B.

Often the amount of insurance will cover outstanding debts (such as home mortgages or lines of credit), the cost of raising any children (such as food and tuition), and a portion is usually allocated to assist the survivor with their retirement goals.

Life insurance proceeds may be invested in dividend paying stocks, life annuities, rental real estate and/or Guaranteed Investments (such as GICs and government bonds), which all provide a monthly income and may be helpful in generating part or all of a widow’s retirement income.

Pro-tip #1: Locate your spouse’s life insurance policies and claim a death benefit (assuming they exist).

2. Company Pension plan and group death benefit.

Many employers provide a retirement pension plan (defined benefit pensions, defined contribution pensions, and group-RRSPs) for all employees and generally, the plan usually includes a survivor pension for the employee’s widow/er. From my experience, the survivor pension ranges from 60% to 80% of the employee’s pension entitlement.

As well, some employer group benefits include an option to purchase employee life insurance (and spousal life insurance). Often the employee’s group coverage is 2-5 times salary.

Pro-tip #2: Call your spouse’s employer and determine if you are eligible for any survivor pension benefits and/or life insurance proceeds.

3. Income generating assets such rental properties.

Some couples invest in rental real estate in the GTA. These properties may generate a positive cash flow after all expenses. In fact, many entrepreneurs, including my client, Doctor Bob, have been investing in rental real estate properties for the sole purpose of supplementing their future retirement income.

If rental properties exist, meet with your professional advisors and determine the extent (if any) of the positive cash flow expected from this asset class.

Pro-tip#3: Do you have rental properties? If so, they may provide a healthy source of retirement income.

4. Selling your spouse’s personal assets.

In some cases, the deceased spouse may have assets of value that have little interest to the surviving widow/er.

For example, I recently met a widow whose late husband had an extensive and expensive car collection. She didn’t share his passion for cars and needed the funds to cover debts. We suggested selling the cars and putting the proceeds towards debt reduction and saving for her retirement.

Pro-tip#4: Does your spouse have assets that you no longer want or need, if so, consider selling to raise cash. Not only can they release cash, but the sale of these personal items can also help you to move on psychologically.

5. Continue working.

For some widows/ers, the least favourable option is to continue working and earning an income, which may be difficult during the first few weeks/months due to grief or family obligations (such as children), but becomes an obligatory option for many reasons, not solely for earning money.

From my experience, work provides a healthy opportunity to engage with team members and clients on an emotional and mental level that was missing after the loss of Mary. As well, working fed my passion for helping clients and my love for the industry. On many mornings, it was the sole reason I jumped out of bed when I wanted to hide under the covers and sleep.

Pro-tip#5: If possible, keep working because it is good for your pocketbook and your mental health. Check out my e-Book: Live well, stay rich, never retire to learn more.

6. Registered investment accounts such as RRSPs, Spousal RRSP, LIfs and TFSAs.

Most couples save money in registered accounts such as RRSPs and TFSAs, fortunately, these accounts may be transferred, on a tax free basis, to the surviving spouse on death of a spouse (assuming the spouse is the beneficiary). The tax (if any) is paid on the death of the widow/er (second spouse) on any remaining funds in the registered accounts.

The RRSPs may be converted into RIFs (Registered investment Fund) and may provide regular cash flow to the widow/er. TFSAs can also be gradually liquidated, which provides retirement cash flow, on a monthly basis.

Pro-tip#6: Consolidate all registered accounts and prepare a withdrawal plan.

7. Non Registered investment accounts (such as cash/open accounts).

Cash accounts are often owned in “Joint Tenancy”, which permits the assets to pass from the deceased’s ownership to the surviving spouse, tax free.

Alternatively, cash accounts may be owned in “Tenants in Common”, in which case, the deceased’s portion of the assets go to their heirs as determined by their will.

Pro-tip #7: Consolidate all investment accounts registered as “Tenants in Common” and prepare a withdrawal plan.

8. Collect all eligible government pensions.

Depending on several conditions, widows/ers may be eligible to receive additional retirement benefits from the Canada Pension Plan Survivor Pension, see my blog called “CPP for widows/ers planning for retirement” for additional information.

Pro-tip #8: Apply for the CPP Survivor pension soon after the death of a spouse.

Final thoughts

My eight pro-tips are just a few possible sources of retirement income. Hopefully, one or more sources will provide sufficient retirement income to maintain your lifestyle as a widow/er.

If you need assistance in calculating your entitlement to an employer/government benefit or assistance in organizing and investing assets in order to generate monthly income, please contact me for a complimentary appointment.

Learn more:

The process of finding a financial advisor can be overwhelming. It is our job to make that process simpler and easier.

Dri Financial Group’s proprietary Wealth Navigator Process is designed with you in mind.

Its structured framework helps you make an informed decision and feel confident in our team and management practices before we get started.

If you are ready to dive deeper into your financial literacy journey, we have a wide range of free tools and educational resources available.

Subscribe to our Never Retire Newsletter
Contact us to order a complimentary e-book
Check-out our latest Wealth Navigator Podcast
Follow me on LinkedIn

source https://richarddri.ca/8-retirement-income-sources-for-widows/

Why widows should sell the family home

November 11, 2021 drifinancialLeave a comment

Widows and widowers should not let their guilt or friends dissuade them from selling the family home nor prevent them from using the proceeds to improve their life and retirement.

Executive summary

Humans are very easily led by our emotions. In some ways, this sets us apart and makes us unique in the animal kingdom, but it can also have a detrimental effect on our retirement planning.

Recently, I spoke with a widow who was firmly opposed to selling her family home. I understood her feelings because they’re feelings that I’ve had frequently since Mary passed away. However, after some reflection, I have decided to sell my family home to fund a better retirement lifestyle.

Here are the five reasons why:

Improves retirement cash flows,
Provides the cash flow required to purchase a long-term care insurance policy and minimizes the financial risk from a sickness requiring expensive long-term care stay,
Makes it easier to “mentally” move forward on your own,
Provides the opportunity to declutter possessions that may hold you back, and
Allows you to explore new relationships.

If you are newly widowed and unsure whether to sell your family home, or even rent, please give our office a call and we can discuss your options. We have the expertise and life experiences to help guide you to achieving your goals.

The emotional ties to bricks and mortar

I recently began working with a 62 year old widow who owns a small investment portfolio and a valuable family home in Toronto’s west end. After completing her retirement projection, we concluded she would deplete her liquid investments long before a woman’s average life expectancy of 84 years¹.

We began discussing the possibility of selling the family home and either renting or buying a small condo. The proceeds from the family home would allow her to maintain her lifestyle expenditures well into her late 90s (including the cost of rent) but would leave a much smaller inheritance to her two children.

Her response to our suggestion was surprising: she hated the idea, in fact, she indicated the family home would be sold, only after her death.

I was curious and I asked her to help me understand why she would accept a lower standard of living during retirement in exchange for a larger inheritance for her children. The widow had many reasons for maintaining the family home, but I can summarize her argument into three points:

Firstly, she felt guilty about using the proceeds from the family home to improve her lifestyle. Downsizing was something she and her late spouse had planned to do together and now as a widow, she felt guilty if she unilaterally profited from the proceeds of the family house.

Secondly, she loved her kids and wanted to help them buy a family home in the GTA. A large inheritance, even if it wouldn’t be available until she died, would be a big financial help for her two boys.

Thirdly, she feared her friends and family would criticize her decisions to sell the family home and improve her retirement. She could hear them whisper: she’s taking advantage of the situation.

I tried to change her mind, but she wouldn’t budge.

Written from the heart

I write this blog for all widows and widowers who want/need to sell the family home but can’t overcome their guilt or are experiencing difficulty moving forward after the death of their spouse.

Here are five reasons to sell the family home after the death of a spouse/partner:

1) The proceeds from the family home may improve your retirement lifestyle.

As a widower myself, I believe my family home is an asset (like stocks or bonds) and can be used to fund my pre- and post-retirement lifestyle.

My late wife and I financially supported our three children through private schools and post-graduate degrees and today, I feel my job (financially speaking) is complete. If financially possible, I will assist my children, but I will not feel obligated to leave an inheritance of any size.

Instead, I plan to sell the family home and either scale down or rent and use the proceeds to supplement my retirement lifestyle and I will not feel guilty for doing so.

How I feel: I will use the home proceeds to improve my retirement lifestyle and my children are welcome to enjoy whatever assets ( if any) are left.

2) The house proceeds may provide funds for long-term care.

During my tenure, as a (now retired) board member of a prominent long-term care provider in Toronto, I learned two valuable lessons 1) long-term care is very expensive and 2) very few people plan for a 3-4 year stay in a facility.

Currently, long-term care facilities cost between $1,500 – $2,500 per month for a publicly-funded facility and approximately $5,000+ for a private facility. You don’t need a calculator to determine that a 3-5 year stay at a facility can easily wipe out all/most of your retirement savings.

Everyone wants a long and healthy life but few plan for unexpected health issues especially during the later part of life.

According to the Council on Aging of Ottawa, October 2008, “For those over age 65, 43% will, at some point in their remaining years, require long-term care and spend time in a nursing home or long-term care facility for an average length of stay of three to four years. One in five will stay more than five years².

By selling the family home, widows have the opportunity to allocate a portion of the proceeds toward a long-term care insurance policy, thereby reducing the financial risk of a 3-5 year stay in a long term facility.

How I feel: I’ll direct a portion of the proceeds from the sale of the family home to a long-term care insurance policy thereby mitigating the costs of a prolonged long-term stay.

3) Selling the family home may help a widow or widower move forward.

Many widows and widowers have difficulty moving forward after the loss of a spouse, I know, it’s difficult. The first year after Mary’s death, I couldn’t think straight, I had difficulty sleeping and I had no idea how I would rebuild my life.

Slowly the fog lifted, my memory and decision-making abilities improved, and I began planning how I could move forward, without Mary.

I love our family home and if Mary had not died, we would have probably lived in the home for many, many more years.
But the more I pondered my future, the more I realized I wanted and needed a fresh start, and that included selling the family home.

For me, every room in the house holds happy (and a few sad) memories of Mary and our children. I find it difficult to rebuild under these conditions. By planning “Where” I will move and “When” I will move, I find myself getting excited about my future and my grief becomes more manageable.

We were married for 33 years and we enjoyed a strong relationship but sadly, she’s gone, and I must find ways to move forward on my own. Don’t misunderstand me! My grief from losing Mary will never disappear but I find that my grief doesn’t consume me when I’m positive about my future. Thus, for me, that means selling the family home and building a new family home in a new location.

How I feel: I will not allow grief to prevent me from moving forward with my life as a father, son, and friend. I’m sure Mary would be happy if I found ways to move forward.

4) Selling the family home may allow a widow to declutter their physical life.

It’s been nearly two years since Mary’s death and her clothes, shoes, winter coats, cosmetics, and other personal items are exactly where she left them before entering the hospital. In some ways, I still hope that one day, Mary will walk through the door and yell “Rick, what did you do with my personal stuff?” Of course, this will never happen, and this line of thinking prevents me from moving forward.

Here’s my plan for decluttering the family house:

Prior to selling the family home, my three kids and I will select and remove any item we wish to keep. For example, I will hold the paintings, photo/video albums, some of the China and silverware, the kids may also claim some of their favorite childhood items.

I don’t expect we will keep much of the “stuff” in the family home, remember it’s my objective to find ways to “move forward”. At the moment, my household “stuff” clutters my mind with thoughts about the past and prevents me from thinking clearly about the future.

The next step involves hiring a company with expertise in selling household contents. They will be responsible for selling anything of value and emptying the house so it can be sold. The net proceeds from the sale will be donated to the Princess Margaret Hospital in Mary’s name.

My friend and coach, Dan Sullivan says, “Make your future bigger than your past” and I hope to follow this mantra. Selling unnecessary stuff unties me from the past and allows me to plan for a bigger and better future.

On a side note, my home is perfect for a family looking to grow. I would love to know that it is creating new memories for a new family, and with a few modifications, it would be ideal for a family that may have physical disabilities or other accessibility issues, such as those homes that Jeffrey Kerr, licensed RE/MAX realtor and Vice President of Winwood Country Homes, Inc specializes in. Listen to my podcast to learn more.

How I feel: I will move forward by decluttering my physical world and allow space for my mind to develop new ideas and set new goals.

5) Selling the family home may open the opportunity to welcome someone new into a widow’s life.

Moving forward for me also includes finding someone special who is willing to share the rest of their life with me.

I assume many widows/widowers have no psychological issues with inviting someone into the matrimonial home, but to me it feels like a betrayal of my vows. If I bought a new home, it would be mine, and I’d be free to invite whomever into my home and my life.

How I feel: Moving forward is as much psychological as it is, emotional and physical. If I’m going to move forward, I have to sell OUR home and move forward into MY home.

Final thoughts

I understand first-hand that it is difficult to move forward after the death of a spouse, and as creatures, humans can be led by our emotions. While this sets us apart, it can also hold us back, which is why I recommend that widows and widowers sell their family home to provide a solid foundation on which to move forward:

It improves retirement cash flows,
It provides the cash flow required to purchase a long-term care insurance policy and minimizes the financial risk from a sickness requiring expensive long-term care stay,
It makes it easier to “mentally” move forward on your own,
It provides the opportunity to declutter possessions that may hold you back, and
It allows you to explore new relationships.

If you are newly widowed and you’re not sure what to do with your family home or how to plan for the future, please give us a call and I will personally introduce our office and our services. In fact, if you have any goal in mind — big or small — that requires some financial planning, but you’re struggling with where to start, reach out to our team. We have the expertise and life experiences to help guide you to achieving your goals.

Learn more:

The process of finding a financial advisor can be overwhelming. It is our job to make that process simpler and easier.

Dri Financial Group’s proprietary Wealth Navigator Process is designed with you in mind.

Its structured framework helps you make an informed decision and feel confident in our team and management practices before we get started.

If you are ready to dive deeper into your financial literacy journey, we have a wide range of free tools and educational resources available.

Subscribe to our Never Retire Newsletter
Contact us to order a complimentary e-book
Check-out our latest Wealth Navigator Podcast
Follow me on LinkedIn

¹ https://worldpopulationreview.com/countries/life-expectancy
² https://richarddri.ca/retirement-and-realty/

source https://richarddri.ca/why-widows-should-sell-the-family-home/

Real estate resizing and retirement planning

November 5, 2021 drifinancialLeave a comment

Widows and widowers should not let their guilt or friends dissuade them from selling the family home nor prevent them from using the proceeds to improve their life and retirement.

Executive summary

Humans are very easily led by our emotions. In some ways, this sets us apart and makes us unique in the animal kingdom, but it can also have a detrimental effect on retirement planning.

After speaking with a widow who was firmly opposed to selling her family home after the death of her spouse. I was drawn to releasing my five reasons to sell the family home to fund a better financial future.

Selling your family home:

Improves retirement cash flows,
Provides the cash flow required to purchase a long-term care insurance policy and minimizes the financial risk from a sickness requiring expensive long-term care stay,
Makes it easier to “mentally” move forward on your own,
Provides the opportunity to declutter possessions that may hold you back, and
Allows you to explore new relationships.

If you are newly widowed and unsure whether to resize your home, or even rent, please give our office a call and we can discuss your options. We have the expertise and life experiences to help guide you to achieving your goals. READ MORE BY CLICKING HERE.

The emotional ties to bricks and mortar

Her response to our suggestion was surprising: she hated the idea, in fact, she indicated the family home would be sold, only after her death.

Thirdly, she feared her friends and family would criticize her decisions to sell the family home and improve her retirement. She could hear them whisper: she’s taking advantage of the situation.

I tried to change her mind, but she wouldn’t budge.

Written from the heart

I write this blog for all widows and widowers who want/need to sell the family home but can’t overcome their guilt or are experiencing difficulty moving forward after the death of their spouse.

Here are five reasons to sell the family home after the death of a spouse/partner:

1) The proceeds from the family home may improve your retirement lifestyle.

As a widower myself, I believe my family home is an asset (like stocks or bonds) and can be used to fund my pre- and post-retirement lifestyle.

Instead, I plan to sell the family home and either scale down or rent and use the proceeds to supplement my retirement lifestyle and I will not feel guilty for doing so.

How I feel: I will use the home proceeds to improve my retirement lifestyle and my children are welcome to enjoy whatever assets (if any) are left.

2) The house proceeds may provide funds for long-term care.

Everyone wants a long and healthy life but few plan for unexpected health issues especially during the later part of life.

How I feel: I’ll direct a portion of the proceeds from the sale of the family home to a long-term care insurance policy thereby mitigating the costs of a prolonged long-term stay.

3) Selling the family home may help a widow or widower move forward.

Slowly the fog lifted, my memory and decision-making abilities improved, and I began planning how I could move forward, without Mary.

I love our family home and if Mary had not died, we would have probably lived in the home for many, many more years. But the more I pondered my future, the more I realized I wanted and needed a fresh start, and that included selling the family home.

How I feel: I will not allow grief to prevent me from moving forward with my life as a father, son, and friend. I’m sure Mary would be happy if I found ways to move forward.

4) Selling the Family home may allow a widow to declutter their physical life.

Here’s my plan for decluttering the family house:

How I feel: I will move forward by decluttering my physical world and allow space for my mind to develop new ideas and set new goals.

5) Selling the family home may open the opportunity to welcome someone new into a widow’s life.

Moving forward for me also includes finding someone special who is willing to share the rest of their life with me.

How I feel: Moving forward is as much psychological as it is, emotional and physical. If I’m to have the right mindset to move forward, I have to be in the right setting to move forward.

Final thoughts

It improves retirement cash flows,
It provides the cash flow required to purchase a long-term care insurance policy and minimizes the financial risk from a sickness requiring expensive long-term care stay,
It makes it easier to “mentally” move forward on your own,
It provides the opportunity to declutter possessions that may hold you back, and
It allows you to explore new relationships.

Learn more:

The process of finding a financial advisor can be overwhelming. It is our job to make that process simpler and easier.

Dri Financial Group’s proprietary Wealth Navigator Process is designed with you in mind.

Its structured framework helps you make an informed decision and feel confident in our team and management practices before we get started.

If you are ready to dive deeper into your financial literacy journey, we have a wide range of free tools and educational resources available.

Subscribe to our Never Retire Newsletter
Contact us to order a complimentary e-book
Check-out our latest Wealth Navigator Podcast
Follow me on LinkedIn

¹ https://worldpopulationreview.com/countries/life-expectancy
² https://richarddri.ca/retirement-and-realty/

source https://richarddri.ca/real-estate-resizing-and-retirement-planning/

CPP for widows/ers Planning for Retirement

November 5, 2021 drifinancialLeave a comment

After the loss of a spouse, widows/ers may be shocked at the CPP survivor benefit they will receive and the impact on their retirement income.

Executive summary

After becoming a widow, I was shocked to learn how CPP survivor benefits are calculated and how little the benefit will contribute to my retirement. In fact, after the premature death of my wonderful Mary, our CPP benefit, which suddenly became MY CPP benefit, would be almost 43% less than originally calculated.

Yet, after the loss of my wife, the financial burdens continued. Due to my age, the loss of Mary’s OAS benefits and a huge OAS clawback due to higher RRSP withdrawals, I will receive approximately $26,000 per year less than expected.

And the complexities continue. A widow/er can only receive one survivor’s pension, even if they have outlived multiple spouses. Additionally, the maximum CPP for a Widow is $1,203.75 (in 2021) per month, so if you’re already personally entitled to $1,203.75 per month, then you don’t get a survivor pension. There’s no DOUBLING UP CPP benefits above your monthly personal max of $1,203.75.

If you are newly widowed and not sure how much CPP and OAS income you’ll receive OR you have been wondering if you should claim your CPP and OAS early (before 65) or defer until age 70, please give our office a call and we can discuss your options. We have the expertise and life experiences to help guide you to achieving your goals.

How it happened to me

Mary died on January 15th, 2020, at the age of 57 and I was 58 (Note: the surviving spouse’s age is important when calculating CPP survival benefit). She was mostly a stay at home mom, raising our three children, volunteering at school events, driving kids to/from after-school activities and basically taking care of our family needs.

She trained as an accountant and when our children were old enough to attend school full time, she landed a part-time job with a local accountant and assisted on various bookkeeping engagements. Her employment was sporadic and rarely made maximum annual CPP contributions, but she did contribute almost her entire working career.

So I expected a lower CPP survivor pension but what I received was shocking. It turns out that my monthly CPP survivor benefit as a widower is $547.01 or $6,564.12 p.a. (plus inflation protection). Note the maximum in 2021 is $1,203.75 or $14,445 p.a.

The shocking truth about CPP survivor benefits — part one

I assumed we would both work until 65 and live to 90. I was shocked because our retirement plan assumed Mary and I would both work until 65, and after a fulfilled retirement, we’d die at 90. I also assumed that I’d be eligible for 100% of my CPP benefit and Mary would receive 75% of her benefit.

In short, our retirement plan included a combined annual CPP payment of $25,278 (along with an annual inflation adjustment.) Sadly, Mary didn’t work until 65 nor did she survive until 90 hence, I had overestimated the combined CPP we were entitled to receive.

^[1] Source: https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-benefit/amount.html

The worst is yet to come, read on!

According to the Government of Canada’s website, CPP survivor pension is based on my age when Mary died. The website has two age groups:

If you are age 65 or older

You will receive 60% of the contributor’s retirement pension, if you are not receiving any other CPP benefits.

If you are under age 65

You will receive a flat rate portion and 37.5% of the contributor’s retirement pension, if you are not receiving any other CPP benefits.

Thus, in my case, my flat rate portion is $197.34 plus 37.5% of Mary’s CPP benefit, which equates to $547.01 per month. No where near the expected $902.83 p.m. that I had estimated in our financial plan. I received my first CPP survivor benefit in February, 2020 ($547.01) and will continue to receive the reduced payment (plus inflation) until I start collecting my own CPP.

The shocking truth about CPP survivor benefits — part two

I assumed the deceased spouse’s CPP would be added to the surviving spouse’s CPP. I was wrong again and I overestimated our combined CPP entitlement. If you keep reading the rules, you will read, “The most that can be paid to a person who is eligible for the retirement pension and the survivor’s pension is the maximum retirement pension.”

^[1] Source: https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-survivor-pension.html

^[1] Source: https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-survivor-pension.htm

Getting my head around “the reality”

It means that the maximum CPP benefit allowed is $14,445 p.a. (in 2021) and stacking CPP survivor benefit and/or the CPP disability benefit over this amount is not permitted.

Allow me to summarize my new retirement reality as a widower planning for his retirement:

My retirement plan estimated combined CPP at 65 as $25,278 p.a. but as a widower who is already at the maximum CPP benefit, my CPP at retirement (65 years) is now estimated at only $14,445 p.a. — a 43% reduction in annual CPP income — OUCH!

Here’s the plot twist

1) A widower may only collect one Old Age Security (OAS) benefit.

Again, my retirement plan assumed we would both receive the maximum OAS from the age of 65. Today the maximum OAS is $626.49 p.m., so I assumed we would receive $15,035.76 p.a. However, widows/ers are not entitled to their late spouse’s OAS, so my retirement strategy now must plan for an OAS of $626.49 per month — a 50% reduction in annual OAS income — double Ouch!

2) Combine RRSPs and face possible OAS clawback when withdrawing funds.

As a widower, I’m entitled to a tax-free rollover of Mary’s RRSP into my plan. This is a great tax deferral opportunity but has one major unintended consequence. When I begin withdrawing RRIF payments, my retirement income will be higher because I’m withdrawing two minimum RRIF withdrawals (mine and Mary’s), so I’ll be subjected to the OAS clawback, which starts at incomes over $79,000 and is completely lost when net income surpasses $129,581. Given my retirement net income, I expected to have lost most of my OAS, however, if Mary had been alive, we could have split our pension income and avoided most, if not all of the OAS clawback.

3)My retirement income as a widower has now dropped significantly:

Total annual loss as a retired widow: $25,857 per year. If I live to the age of 90, my lost retirement income will be $672,282.

^[1] Source: https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/recovery-tax.html

It’s like navigating without a compass

1) Only one survivor’s pension

A widow/er can only receive one survivor’s pension, even if they had outlived multiple spouses. Hence, the widow/er will be paid on whichever benefit is largest.

2) Widows can remarry

A widow doesn’t lose survivor’s benefit if they remarry.

3) One-single monthly payment

If a widow already receives other CPP benefits (e.g. a CPP disability pension), all pension benefits are combined and paid in one-single monthly payment.

4) The max for 2021

The maximum total CPP benefit a widow/er receives, if receiving both the survivor’s pension and other CPP benefits, is the maximum retirement pension, which is $1,203.75 p.m. for 2021. No doubling up!

There are more negatives than positives (but here are a few)

While the pluses are minimal, it would be remiss of me to ignore them. There are additional benefits that can be claimed, if you or your children meet specific criteria.

1) Benefits for children under 25

The Canada Pension Plan (CPP) children’s benefits provide monthly payments to the dependent children of disabled or deceased CPP contributors. In my case, since my daughter is 19 years old and a full-time student, she will receive a benefit of $257.58 p.m. until she turns 25 or ceases to be considered a full time student.

2) Death Benefit

Under certain conditions, the estate will receive a one-time death benefit of $2,500.

3) Allowance for survivors

A non-taxable benefit available to low-income seniors between the ages of 60 and 64 whose spouse or common-law partner has died and their income is below $25,560.

^[1] Source: https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-childrens-benefit.html

^[1] Source: https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-death-benefit.html

^[1] Source: https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/guaranteed-income-supplement/allowance-survivor.html

Emergency and financial care with Dr. Paul Perlon

Final thoughts

After the loss of a spouse, a widow/er may face a significant drop in CPP and OAS benefits in their retirement years. They may face a situation where they receive less income and pay higher tax. Yet his/her expenses such as property taxes and utilities may keep rising even after the death of a spouse. A widow/er may need to rely more heavily on their RRSP and TFSA to close the gap caused by the reduction in CPP and OAS, which will actually have a negative effect on their OAS.

The best time to compensate for a possible reduction in expected CPP and OAS is before either spouse dies. A financial planner may run “what if” scenarios and determine if the surviving spouse can/cannot maintain their lifestyle after the death of their spouse. As Dr Paul Perlon, emergency medical physician in Toronto, understands the nuances of CPP and OAS benefits, which is why he has disability insurance and has been raising the amount on his birthday every year to maximize it. Listen to my podcast to learn more. So a solution for any shortfall — predicted or immediate — may be life insurance or a deferred annuity.

I realize this advice is like saying the best time to plant a tree was 30 years ago… and the second-best time to plant a tree is today. But, if you didn’t plan or made the wrong assumptions (like I did), then today is the second best day to understand and prepare for your scenario.

Finally, if you have any goal in mind — big or small — that requires some financial planning, but you’re struggling with where to start, reach out to our team. We have the expertise and life experiences to help guide you to achieving your goals.

Service Canada form

Some of the forms you may be required to complete include:

Survivor’s pension: CPP survivor’s pension and children’s benefits application for (ISP-1300)
Children’s benefits: Under 18 (ISP-1300) and Over 18 years (ISP-1400)
Death benefit: ISP-1200 form
Allowance for the Survivor: Form ISP-3008

Learn more:

The process of finding a financial advisor can be overwhelming. It is our job to make that process simpler and easier.

Dri Financial Group’s proprietary Wealth Navigator Process is designed with you in mind.

Its structured framework helps you make an informed decision and feel confident in our team and management practices before we get started.

If you are ready to dive deeper into your financial literacy journey, we have a wide range of free tools and educational resources available.

Subscribe to our Never Retire Newsletter
Contact us to order a complimentary e-book
Check-out our latest Wealth Navigator Podcast
Follow me on LinkedIn

source https://richarddri.ca/cpp-for-widows-ers-planning-for-retirement/

Earnings Growth Remains Strong, Despite Inflation Concerns

November 4, 2021 drifinancialLeave a comment

It was a strong start to the trading week on Monday, as the Dow Jones and S&P 500 closed at record highs.

So far this week, strong earnings from banks, consumer companies and manufacturers have calmed investors’ concerns about higher inflation, supply-chain disruptions and labour shortages. The TSX also closed higher on Monday, extending its winning streak to 14 straight sessions — the longest in Reuters data going back to 1979. It was another record-setting day Tuesday for the S&P 500 and Dow, both of which registered minor gains by day’s end. According to FactSet, of the nearly 150 S&P 500 companies to report quarterly earnings by Tuesday morning, more than 80% had beaten analyst forecasts. In Canada, however, the TSX fell more than 100 points, ending its historic winning streak.

It was an even rougher day for the TSX on Wednesday as Canada’s main stock index fell 218 points — more than 1% — thanks falling oil prices and BoC comments. Meanwhile, after two days of record highs, the Dow and S&P 500 took a step back Wednesday, shedding 266 points and 23 points, respectively. In the U.S., new data revealed that durable goods orders fell 0.4% in September from August, the latest sign that the U.S. economy slowed in the third quarter. As expected on Wednesday, the Bank of Canada held its benchmark rate steady at 0.25% but noted that rates could be rising as soon as next spring. The bank also announced the end of its quantitative easing program and the start of its “reinvestment phase,” where it will purchase only enough bonds to replace existing holdings as they mature. North American markets turned in strong performances on Thursday, lifted by another round of solid earnings reports. By Thursday’s close, the Dow and TSX each added roughly 240 points, while S&P 500 and Nasdaq climbed 45 points and 212 points, respectively.

U.S. Markets Up, TSX Off Slightly

For the four trading days covered in this report, the Dow rose 53 points to close at 35,730, the S&P 500 added 51 points to settle at 4,596, while the tech-heavy Nasdaq jumped 358 points to close at 15,448. In Canada, the TSX slipped 19 points to end at 21,197.

source https://richarddri.ca/earnings-growth-remains-strong-despite-inflation-concerns/

CPP for widows/ers Planning for Retirement

November 2, 2021 drifinancialLeave a comment

After the loss of a spouse, widows/ers may be shocked at the CPP survivor benefit they will receive and the impact on their retirement income.

Executive summary

Yet, after the loss of my wife, the financial burdens continued. Due to my age, the loss of Mary’s OAS benefits and a huge OAS clawback due to higher RRI withdrawals, I’m receiving approximately $26,000 per year less than expected.

And the complexities continue. A widow/er can only receive one survivor’s pension, even if they had outlived multiple spouses. Hence, the widow/er will be paid on whichever benefit is largest.

Additionally, the maximum total CPP benefit a widow/er receives, if receiving both the survivor’s pension and other CPP benefits, is the maximum retirement pension, which is $1,203.75 p.m. for 2021. No doubling up!

How it happened to me

The shocking truth about CPP survivor benefits — part one

The worst is yet to come, read on!

According to the Government of Canada’s website, CPP survivor pension is based on my age when Mary died. The website has two age groups:

If you are age 65 or older

You will receive 60% of the contributor’s retirement pension, if you are not receiving any other CPP benefits.

If you are under age 65

You will receive a flat rate portion and 37.5% of the contributor’s retirement pension, if you are not receiving any other CPP benefits.

The shocking truth about CPP survivor benefits — part two

Getting my head around “the reality”

It means that the maximum CPP benefit allowed is $14,445 p.a. (in 2021) and stacking CPP survivor benefit and/or the CPP disability benefit over this amount is not permitted.

Allow me to summarize my new retirement reality as a widower planning for his retirement:

Here’s the plot twist

1) A widower may only collect one Old Age Security (OAS) benefit.

2) Combine RRSPs and face possible OAS clawback when withdrawing funds.

3)My retirement income as a widower has now dropped significantly:

Total annual loss as a retired widow: $25,857 per year. If I live to the age of 90, my lost retirement income will be $672,282.

It’s like navigating without a compass

1) Only one survivor’s pension

A widow/er can only receive one survivor’s pension, even if they had outlived multiple spouses. Hence, the widow/er will be paid on whichever benefit is largest.

2) Widows can remarry

A widow doesn’t lose survivor’s benefit if they remarry.

3) One-single monthly payment

If a widow already receives other CPP benefits (e.g. a CPP disability pension), all pension benefits are combined and paid in one-single monthly payment.

4) The max for 2021

There are more negatives than positives (but here are a few)

While the pluses are minimal, it would be remiss of me to ignore them. There are additional benefits that can be claimed, if you or your children meet specific criteria.

1) Benefits for children under 25

2) Death Benefit

Under certain conditions, the estate will receive a one-time death benefit of $2,500.

3) Allowance for survivors

A non-taxable benefit available to low-income seniors between the ages of 60 and 64 whose spouse or common-law partner has died and their income is below $25,560.

Emergency and financial care with Dr. Paul Perlon

Final thoughts

The best time to compensate for a possible reduction in expected CPP and OAS is before either spouse dies. A financial planner may run “what if” scenarios and determine if the surviving spouse can/cannot maintain their lifestyle after the death of their spouse. As Pal Di Iulio, associate editor of Panoram Italia says in my podcast interview, “we shouldn’t be waiting until our 70s or 80s to think about our long-term medical, financial and quality-of-life needs.” So a solution for any shortfall — predicted or immediate — may be life insurance or a deferred annuity.

Service Canada form

Some of the forms you may be required to complete include:

Survivor’s pension: CPP survivor’s pension and children’s benefits application for (ISP-1300)
Children’s benefits: Under 18 (ISP-1300) and Over 18 years (ISP-1400)
Death benefit: ISP-1200 form
Allowance for the Survivor: Form ISP-3008

Learn more:

The process of finding a financial advisor can be overwhelming. It is our job to make that process simpler and easier.

Dri Financial Group’s proprietary Wealth Navigator Process is designed with you in mind.

Its structured framework helps you make an informed decision and feel confident in our team and management practices before we get started.

If you are ready to dive deeper into your financial literacy journey, we have a wide range of free tools and educational resources available.

Subscribe to our Never Retire Newsletter
Contact us to order a complimentary e-book
Check-out our latest Wealth Navigator Podcast
Follow me on LinkedIn

source https://richarddri.ca/cpp-for-widows-ers-planning-for-retirement/

The financial challenges of losing your spouse

November 2, 2021 drifinancialLeave a comment

In my book entitled “Live Well, Stay Rich, Never Retire” I spell out the secrets to achieving financial goals for business owners and professionals, and the truth is, the secrets apply to everyone, including me.

Executive summary

My life’s philosophy is explained in my e-Book: Live Well, Stay Rich, Never Retire and during the summer months, I reflected on this philosophy and how it applies to my life as a single father, friend, and new widower.

I asked myself three important questions:

Am I living my life deliberately?
Am I financially independent ?
Am I focusing on the activities that provide meaning, purpose and passion?

You’ll have to read the blog to learn my answers but here’s a clue.

While reflecting, I noticed a new interest and passion for the unique financial needs of people dealing with the lose of a spouse, or struggles of a divorce. Although the emotions are completely different, each group experienced the death of their “couple’s lifestyle” and the beginning of a new life, alone.

Since becoming a financial planner in 1992, I have always focused on the needs of pre and post retirees but to be true to my new passion, going forward, we’ll expand our focus to also include the specific needs of widows/ers and those in a mist of a divorce.

The blogs and podcasts will now focus on the financial needs of pre and post retirees ( as in the past) plus the specific needs of people in the midst of a major life transition such widowhood or divorce.

Here’s where I could use your help. If a friend or family member sadly becomes a widow/or or is in the mist of a divorce, please introduce The Dri Financial Group as the team that provides the emotional and financial expertise needed during life’s most traumatic changes.

The summer of 2021

Summer months for many Canadians is a time to relax on a Muskoka Chair, read the latest novels, enjoy food and drinks, or shoot the breeze with friends. For me, the summer of 2021 was extremely pensive as it marked the one and half year milestone of the death of my dear wife, Mary.

Yes, it was sad to ponder all the family events Mary has missed and the many more she will not be able to participate and enjoy. For example, during the last 18 months Mary didn’t see our eldest and his girlfriend buy their first home and get engaged, or meet our second child’s new (and very serious) live-in girlfriend, or our youngest’s Grade-12 graduation and 19th birthday party.

The summer lull also provided an opportunity to contemplate my own future and led me to revisit my “Live well, Stay Rich, Never Retire” philosophy. Here’s a quick recap of the philosophy:

Live Well

I define the “Live Well “component as the act of living in a deliberate manner and understanding that everything that has happened in life is/was caused by something we did or didn’t do. Hence, we alone set the course of our future.

I believe it’s essential to establish realistic goals, prioritizing the goals, and prepare a plan to achieve those goals. Yes, I know that it sounds like common sense, but it’s so easy to just “Go With The Flow” and arrive wherever life takes you. This approach is not how I envision living well.

Live well = live deliberately

Stay Rich

The “Stay Rich” component requires a clear definition of the amount of money necessary to achieve one’s financial goals (e.g., financial independence) and “why” they are important.

The sum of money and the reasons for the financial goals must be specific to each individual and shouldn’t be compared nor influenced by others (friends and media).

Yes, I know that it also sounds so easy but unfortunately, our definition of financial independence is often influenced by the money our friends have or the images that swamp our social media.

Stay Rich = attain the money required to achieve your personal financial goals.

Never Retire

The “Never Retire” component suggests we drop our obsession with retirement, instead we carry on with the activities that ignite our strongest passions and learn how to delegate everything else.

The process involves taking inventory of daily tasks and finding ways to focus solely on the activities that provide meaning, purpose and passion in life and finding others to complete tasks that we no longer have a passion about.

Never Retire = focus on the activities that provide meaning, purpose, and passion

Mulling over the future

Over the course of the summer months, I had the privilege to enjoy simple experiences with a quiet mind. This enabled me to reflect on many things including my life today as a widower and single father. How does my philosophy now compare to the life I had before, with Mary?

The answer is clear, I’ve never believed so strongly in ensuring that I create a life for myself that makes me excited to wake up in the morning. There’s a well-known quote that inspires me greatly, “When you can’t change the direction of the wind – adjust your sail – Keep reading… the significance of this quote will be reveled shortly.

My version of “Live Well”

I love my career. I love what I do and making my clients grow financially with security, confidence, and peace of mind gives me so much satisfaction. This passion does define me and I’m certain that I can’t move away from it.

These last two years have been traumatic. There’s simply no other way to describe it. Myself and my children are moving forward because we must, however it’s anything but easy.

My experience has provided me with insight on how devasting a loss of a spouse can be, and I can’t imagine what it must be like for people left alone unexpectantly without the experience of managing their finances.

“Adjust your sail” I have/we have. The Dri Financial Group is embarking on an exciting adventure that will expand our services to include the special financial needs of widows/widowers.

My version of “Stay Rich”

Next, I tackled the Stay Rich component. In this section, I defined “Rich” as having enough money to provide freedom of time. The time to deepen old friendships while creating the opportunity to meet new friends, the freedom to explore and experience new countries and scenery, the freedom to focus on my role as a father and the time to find a special woman to share my life.

Based on my calculations, I had achieved my number for financial independence and could now enjoy the benefits that come with the freedom of more personal time.

My version of “Never Retire”

Finally, I focused on the “never retire” component and what that meant to me. Since Mary’s death in January, 2020, I have read and listened to countless articles and podcasts on the subject of death and the grieving process, although I’m not an expert on the psychological side of losing a spouse/ partner, I am very knowledgeable on the financial issues affecting widows and widowers.

In the past, when I received a call from a client informing me that their spouse had just died, I was confident my experience would allow me to properly handle the situation but in hindsight, I probably failed to provide the widow or widower with the empathy needed. Instead, I quickly discussed the Will, the RRSPs, life insurance etc., all necessary discussions but failed to truly understand and empathise with them before diving into their finances. So my new “Never Retire” focuses on providing that empathetic support and financial guidance that widows and widowers need when their spouse has recently passed.

Investing time in yourself is just as important as investing money. Listen to my podcast with Bill & Kate.

We’re not good with emotions

Like most people I meet after Mary’s death, I ignored the elephant in the room and failed to acknowledge the deceased’s life nor the pain and grief the widow/er was experiencing. Our society doesn’t handle loss and grief well, so we prefer to ignore grief and hope it eventually goes away. Unfortunately, grief doesn’t go away, it only lessens in severity over time.

I believe a widow/er needs a financial planner who understands two important issues:

The emotions and thoughts that they’re going through (sadly, I understand completely).
The financial reality of moving forward on their own.

In order to provide value, a financial planner must provide advice on both the emotional and financial side of widowhood. Otherwise, the advice is often not heard nor implemented.

The new clients of The Dri Financial Group

Recently, I discovered a new passion. That I want to help people who are dealing with the loss of a spouse caused by death or a divorce. Since the “Never Retire” component suggests focusing on one’s passions and delegating everything else, it’s imperative for the Dri Financial Group to expand our expertise to include the unique needs of those experiencing a major life transition such as the loss of a spouse through a death or divorce.

For clients planning their pre or post retirement years, nothing changes. We will continue to support you with the same proprietary investment models and client services we have employed for years.

Please introduce widows/ers

Here’s where I can use your help. If a friend or family member has sadly become a widow or widower, please introduce The Dri Financial Group, a team that has the emotional and financial expertise to provide the appropriate financial and emotional advice.

Learn more:

The process of finding a financial advisor can be overwhelming. It is our job to make that process simpler and easier.

Dri Financial Group’s proprietary Wealth Navigator Process is designed with you in mind.

Its structured framework helps you make an informed decision and feel confident in our team and management practices before we get started.

If you are ready to dive deeper into your financial literacy journey, we have a wide range of free tools and educational resources available.

Subscribe to our Never Retire Newsletter
Contact us to order a complimentary e-book
Check-out our latest Wealth Navigator Podcast
Follow me on LinkedIn

source https://richarddri.ca/the-financial-challenges-of-losing-your-spouse/

Richard Dri Models

October 29, 2021 drifinancialLeave a comment

Richard Dri Canadian Dividend Model

US Dividend Growth Model

Richard Dri Earnings Momentum Model

Canadian Smart Fixed Income Model

US Smart Fixed Income Model

source https://richarddri.ca/richard-dri-models-6/

Investor Concerns Ease as Strong Corporate Earnings Lift Equity Markets

October 25, 2021 drifinancialLeave a comment

Canada’s TSX climbed to a record high on Monday as investors moved away from defensive stocks in favour of tech names.

It was much the same story in the U.S., with key tech and communications companies boosting the S&P 500 and Nasdaq. By Monday’s close, the TSX added 57 points, while the S&P 500 and Nasdaq rose 15 and 124 points, respectively. The Dow ended the day essentially flat.

Another round of strong performances from tech and financials led the TSX to a record close on Tuesday, topping the 21,000 mark for the first time. In the U.S., investor sentiment continued to strengthen, thanks in large part to a strong start to corporate earning season, despite ongoing supply-chain disruptions and inflation worries. With about 10% of S&P 500 companies reporting by Tuesday, roughly 80% had beaten profit forecasts, according to FactSet. By Tuesday’s close, all four North American equity markets had posted solid gains. Meanwhile, the loonie on Tuesday hit its highest level in more than three months against the greenback as oil prices rose and the U.S. dollar slipped.

In Canadian inflation news, the consumer price index rose 4.4% in September from a year earlier, up slightly from 4.1% in August. Rising gas prices and housing costs continue to fuel much of the surge. It was the sixth consecutive month that inflation had overshot the BoC’s target range of 1% to 3%. In Canada, the TSX climbed 101 points, lifted by industrials and resource names. Meanwhile, the Dow and S&P 500 registered minor gains, while the Nasdaq inched down 7 points.

On Thursday, the U.S. Labor Department reported that initial jobless claims for the prior week fell slightly, down 6,000 to 290,000, the lowest level since the pandemic struck in March 2020. By Thursday’s close, the TSX, Nasdaq and S&P 500 recorded modest gains, while the Dow ended flat.

source https://richarddri.ca/investor-concerns-ease-as-strong-corporate-earnings-lift-equity-markets/