Are you ready to retire? + MORE Mar 5th

(Illustration by The Project Twins)
If you’re single, you know that retirement planning is tougher for you than it is for couples. You have no one to rely on but yourself, and you can’t share expenses or split income. As a result, you can’t just take the cost of retirement for couples and divide it by two. Situations vary, but a single person will need to spend roughly 70% as much as a couple to enjoy an equivalent lifestyle in retirement.
The cost of singlehood
To help make things easier, in this issue I’ll review what it costs for singles to fund their retirement and discuss the special challenges they face. I’ll describe the experiences of three retired singles—one with a modest middle-class budget and two with more affluent means. While their budgets vary, all three have achieved a comfortable lifestyle that meets their aspirations.
First, let’s look at the cost of a middle-class retirement lifestyle. In my view, a single retiree should count on spending about $30,000 to $50,000 a year including taxes, assuming you own your home and have no debt…

TORONTO — A survey from the Bank of Montreal suggests fewer Canadians were contributing to their RRSP this year, but that contributions were higher than recent years.

The survey, conducted in the final week before the March 2 deadline, found 57 per cent of Canadians had made an RRSP contribution for the 2014 tax year.

That was down from 65 per cent for the 2013 tax year and 62 per cent the year before that. But the average contribution, at $3,737, was up about $200 from the two previous years.

According to the survey, of those who planned on receiving a tax refund after making an RRSP contribution, 34 per cent planned on saving or investing the money.

Of the others, 15 per cent said they would pay down their mortgage, 13 per cent planned to use the money for home renovations and 11 per cent planned on using their refund for travel or to purchase leisure items.

The survey was conducted Feb. 24-25 by Pollara with an online sample of 1,002 Canadians 18 years of age and over. The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population…

David and Doreen Barton of Winnipeg (Photograph by Rejean Brandt)
THE PROBLEM

David Barton, a 68-year-old real estate agent, plans to join his wife Doreen, 62, in retirement by 2016. Decades of toil has netted the Winnipeg couple a large, six-figure nest egg, 60% of which is safeguarded in annuities and cash. The remaining 40% of their portfolio is mainly comprised of Canadian dividend-paying stocks—many of them oil and gas—as well as a couple of mutual funds. However, now the Bartons are concerned they’re not properly diversified. “We’ve set aside an additional $75,000 to cover expenses for three years if the market goes south,” says David. “But I’d like more U.S. holdings—maybe in ETFs.”

Senior investment adviser Allan Small, of the Allan Small Financial Group with HollisWealth, agrees the Bartons need a more balanced approach. He wants the couple to keep their sizable annuities and $75,000 emergency fund, and use the remaining cash to increase the equity exposure of their portfolio to 55%…

(Betsie Van Der Meer/Getty Images)
Q: I am a 57-year-old widowed medical secretary earning $43,000 annually plus survivor pension of $560 monthly. I do not have a mortgage or car payments or any other debt. My children are grown and on their own. I have approximately $500,000 in RRSP and non-registered. My home is valued at approximately $700,000. My question is could I possibly be able to retire comfortably at 60 years of age?—Kathy
A: You and a lot of other people wonder if they are ready to retire, Kathy. Some know they can’t and they definitely aren’t there. Others are on the cusp. Yet others definitely can, but don’t realize it.
Whether you are able to retire comfortably kind of depends. Here are some of the questions you should be asking yourself:
1. How much money do I spend each month?
2. Will I spend more or less in retirement?
3. What are some of the sporadic expenses I need to budget for beyond my day to day costs?
4. What rate of return should I expect on my investments?
5…

(Getty Images)
One of Canada’s better-known retirement experts, Malcolm Hamilton, doesn’t think limits need to be doubled on Tax-Free Savings Accounts but his reason for saying so is not the fiscal consequences for Ottawa. “I just think that a larger TFSA will ultimately threaten RRSPs and that the existing TFSA is sufficiently large for most Canadians.”
In an email exchange, Hamilton said he worries about the “apparently coincidental release of two reports highly critical of the TFSA in an election year.” Given its close affiliation with the NDP party, the critique of TFSAs is to be expected from the Broadbent Institute, he said. But the other report, from the Parliamentary Budget Officer (PBO) is more of a concern, since “it may signal that the federal government is backing away from the TFSA.”
As MoneySense reported last week, the Broadbent Institute report (entitled Double Trouble) authored by Jonathan Rhys Kesselman found that by the time the existing TFSA framework matures in 40 or 50 years, it will cost Ottawa as much as $15…