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Tag: retirement

  • Earning, saving and spending money in Canada: A guide for new immigrants – MoneySense

    Earning, saving and spending money in Canada: A guide for new immigrants – MoneySense

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    Getting started

    To get started, here’s an overview of what you need to know about moving to Canada, working in Canada and building a good credit history. 

    The more you know about Canadian money, savings and housing, the better prepared you’ll be. You can even do certain steps—such as opening a bank account—before you arrive. Learn about this and other personal finance topics, including key details about preparing to buy a home in anywhere in Canada.

    Finding a job and earning an income soon after arriving in Canada can contribute to your success. We explain who can legally work here, how to apply for a work permit, how to find credible job postings and what details to look for in a job offer. We also tell you about non-profit organizations that help immigrants find work, sign up for free English classes and more

    Moving to Canada or new to the country? These six major cities have many job opportunities in different fields—plus we look at the cost of living in each.

    From tech to health care, Canada offers plenty of jobs for newcomers—and many of them are included in national and provincial express entry immigration programs.

    Once you move to Canada, it’s important to start building a good credit history—it will have a big impact on your future here. If you plan to borrow money to buy a home or a car, for example, lenders will look at your credit report to decide if they’ll loan you money and how much interest to charge you. Employers, landlords and even cellphone companies may check your credit report. We explain how to build your credit history and how to improve your credit score.

    Some financial products in Canada are similar to what’s available in India, like fixed deposits and GICs. Check out our list.

    We’ve rounded up 15 more MoneySense articles that provide personal finance tips for different life stages—from your first steps in Canada to getting established to planning for retirement.

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  • Retirement income is highest in these US cities

    Retirement income is highest in these US cities

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    (NewsNation) — Retirees in the Washington, D.C., area have the highest retirement income in the nation, according to a new study.

    The analysis by SmartAsset found residents of Arlington, Virginia, had the highest retirement income, with an average of $90,140. Cambridge, Massachusetts ($79,563), and The Woodlands, Texas ($79,539), were second and third on the list.

    Of the 345 large cities analyzed, three of the top eight were in the Washington, D.C., area. Most of that stems from higher pensions, IRAs and other retirement accounts rather than Social Security, the report noted.

    Multiple California cities cracked the top ten, including Berkeley ($78,949), Carlsbad ($74,345) and Thousand Oaks ($73,634). Highlands Ranch, Colorado, and Naperville, Illinois, were also high on the list, with retirement incomes above $75,000.

    The city totals were calculated using U.S. Census data and include all income from retirement accounts such as pension plans, IRAs and 401(k)s as well as Social Security income. “Retirees” refers to people aged 65 or older.

    Retirement plans like 401(k)s and IRAs make up the bulk of most people’s retirement income, and a surging stock market has helped boost those balances recently.

    Last quarter, the number of retirement account millionaires rose to a record 485,000, up 15% from the quarter prior and a 43% increase from a year ago, according to new data from Fidelity.

    Individuals in that group had been in their 401(k) plans for an average of 26 years at an average contribution rate of 17%.

    However, those accounts are not the norm and make up just 2% of the roughly 24 million defined contribution plan accounts at Fidelity, Bloomberg reported.

    Instead, SmartAsset’s city analysis suggests most retirees live on much less than the typical American household.

    Across all large cities, the average retirement income was $52,723, well below the median household income of $74,580. That gap underscores the financial anxiety many are feeling today.

    “You look at your 401(k) and your savings, and to make ends meet, you start taking out $100 here and $50 there. Before you know it, it’s gone,” Shari Evans Buford, a Florida retiree, told NewsNation.

    According to a recent AARP survey, one in five Americans over age 50 have no retirement savings, and nearly two-thirds are worried they won’t have enough money to support themselves.

    A typical person now thinks they will need $1.46 million to retire comfortably, even though savers have only set aside $88,400 on average, a Northwestern Mutual survey found.

    As a general rule of thumb, Fidelity suggests having ten times your preretirement income saved by age 67 in order to maintain your current lifestyle.

    But with inflation eating away at Americans’ budgets, many retirees, upwards of 12%, have “unretired” this year.

    Shinobu Hindert, a financial educator, said other would-be retirees are taking a “soft retirement,” where they cut back on hours but continue working for the benefits.

    “They’re not completely exiting the workforce altogether, but they’re finding a part-time job that may provide extra health coverage,” Hindert said on NewsNation’s “Morning in America.”

    SmartAsset’s report suggests Social Security will be the primary source of income for many. In 14 of the cities studied, residents relied on Social Security for more than half of their retirement income, including those in Brownsville, Texas; South Bend, IN; and Spokane, WA.

    In dollar terms, retirees in Ann Arbor, Michigan, ranked highest for Social Security income at $30,428, followed by Carmel, Indiana ($30,069), and Goodyear, Arizona ($29,157).

    According to federal data, the average Social Security payment for retired workers was $1,915 per month in April. However, the size of that check varies depending on how long someone worked, what they made and when they started collecting.

    This year, an average of almost 68 million people will receive a Social Security benefit each month, and by 2035, the number of Americans aged 65 and older is set to hit 75 million.

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    Andrew Dorn

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  • Sonoma State president retires after being placed on leave for supporting anti-Israel boycott

    Sonoma State president retires after being placed on leave for supporting anti-Israel boycott

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    The president of Sonoma State University has retired from his role after being placed on leave for issuing a controversial campuswide message on the Israel-Hamas war.

    California State University chancellor Mildred Garcia said in a statement Thursday that President Ming Tung “Mike” Lee informed her of his decision to retire. Garcia placed Lee on leave for “insubordination” on Wednesday, one day after he released a message in support of a boycott against Israeli universities and said that the university would pursue “divestment strategies.” Garcia said Lee did not receive approval for the message.

    In a letter to the community, Lee apologized for the “unintended consequences of my actions” and acknowledged that his message had not been reviewed by CSU officials.

    “I want to be clear: The message was drafted and sent without the approval of, or consultation with, the Chancellor or other system leaders. The points outlined in the message were mine alone, and do not represent the views of my colleagues or the CSU,” Lee wrote.

    Amy Bentley-Smith, Cal State director of strategic communications and public affairs, said “there is no written policy” when it comes to approval from the chancellor’s office over campus leadership’s communications related to the Israel-Hamas conflict.

    “The chancellor and presidents have been in constant communication during protest activities on campuses with the intent that decisions at the university level are made in consultation with the chancellor’s office and align not only with shared university values and mission, but with applicable CSU system policies, and state and federal laws,” Bentley-Smith said.

    While the university system’s 23 campus presidents report to the chancellor, they are considered the executive officers of their respective campuses and have some autonomy over campus decisions.

    Also Friday, Rep. Kevin Kiley (R-Rocklin) sent a letter to Garcia and University of California President Michael V. Drake, calling for accountability when a campus leader appeals to “antisemitic demands of encampments.”

    “There is an urgent need for system-wide action in both the UC and CSU systems to restore order on campus, stop the adoption of [Boycott, Divestment, Sanctions] policies, and, where appropriate, appoint new campus leadership,” wrote Kiley, who previously called on Lee to resign.

    Other state lawmakers had raised concerns over Lee’s message. Sen. Bill Dodd’s (D-Napa) office reached out to the chancellor’s office Wednesday to ask if Garcia had approved the message, press secretary Paul Payne told The Times.

    Sen. Scott Wiener (D-San Francisco) also expressed opposition.

    “This is horrific and wrong,” Wiener told KRON-4 this week.

    The chancellor said she will continue to work with acting President Nathan Evans and the Board of Trustees during this “transitional period.” In a statement to the Sonoma State community, Evans said that Lee’s retirement will not overshadow Saturday’s commencement activities.

    “We will create spaces and places to process President Lee’s retirement and other recent developments as a community in the coming days and weeks. For now, I encourage all of us to focus on our graduates and their supporters,” Evans said.

    Lee worked at Sacramento State for 28 years. He came out of a brief retirement in 2022 to become Sonoma State’s president after Judy Sakaki resigned amid outcry over sexual harassment and retaliation allegations against her and her husband.

    Times staff writer Jaweed Kaleem contributed to this report.

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    Colleen Shalby

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  • A record 4.1 million Americans may retire this year: Financial planners say they should take these 5 steps

    A record 4.1 million Americans may retire this year: Financial planners say they should take these 5 steps

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    The so-called silver tsunami of retirees is beginning to crest this year, as a record-high 4.1 million Americans turn 65 in 2024. While many are part of an exodus from the workforce, not all of them will retire: Some cannot afford to stop working, and there is also a growing cohort of college-educated baby boomers who want to keep their jobs despite having the financial means to retire.

    Still, as baby boomers reach what experts are calling the “peak 65 zone,” the number of people retiring is expected to jump from around 10,000 per day over the past decade to over 11,200, according to the Alliance for Lifetime Income’s Retirement Income Institute. The surge in retirees is expected to last through 2027.

    While boomers have had decades to save, invest, and prepare for the next chapter, there are a few strategies they may have overlooked. For those nearing retirement, here are five tips from financial advisors to maximize money—and longevity—in the golden years.

    1. Consider a Roth conversion

    Most people are familiar with 401(k)s and IRAs, but there are other retirement accounts that belong in your financial plan, like a Roth IRA. Though they are usually thought to be best for younger workers due to the income cap on contributions, you can still get the benefits of a Roth even if you make too much to contribute to one outright, via a Roth conversion.

    As the name implies, the strategy involves converting your traditional IRA into a Roth IRA. When you make the conversion, you’re essentially moving funds from a pre-tax vehicle to a post-tax vehicle; you’ll pay taxes on the money now at your current rate, and then it will grow tax-free.

    The benefits are plenty, advisors say. You’ll enjoy tax-free withdrawals in retirement (assuming you meet the other requirements) and no required-minimum distributions during your lifetime. This is a good way to add tax diversification to your financial plan and reduce your lifetime tax bill.

    2. Optimize your taxable account

    Speaking of which, tax diversification can go beyond 401(k)s and IRAs. Taxable accounts also play an important role, and it’s important to know which to tap first.

    “With a 401(k) or IRA, it is all pre-tax and subject to income tax, so the federal and state government may ‘own’ around 30% to 50% of those accounts,” says Scott Bishop, a Texas-based certified financial planner (CFP). “If money is in a Roth IRA or taxable brokerage account, the results may be different.”

    A taxable account doesn’t have the tax benefits of a retirement account, but it also doesn’t have the restrictions they do. It allows you to invest for the future, but without the contribution limits, withdrawal penalties, required distributions, and so on.

    It is especially useful to have some funds in a brokerage account if you’re not sure what tax bracket you’ll be in in retirement; withdrawals from a taxable account are taxed at the capital gains rate, whereas money taken out of a 401(k) is taxed at your ordinary income tax rate (which will likely be higher). And with a taxable account, only the gains are taxed, whereas the entire withdrawal from a 401(k) is. Having an array of accounts allows you to develop a strategic withdrawal strategy.

    “Just as you diversify your investments to help tackle the uncertainty of the markets, diversifying the tax treatment of your accounts can help you weather the uncertainty of the tax landscape and manage your income in retirement,” writes Judith Ward, a CFP, for T. Rowe Price.

    And of course, you will want a chunk of money set aside in cash, in case of emergency. Wes Battle, a Maryland-based CFP, says the ideal amount is six months’ worth of expenses.

    3. Delay Social Security

    Though some people are eligible to start taking Social Security benefits as early as 62, financial advisors say it’s best to postpone doing so until age 70, or at least to when you reach the so-called full retirement age, if at all possible. That will increase the benefit amount and help you lower your taxable income, because you will have spent some of your savings from your other retirement accounts first. “This is one of the most overlooked opportunities in financial planning,” says Andy Baxley, a CFP in Illinois.

    The full retirement age depends on when you were born. For those born in 1960 or later, full retirement age is 67. For those born between 1955 through the end of 1959, it is between 66 and 2 months and 66 and 10 months. If you were born before 1955, it is 66 (and you’ve already reached it). Delaying until age 70 means you can earn a “delayed retirement” credit, which gets you a higher benefit.

    Even if 70 isn’t likely, delaying them even a few years or months can make a big difference in the size of the check you end up getting. You can view your projected benefit amount on your annual Social Security statement, which you can view on the Social Security Administration’s website.

    4. Fine-tune your budget

    Many people (and financial media) focus on reaching a magic retirement savings “number,” be it $1 million or $1.46 million or more. But the more important numbers for near-retirees to focus on are actually those in their retirement budget, says Bishop. They can be broken into the following categories:

    1. Fixed costs. That’s your mortgage or rent, insurance, property taxes, food, healthcare, and so on.
    2. Discretionary costs. That includes estimated expenses for the fun things you’ll do in retirement, including traveling, dining out, etc.
    3. Planned future costs. Fixed and discretionary costs may make up most of your budget most of the time, but you can run into trouble if you’re not anticipating other expenses, like home repair costs, new cars, long-term care, etc.

    The budget “needs to be thoughtful and conservative,” Bishop says. An advisor can help you think through contingent costs and craft one that works for your family.

    That said, your budget can always change. Sandi Weaver, a CFP in Kansas, suggests testing out a monthly withdrawal amount for around six months, and then readjusting as needed. Expenses change in retirement, and it’s okay for your plan to change too.

    “Don’t sweat the small stuff,” Weaver says. “The retirement phase is long, [potentially] 30-plus years, so if you get the finances wrong for one to two years, you can get it back on track.”

    5. Make an ‘unretirement plan’

    Finally, advisors say while getting the finances and tax strategies right is important, equally so is making the most of your days in retirement: You have a financial plan, but you’ll want a holistic life plan as well. How will you keep your mind and body healthy? Are you interested in volunteering? Would part-time work be better? Do you want to help with your grandkids? Without some forethought, it might be more difficult than you think to easily fill your time.

    One strategy is to create a so-called unretirement plan. Outlined by Mark Walton, a Peabody award-winning journalist, in his book Unretired: How Highly Effective People Live Happily Ever After, this involves thinking through what fascinates you and what you could dedicate your time to in retirement. It could be (full- or part-time) work, though it doesn’t have to be.

    “Soon-to-be retirees should keep in mind that those who are retiring to something are more successful than those that are retiring from something,” says Howard Pressman, a Virginia-based CFP. “Twenty-four hours is a long time if you’re just sitting on the porch yelling at the neighborhood kids to stay off your lawn.”

    He suggests asking yourself questions including, where will you live? How will you stay engaged? How will you stay active? How will you replace lost social connections from work?

    “The clearer this vision is, the easier the transition will be,” says Pressman. “There’s a big difference between a financially secure retirement and a happy retirement.”

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    Alicia Adamczyk

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  • RRIF withdrawal rates chart 2024 – MoneySense

    RRIF withdrawal rates chart 2024 – MoneySense

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    The minimum age at which you can convert a registered retirement savings plan (RRSP) to a registered retirement income fund (RRIF) varies by province: it’s 50 in some, and 55 in others. But starting the year after conversion, you must begin to make minimum withdrawals from your RRIF. The table below includes the minimum withdrawal rates for all RRIFs set up after 1992. It shows the percentage of the account balance (at the previous year-end) that must be paid out in the current year.

    How to use the table: Slide the columns right or left using your fingers or mouse to see even more data, including returns and strategy. You can download the data to your device in Excel, CSV and PDF formats. 

    wdt_ID Age at end of previous year Withdrawal rate for current year Age at end of previous year Withdrawal rate for current year
    1 55 2.86% 76 5.98%
    2 56 2.94% 77 6.17%
    3 57 3.03% 78 6.36%
    4 58 3.13% 79 6.58%
    5 59 3.23% 80 6.82%
    6 60 3.33% 81 7.08%
    7 61 3.45% 82 7.38%
    8 62 3.57% 83 7.71%
    9 63 3.70% 84 8.08%
    10 64 3.85% 85 8.51%
    11 65 4.00% 86 8.99%
    12 66 4.17% 87 9.55%
    13 67 4.35% 88 10.21%
    14 68 4.55% 89 10.99%
    15 69 4.76% 90 11.92%
    16 70 5.00% 91 13.06%
    17 71 5.28% 92 14.49%
    18 72 5.40% 93 16.34%
    19 73 5.53% 94 18.79%
    20 74 5.67% 95+ 20.00%
    21 75 5.82%
    Age at end of previous year Withdrawal rate for current year Age at end of previous year Withdrawal rate for current year

    table.wpDataTable td.numdata { text-align: right !important; }

    Source: Rates calculated using the CRA’s prescribed factors formulas.

    This was excerpted from RRIF and LIF withdrawal rates: Everything you need to know by Jason Heath, CFP.


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  • Should you max out your RRSP before converting it to a RRIF? – MoneySense

    Should you max out your RRSP before converting it to a RRIF? – MoneySense

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    I am guessing you have downsized your home to move to a condo and now have money to contribute more to your registered retirement savings plans (RRSPs) as a result. First, we will start with a quick rundown of how RRSP to RRIF conversion works.

    Converting an RRSP to a RRIF

    A registered retirement income fund (RRIF) is the most common withdrawal option for RRSP savings. By December 31 of the year you turn 71, you need to convert your RRSP to a RRIF or buy an annuity from an insurance company. So, the conversion must take place not by his June birthday, Chris, but by December 31, 2025. You have a little more time than you might think.

    A RRIF is like an RRSP in that you can hold cash, guaranteed investment certificates (GICs), stocks, bonds, mutual funds, and exchange traded funds (ETFs). In fact, when you convert your RRSP to a RRIF, the investments can stay the same. The primary difference is you withdraw from it rather than contributing to it. 

    Withdrawing from a RRIF

    RRIFs have minimum withdrawals starting at 5.28% the following year if you convert your account the year you turn 71. This means you have to take at least 5.28% of the December 31 account value from the previous year as a withdrawal. Those withdrawals can be monthly, quarterly or annually, as long as the minimum is withdrawn in full by year’s end. Each year, that minimum percentage rises. 

    There is no maximum withdrawal for a RRIF. Withdrawals are taxable, though. If you are 65 or older, you can split up to 50% of your withdrawal with your spouse by moving anywhere between 0% and 50% to their tax return when you file. You do this to minimize your combined income tax by trying to equalize your incomes.

    You can base your withdrawals on your spouse’s age and if they are younger, the minimum withdrawals are lower. 

    Contributions before you convert

    If you have funds available from your condo downsize, Chris, you could contribute to your husband’s RRSP. He can contribute until December 31, 2025. If you are younger than him, he can even contribute to a spousal RRSP in your name until December 31 of the year you turn 71, whereby he gets to claim the deductions, but the account belongs to you with future withdrawals made by you.

    However, just because you have money to contribute, it doesn’t mean you should. Say your husband has $10,000 of RRSP room and his taxable income from Canada Pension Plan (CPP), Old Age Security (OAS), investments, and other sources is $50,000. He could contribute and deduct that $10,000 to reduce his taxable income to $40,000. In most provinces, the tax savings would be about 20%. His tax refund would be about $2,000.

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    Jason Heath, CFP

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  • As He Exits Congress, Blumenauer Wants His Party to Embrace Pot Legalization – Cannabis Business Executive – Cannabis and Marijuana industry news

    As He Exits Congress, Blumenauer Wants His Party to Embrace Pot Legalization – Cannabis Business Executive – Cannabis and Marijuana industry news

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    As He Exits Congress, Blumenauer Wants His Party to Embrace Pot Legalization – Cannabis Business Executive – Cannabis and Marijuana industry news




























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  • “Should I delay my CPP if I’m not contributing to it?” – MoneySense

    “Should I delay my CPP if I’m not contributing to it?” – MoneySense

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    Ask MoneySense

    Do all the advice articles about waiting to take CPP at age 70 take into account the calculation of your eligible amount if you stop working and contributing at, say 60 years old, and therefore have 10 years of no contributions?

    –Gary

    An applicant can begin their Canada Pension Plan (CPP) retirement pension as early as age 60 or as late as age 70. The earlier you start your pension, the lower your payments. Deferring CPP will result in higher monthly pension payments, albeit for a shorter period of time—fewer total months of payments—over the rest of your life. 

    Retiring at 60 or earlier

    If someone retires at age 60, Gary, their CPP contributory period that began when they turned 18 could be as much as 42 years. I say “as much as” because periods of disability or when your income was low because you were the primary caregiver for your children may be eligible to drop out from the CPP calculation. 

    This contributory period is important because if you do not make the maximum contributions during this period, you will generally not receive the maximum CPP retirement pension.

    What do most people receive from CPP?

    Most people do not receive the maximum. In fact, the average monthly CPP retirement pension payment at age 65 as of January 2024 was only $831.92, well below the maximum of $1,364.60. That means the average applicant is receiving less than 61% of the maximum. 


    Compare the best RRSP rates in Canada
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    General dropout and zero-income years after 60

    There is a general dropout period from the CPP calculation of 17% of the years in your contributory period, which would be about seven years at age 60 for someone with no periods of disability or child-rearing eligibility. Let us build on this example, Gary. 

    If you are 60 and defer CPP to age 61 while not working, this may result in one more year of zero contributions and a contributory period (after the general dropout) that increases to 36 years. One divided by 36 equals about 2.78%. That could be the reduction in your CPP for deferring while having no income. 

    However, deferring CPP results in a 0.6% monthly increase in your pension, or 7.2% per year. This is regardless of your contributory period. 

    So, in our example, a year of deferring results in a 7.2% deferral increase but a 2.78% zero-income decrease. The net benefit is still a 4.42% increase in your pension plus the annual inflation adjustment. 

    A year of no income for someone with less than the maximum required contributions between 60 and 65 does have a small negative impact on the benefit of deferring, Gary. But deferring still results in a higher pension in this example. 

    Deferring CPP after 65

    If you defer CPP past age 65, you can drop up to five additional years from your contributory period for the years between 65 and 70. That means years with no earnings after age 65 will not impact your retirement pension when you defer after age 65. 

    CPP deferral after age 65 will boost your pension by 0.7% per month or 8.4% per year plus an annual inflation adjustment. Statistics show few people defer CPP after age 65. Generally, in recent years, less than 5% have waited until age 70.

    Ultimately, CPP timing should be a somewhat personal decision based on contributory history, life expectancy, investment risk tolerance and, of course, income needs. Healthy seniors, especially women (who tend to live longer than men) and those with a lower investment risk tolerance, may benefit from deferring CPP.


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    More from Jason Heath:

    The post “Should I delay my CPP if I’m not contributing to it?” appeared first on MoneySense.

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    Jason Heath, CFP

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  • Some faculty, students of Saint Rose find relief; others still search

    Some faculty, students of Saint Rose find relief; others still search

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    ALBANY, N.Y. (NEWS10) — As the final semester winds down students and faculty are working to figure out their next move, with other local colleges stepping up to help.  Friday afternoon had a big turnout at the welcoming party for the College of Saint Rose students and faculty members as they join the ranks of their new school, the Albany College of Pharmacy and Health Sciences ACPHS.  

    “I have a lot of friends that went to Saint Rose, and I know the emotion that comes along with having your school shut down. So, I’m excited to give them an open welcoming to make them feel comfortable about coming here,” said Student Ambassador, Annie Motler.  

    ACPHS is one of the latest colleges to be granted approval from the education department to provide teach out programming for biology, forensic psychology, forensic science, and psychology for St. Rose students.

    “I’m glad I made the right choice,” said transfer student Karleigh Seeloff.

    What was unique about Friday’s party was the college also welcomed eight faculty members from Saint Rose, as well. While exciting for those who were there, for many at Saint Rose, the future is not so clear. “The bitter side of that is not everyone has that opportunity and I know some folks are really struggling with that, that is very challenging,” said Dr. Lillian Rodriguez-Steen.

    The end of the semester is only weeks away, and for faculty news from the board this week stating that funding will run out by June 30 and all pay and benefits for hundreds of Saint Rose employees will end was unsettling for those with nowhere to turn. Only about 45 employees will remain on to close operations through the rest of the year.

    Senior Adjunct Professor of Music, Kelly Bird, says the closure and job loss will cause her to have to reinvent herself. But like many others at the shuttered college retirement packages and severances will not be offered.  “So, for things to turn upside down like this I have a lot of other considerations. My health and my husband’s, his health. Those sorts of things,” said Bird.

    She says she has concern for what kind of jobs there might be available. “Whether or not I feel like I could even return to a full 40 an hour a week job at this point, I’m not sure what else would be available,” said Bird.

    The College of Saint Rose may have grounds for not fulfilling the year notice outlined in their faculty manual, but Liz Richards, Chair, Department of Communications, Associate Professor of Production says it was deeply unethical for them to do so.

    And yet, some administrators, she says are the highest paid, will be retained, with bonuses, to remain to shut the school down.  She says providing salary, healthcare and bonuses to high paid administrators is a slap in the face to those of us them who are not receiving the established year’s notice of termination. 

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    James De La Fuente

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  • New York state wants companies to protect their LGBTQ+ Gen Z and millennial workers—and it’s throwing a $260 billion retirement fund at the issue

    New York state wants companies to protect their LGBTQ+ Gen Z and millennial workers—and it’s throwing a $260 billion retirement fund at the issue

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    Money talks. That’s what Thomas DiNapoli, comptroller of the state of New York, is counting on when it comes to LGBTQ+ protections in the workplace. 

    In what seem to be the first ever moves of their kind, DiNapoli’s New York State Common Retirement Fund, which manages $260 billion in assets, is pushing for more details about companies’ human capital management strategy work related to LGBTQ+ employees.

    In proxy statements published this month, $45 billion Lennar Corp. and $13.5 billion International Paper disclosed matching shareholder proposals from the retirement fund. The proposals are backed by a supporting statement explaining that demographic shifts show that 20.8% of Gen Z identifies as LGBTQ+, which is twice that of the 10.5% of millennials who identify that way. Furthermore, a third of people who identify as LGBTQ+ report experiencing harassment or discrimination in recent years and, nearly half, 45.5%, report facing discrimination at some point in their lives.

    Lennar and International Paper have recommended that investors vote against both proposals.

    Expanding focus

    The proposal is a new front in some investors’ quest to get more expansive data on diversity from companies, and similar efforts have been fruitful in obtaining more granularity on policies related to gender, race, and ethnicity. Now, investors are expanding their focus to include LGBTQ+ employees. Investors have used the more detailed reporting in recent years to hold boards and C-suite teams to account for public diversity pledges on investments, promotion among senior executive ranks and recruitment of new employees.

    Accordingly, companies should tell investors whether they have equitable employee benefits, non-discrimination policies and employee support groups, the New York fund wrote in the statement. In the proposals at both Lennar and International Paper, New York referred to the companies’ own disclosures about inclusivity in the workforce, respect for diverse backgrounds and their general statements about fostering high-performing workplace cultures via their diversity efforts. New York holds about $15.8 million in International Paper stock and $33 million in Lennar stock, according to the fund’s 2023 asset listing. 

    Both proposals quoted a 2019 report from the U.S. Chamber of Commerce Foundation, Business Success and Growth Through LGBT-Inclusive Culture. “Companies that adopt LGBT-inclusive practices tend to improve their financial standing and do better than companies that do not adopt them. Additionally, employees, regardless of their sexual orientation or gender identity, express greater job satisfaction at companies where these practices are in place.”

    Miami-headquartered homebuilder Lennar’s board wrote that the company was “built on a culture of inclusivity” and brings together the best talent to drive the success of the “Lennar family.” The board said its “Everyone’s Included” initiative represents an evolution of that focus, including an advisory council that brings together diverse cross-representation. Its code of ethics and business conduct already specifically prohibit discrimination and harassment on the basis of “color, religion, sex, sexual orientation, gender identity or expression, national origin, age, disability, veteran status, genetic information or any other legally protected status,” the board said. “Producing the proposed report is unnecessary and inefficient.”

    International Paper board members said its annual report discussed diversity and inclusion initiatives, including its long-term goals. “Among the Company’s primary Vision 2030 Goals, the Company aims to promote employee well-being by providing safe, caring, and inclusive workplaces and strengthening the resilience of its communities,” the board said (emphasis in original).

    The company also has a global diversity and inclusion council and employee networking groups. “Requiring the Company to produce an additional report limited to a subset of its overall diversity, equity and inclusion efforts would prove unduly burdensome for the Company, divert time and attention of Company management, and give rise to undue expenses, all while providing little to no additional value considering the Company’s robust diversity, equity and inclusion initiatives, culture and disclosure practices, including with respect to LGBTQ+ matters,” the IP board said.

    The proposals are an escalation from the fund’s efforts last year that involved writing letters to 55 portfolio companies that signed the Human Rights Campaign and Freedom for All American Business Statement on Anti-LGBTQ+ Legislation. The campaign prompted new discussions about workplace policies, the state said in an annual report. 

    Subscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up for free.

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    Amanda Gerut

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  • Financial hardship withdrawal exceptions and increasing income in retirement – MoneySense

    Financial hardship withdrawal exceptions and increasing income in retirement – MoneySense

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    First, remember the money in your locked-in retirement account (LIRA) or LIF is money intended to provide you with a lifetime income. Upon leaving your employer, your pension savings were converted into a LIRA, which again is intended to last you your lifetime.        

    With most LIRAs, you can start making withdrawals at age 55. That’s done by converting a LIRA to a LIF. In some ways, LIRAs and LIFs are similar to registered retirement savings plans (RRSPs) or registered retirement income funds (RRIFs). Except with a LIRA, you can’t withdraw money like you can from an RRSP. And with a LIF, you are limited to a maximum withdrawal amount, whereas with a RRIF, you can withdraw as much money as you like.

    Not all LIRAs and LIFs are the same 

    There are federally and provincially regulated LIRAs and LIFs. And, when it comes to withdrawals, exceptions and unlocking privileges, you need to check if your LIRA and/or LIF is a federal or provincial plan, as they each have their own set of rules. If you’re not sure where your LIRA and/or LIF is registered, call the financial institution holding your account.

    Once you know how your LIRA and/or LIF account is registered, go to that jurisdiction’s website to review its unlocking rules. The best thing to do is to download the unlocking application form and give it a read. Typically, it’s not that difficult to understand.

    CM, for you, go to the B.C. Financial Services Authority website and download the application. On the site, you will see you can withdraw additional monies from your LIF, over the maximum withdrawal limit, if you are facing financial hardship. You mentioned you don’t qualify, but let’s review the financial hardship exceptions, just in case.

    Financial hardship withdrawal exceptions for LIFs in B.C.

    To qualify for financial hardship for a LIF in B.C., you must meet one or more of the following criteria:

    1. Your taxable income is less than $45,667.
    2. You have mortgage arrears
    3. You are facing eviction of a rented home, and you need the funds to secure a new principal residence or first month’s rent.
    4. You have medical costs.

    Other ways to unlock your LIF in B.C.

    In most cases, a person will unlock their LIF in one of the following ways instead of applying for financial hardship.

    1. At any age, a LIRA and/or LIF with an account balance of less than 20% of the year’s maximum pensionable earnings (YMPE), $68,500, can be unlocked. In 2024, the YMPE is $68,500, and works out to $13,700.00;
    2. Once you turn 65, you can unlock your LIRA and LIF, if they contain less than 40% of the YMPE, which is $27,400 for 2024;  
    3. Permanent departure from Canada;
    4. Or, your life expectancy has been shortened.

    No matter which exception you qualify for, you must apply. The financial institution holding your investment account can provide you with the necessary forms.

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    Allan Norman, MSc, CFP, CIM

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  • ‘We are blessed’: My mother, 72, gets $11,000 a month, not including income from retirement savings. Should she get long-term care insurance?

    ‘We are blessed’: My mother, 72, gets $11,000 a month, not including income from retirement savings. Should she get long-term care insurance?

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    “She owns her home outright in the San Francisco Bay Area, which is valued at over $1 million.” – MarketWatch photo illustration/iStockphoto

    Dear MarketWatch, 

    Most Read from MarketWatch

    I, like many older millennials, am trying to help my mother navigate her retirement.

    We are blessed to be in the place we are in, but could use some recommendations. My mother is 72, single and is, overall, in great health. She loves to travel, volunteer and donate to causes she loves, like her church. She owns her home outright in the San Francisco Bay Area, which is valued at over $1 million.

    She worked for 25-plus years as a county nurse and, as such, she has a healthcare plan and a great pension, both for life. She has another $500,000 between her 401(k) and IRA, which she has yet to touch. Including Social Security, her monthly income is around $11,000, not including her retirement accounts (she will need to start taking RMDs from them soon).

    That said, she is debating what to do with her retirement accounts, and is trying to decide whether long-term eldercare insurance would be worth it, given her health and income. Her financial adviser recommended she consolidate the 401(k) and IRA and use that money to buy an annuity. But I am not certain of the terms.

    They also recommended purchasing a long-term eldercare insurance package. They say the terms of the insurance would be premiums for five years at $20,000 a year. This $100,000 would be guaranteed and “refundable” after the five years. When care is required, the policy would pay out around $4,000 a month.

    The way I see it, with her income coupled with the free healthcare, she should be well covered to pay out of pocket for any long-term care or assistance she requires. Worst case, she could either rent out her home for another $5,000 a month or sell her home and have a $1 million in cushion. As for the RMDs, she doesn’t really need the money,

    I recommended she put them into a CD ladder. She is very risk-averse, but was debating putting her 401(k) and IRA into the market with an indexed fund; again, she doesn’t really need the money. I know she wants to leave something for my brother and me, but we both have well-paying jobs, and do not need her money. We would rather she use it for herself.

    Related: I own four homes and have $800,000 in liquid assets. I’d like to retire in two years. Can I do it?

    Dear Reader,

    Your mom is very fortunate — not just because of her nest egg, home and health, but for having children who have put so much thought into her financial wellbeing. Because of her current financial situation, she has a lot of options.

    Regarding long-term care: You’re right that she could probably self-fund long-term care, as many wealthy individuals do, but that could be an expensive road. A 65-year-old today has a 70% chance of needing some sort of long-term care in their lifetime, according to the Administration for Community Living. About a fifth of people who do need long-term care will require that support for more than five years. And keep in mind, women tend to need care for longer than men.

    You mentioned she could rent her home or sell it outright to use that money, but the latter would be a drain on her assets, and the former could become a headache if she needs to return home, or to have someone manage the property while she’s away. You don’t want to go from a point where she’s well-off and comfortable to a precarious, debt-riddled state. Selling the home is often considered a last resort, even for people covered under Medicaid.

    Fortunately, you don’t necessarily need insurance to pay for long-term care, but it would be a good exercise to at least try and map out those expenses in the area, should it happen. For example, the average hourly rate for a home health aide in San Francisco is $24, whereas the monthly cost for assisted living is between $1,950 and $6,200, according to the American Association for Long-Term Care. The average cost for a private room in a nursing home is $300 a day, compared to $250 a day for a semi-private room.

    Of course, insurance products are typically more expensive the older a person gets, and she may not qualify for everything, but it never hurts to shop around when you’re creating an action plan. Look at other products to compare to the adviser’s recommendation, such as a hybrid package that combines life insurance with long-term care. A hybrid plan pays for long-term care, the amount of which depends on the terms, but if that never happens, it can pay a death benefit when the insured dies.

    Also, look into a qualified longevity annuity contract, also known as a qualified longevity annuity contract (QLAC). There are so many factors that go into picking the right one with the appropriate payout and payout date, and how much is used to fund the plan. Some QLACs will also allow a return of premium, according to Northwestern Mutual. You don’t have to go with the first (or even the second or third) product recommended to you — there are always choices.

    QLACs may help your mother’s RMD issue. The money put toward these contracts doesn’t count toward RMD withdrawals, but by coming out of the retirement accounts directly, they lower the balance that affects the ultimate distribution required. Your adviser may have been suggesting something similar to this when he or she mentioned consolidating the retirement accounts.

    Your idea to ladder CDs makes sense if she’s risk-averse. Treasuries are another possibility, as they are also low-risk. But interest rates may change your mind, as they may not be as high in the future as they are right now (and you don’t want inflation to eat away at the principal).

    She’ll have to pay taxes on those withdrawals, whether she needs the money or not. Because she’s 72 and in good health, investing it in a conservative way could make sense as it gives her another layer of diversification. There’s no way to know for sure how long a person will live, but by investing for the long-term, she can have that money work for her should she eventually need it.

    But there’s a caveat. Investing in the market only works if she is comfortable with it. She should still be able to sleep at night and be confident she won’t panic at any market movement, especially in a downturn.

    Most Read from MarketWatch

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  • NewRetirement wants to simplify financial planning for retirement | TechCrunch

    NewRetirement wants to simplify financial planning for retirement | TechCrunch

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    When entrepreneur Stephen Chen’s mom began approaching retirement age, she was forced to borrow money from Chen — and Chen’s brother — to make ends meet. They wanted to help, but the siblings also wanted to figure out a more sustainable, long-term solution that’d help their mom retire without having to worry about finances.

    Chen tried to get guidance from a financial adviser, but no one would take his mother as a client because her net worth wasn’t considered high enough. So Chen started building spreadsheets and financial models himself, doing his best to figure out how his mom could live the retirement lifestyle that she wanted.

    “People like my mom lack the tools to look at their money holistically and strategically so they can make informed decisions, monitor their financial situation, understand which levers to pull and when and make the connection between the choices they make today and the long-term ramifications to their plan,” Chen told TechCrunch. “There’s a confluence of factors that may alter the future of financial planning and advising.”

    It was after Chen helped his mom lower her expenses, figure out when to claim Social Security, decide when to downsize and take other steps to become financially independent that Chen realized lots of other older Americans were facing the same challenges.

    So Chen founded NewRetirement, a Mill Valley-based company building software to help people create financial retirement plans. Today, NewRetirement’s direct-to-consumer products power financial planning for 70,000 users managing close to $100 billion in their own financial plans, according to Chen.

    “Our models go beyond savings and investments, taking into account all of the other factors in a person’s life, from home equity, healthcare costs and taxes to Medicare and Social Security,” Chen said. “Every time a user makes a change, we run thousands of simulations in order to help them optimize their plan … We account for thousands of different scenarios, enabling users to confidently map out accumulation and decumulation projections with digital guidance.”

    NewRetirement is Chen’s second startup after Embark, an online college search and admissions tool he launched in 1995. And, like Embark, Chen sees NewRetirement as a digital solution to a transition faced by millions of Americans.

    “120 million Americans over age 50 hold 80% of the wealth in this country,” Chen said, “But running out of money remains a top 10 fear, with nearly half of Americans saying they are worried about it.”

    NewRetirement’s platform uses predictive modeling and data analytics to help users suss out the right savings approaches. Image Credits: NewRetirement

    Indeed, the majority of Americans — as many as 65%, per Charles Schwab’s Modern Wealth Survey 2023 — have no formal financial plan. And while 37% of respondents say that they work with a financial adviser, two-thirds of Americans believe that their financial planning needs improvement, according to Northwestern Mutual’s Planning and Progress Study 2023.

    NewRetirement, which began as a consumer offering and in 2021 expanded to the enterprise, charges $120 per year for access to a suite of tools, calculators, recommendations and scenario comparisons and ~$1,500 per year for check-ins with a certified financial planner. In addition, NewRetirement sells a subscription-based private label version of its tools aimed at financial advisers.

    Now, you might wonder, what makes NewRetirement different from startups like Retirable, which similarly provides an array of retirement planning tools and access to asset managers? Chen asserts that NewRetirement is one of the few — and perhaps only — financial planning platform that serves consumers as well as advisers and workplaces.

    “Our core innovation is allowing anyone to create a plan with industrial-strength tools, enabling advisers to collaborate with the end user and making this available at scale through enterprise partners who bring it to their customers,” Chen said. “As more financial services companies see their offerings like investment management become commoditized, there’s huge value in helping clients and prospects think about their money holistically. By offering self-directed digital planning to clients versus starting with a human adviser, they can scale and serve any number of users, learn about them, help them make good decisions and position their products and services more effectively.”

    Chen says that about 70% of NewRetirement’s revenue is enterprise presently, with the remaining 30% coming from consumer customers. The platform has 20,000 individual subscribers and “several” wealth management clients as well as “multiple” enterprise customers including Nationwide, which recently expanded an existing partnership with NewRetirement.

    That momentum no doubt helped NewRetirement to cinch its Series A funding round this month.

    The company raised $20 million in a tranche that brings its total raised to $20.8 million, led by Allegis Capital with participation from Nationwide Ventures, Northwestern Mutual Future Ventures, Plug and Play Ventures, Motley Fool Ventures and others. Chen says that the cash infusion will be used to expand 50-employee NewRetirement’s enterprise products, scale up onboarding, accelerate R&D efforts and build capacity to meet future demand.

    “With this new capital, we will have three to four years of runway,” Chen said. “That gives us time to continue to scale our enterprise partnerships and enhance our product. What’s more, the current downturn is enabling us to bring in incredible talent. We have a strong team in place and will expand headcount further this year.”

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    Kyle Wiggers

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  • Do You Need Credit Even After You Retire? | Entrepreneur

    Do You Need Credit Even After You Retire? | Entrepreneur

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    After decades of work, you may be ready to put your credit profile to rest. Who needs credit after they retire?

    You do—you need credit even after you retire. There are multiple reasons, and we will discuss them right here.

    Why Credit is Important, Ever

    For starters, let us go back a couple of years (not much more than that, right?) to your teenage years. Ideally, you were just starting to build credit upon your 18th birthday.

    Back then, you built your credit in anticipation of applying for credit cards, buying a home, leasing a car, taking out loans, etc. Without a good credit score and excellent credit history, you would not be able to achieve all of that.

    Hopefully, you kept at it to build and maintain a great credit score.

    If you are approaching retirement or have already reached it, you may think you can let go of your credit. You made it up until now and no longer need to maintain good credit.

    That thought is false. Here is why you do need good credit even after you retire.

    1. To Help your Offspring Buy a Home

    Parents want nothing more than to be able to provide for their children. A healthy dynamic between parent and child is strong in affection, emotional support, and trust.

    Financial support is also very prevalent, especially when the kids are young.

    As children grow older and become independent individuals, financial support may lessen or cease.

    Not all parents have the financial means to support their children forever, but that does not mean they don’t continue caring and worrying for them.

    Can you relate to wanting to be there for your adult child but feeling strapped by your limited budget?

    If your children want to buy a house, you can do something huge for them without opening your wallet. That is to cosign their loan. And to cosign their loan, you must have good credit.

    Cosign a Loan

    Many potential home buyers cannot close on their loans because their income falls short. In that case, they can bring in a co-signer to sign on their loan and supplement their income to get approved for a mortgage.

    Co-signing a loan is a great act of kindness, especially when you do it for a loved one.

    All the co-signer needs to qualify is income plus a good credit profile.

    So you got it right there. The first reason you may need credit after you retire is if you ever want to co-sign on your child’s loan.

    Once we are on the topic of co-signing, we need to touch upon the risks of cosigning.

    Technically, a co-signer should not have to lay out any money. The co-signer is there to assure the lender that in case the primary borrower fails to make payments on the loan, the cosigner will step forward and make payments. However, since you may be limited financially, you don’t want to get to the point of having to step in to make payments instead of the primary borrower.

    Here is how to avoid that and other risks of cosigning.

    How to Co-sign Responsibly

    Affordability

    The first risk is the primary borrower not making payments on their loan.

    Before you co-sign, sit down with the primary borrower, who may be your own children, and check their finances.

    Check if they have a plan for paying their mortgage. Do they seem able to afford the loan? Do they have extra finances in case an emergency crops up?

    It may seem like you are letting them into your personal affairs, but once you co-sign, you are legally just as responsible for the loan. Don’t go into this blindly to keep peace in the family. Instead, be cautious so you don’t find yourself in hot water with your children later when they fail to pay their mortgage.

    The banks all check finances before they approve a loan. You are entitled to do so as well.

    Ask for Loan Statements

    Take it one step further. Usually, only the primary borrower receives their mortgage statements.

    When you co-sign a loan, request from the bank to receive monthly statements. This will allow you to hover like a hawk over the account to make sure they are making timely payments.

    Request Escrow

    Ask the primary borrower to give you three months’ mortgage payments. If they ever miss a payment, use this money as escrow to make it yourself. If you have escrow, you don’t have to shell out your money.

    Get a Refinance Commitment

    Lastly, you need to cosign their loan because the primary borrower is not eligible for a mortgage.

    However, they may become eligible over time due to increased income, more intelligent savings, etc.

    Get a commitment from the primary borrower that as soon as they become eligible for their mortgage, they will refinance the loan and remove you from being a co-signer.

    Yes, co-signing on your child’s loan is nice, but it must not be forever.

    As soon as they can get you off, they should.

    2. To Downsize your Home

    Enough talk about helping your child own their home. Now, let’s focus on the house you live in.

    As the years pass and you slowly ship your kids out of your home and into their humble abode, you may feel very humble. Humbled by your huge living property occupied by only you and your spouse.

    The desire to downsize homes stems from needs that are now obsolete.

    Space? Previously occupied bedrooms are now empty. At least empty of human beings because your children may have upped and left, but assuming they are like many others, their STUFF is still there. The stuff they did not take along with them but would pass out if you dared throw any of it out.

    In any case, you no longer need so many rooms. (In the worst case, remove most of their STUFF to clear up more space. Rest assured, they will never know).

    Steps? Gone are the days when your legs swiftly carried you up those steps to the second floor of your home and had you prancing back down. New aches and pains may have you seeing red at the sight of those steps.

    You can easily make do without the upstairs floor.

    Location? When your children were going to school, clubs, friends’ houses, and whatnot, you wanted to be situated in the location with the shortest carpool route.

    Now that your children are busy carpooling their own brood, you might be more than ready to move out of the bustling area to quieter pastures.

    We’ve established enough chances that you may move out of your current home and into a smaller dwelling.

    Buying a house

    Once you move out, you may decide to buy a new house. If you sold your prior home, you can buy a smaller apartment to retire in.

    That requires taking out a mortgage. The bank must approve you for a mortgage, and good credit is crucial. They will not approve you without a decent credit score.

    Furthermore, strong credit can help you obtain a lower interest rate on your mortgage. The higher your credit score, the better your interest rate will be. Fico estimates that you can get a 1.5% lower interest rate with an average 800 score than a 680 score.

    In that case, good credit is very important even after you retire. Without it, no lender will approve you for a mortgage. And even if they do, your interest rates will likely be higher than they could have been.

    Renting

    Have you lived in a rental all these years? Do you want to give up your current home for a smaller rental? If you are interested in a new rental contract, you must have good credit, just like you would with a mortgage.

    Potential landlords often request to see your credit report. It is their way of being cautious before accepting you as a new tenant. Landlords review your credit report for bankruptcies, charged-off accounts, and any red flags that may indicate financial issues. The landlord can easily deny your tenancy if any of those marks are present. And if they don’t deny you and are ready to accept you as a tenant, they may still ask you for a larger deposit or demand a cosigner to protect themselves from possible shortcomings in your rent payments.

    A delinquent credit report is not a good indicator of a responsible tenant.

    But if you can show a beautiful credit report clean of delinquencies, you come across as a responsible person. A landlord would be happy to take you in as a tenant. After all, you present yourself as the person who makes timely payments.

    That brings us to this conclusion: If you do not want to stay stuck forever in the home you purchased or rented way back then, make sure you have good credit. When it comes time to downsize, you will have all your options open.

    3. To Apply for Home Utilities

    Let us move on to another explanation for credit after retirement.

    Whether you buy a new house, move into a new apartment rental, or stay where you are, it makes no difference. Electricity, plumbing, water, and gas will always remain necessities.

    Your blood pressure may rise when the bills from the utility companies arrive in the mail, but you can’t live without ‘em.

    So, where do utilities come into the picture now?

    As we mentioned earlier, if you downsize and move into another house, you will need to set up utilities for your new place.

    How else would you have water to boil for your coffee the morning after the move? And to be able to use your kettle or coffee machine, you need electricity. And electricity to keep your appliances humming, gas to keep things going, internet if you want, and a Tylenol to stop your head from spinning.

    Once you get your bearings, you must apply for home utilities with each home utility provider. The clincher is that the utility providers will check your credit report before they agree to take you on as a customer.

    The idea is that the provider is lending you electricity one month at a time. They want to assure that you are a trustworthy borrower and will pay what you owe them when the last day of the month hits. The provider may get that assurance if they find you have a good credit history with track record payments. Why else would they want to lend you electricity for a month?

    They wouldn’t. So, to have your name honored at the top of a utility bill, you will need to have good credit!

    4. To Apply for New Credit Cards

    Those who know, know.

    There is a thrill and exhilaration when you know how to manage your credit cards perfectly.

    Firstly, you know precisely which of your cards to use for every swipe you make. Secondly, you know how and where to transfer your rewards for maximum cashback. You also have an exact timeline of when your annual fees are due, when a benefit needs re-enrollment, and when a credit is about to expire.

    Keeping track of credit cards is a game of strategy for the savvy.

    Now, here is what I am getting to. Perhaps you are playing the game of managing your credit cards perfectly. If that is the case, I can easily assume you will still apply for more credit cards after retirement. After all, one who knows how to keep track of their credit cards can handle many, many cards. And strategizing credit cards is just too satisfying to give up so quickly.

    This brings us to a couple of situations in which you might just decide to apply for a new credit card.

    Cash in on Rewards at the Drugstore

    As you advance to older age, you might find yourself more often than not at the drugstore. To fill a prescription, to find another super vitamin, or to refill your stash of reading glasses. There are plenty of credit cards that earn great rewards on drugstore purchases. It is worth your while to get one to maximize the rewards on the money you spend at drugstores.

    Get a New Welcome Offer

    Banks never cease to offer exciting welcome offers on credit cards, which often entice consumers to get the card. You might apply for the card if you come across a welcome offer you desire.

    Fly with Airline Points

    Perhaps now more than ever, you can find the time to travel. You’re home, have no job to run to, and life is calm.

    Thankfully, there is a wide range of airline credit cards. Whether you ever flew or not, there may be an airline card you could never use that would complement your trip amazingly now.

    Hence, a new credit card.

    Consequently, everyone knows that a bank must consider your application if you have good credit. Some credit cards even require excellent credit.

    Be wise and keep your credit in good standing so you can apply for a credit card whenever you like.

    5. To get an Auto Lease

    Let’s hit the road. Another reason you may need credit after retirement is for an auto lease.

    Even if you already own a car, you may decide to get a new lease, either for a new car or in addition to your current one. Or, you may want to upgrade your current vehicle.

    Whatever the reason, when you apply for a new auto lease, the bank will pull your credit. You will only get approved if they find your credit in good standing.

    Moreover, if you want to get the best lease rate, you need a score of approximately 720.

    6. To get Auto Insurance

    Once we are on cars, let us mention auto insurance.

    If you drive a four-wheeled vehicle, you want auto insurance. Though I never wish it upon you, if you, G-d forbid, are ever involved in a car accident, auto insurance will help cover the mess.

    Auto insurance companies will check your credit before they approve you for insurance. The company will trust someone who comes across as responsible through their credit report as someone who will drive a car responsibly.

    It is a bit of a far-fetched connection, but if the insurance companies are looking for clean credit, you should present clean credit.

    How to Maintain Your Credit

    Finally, we set the facts straight. Credit is essential even after you retire.

    But how do you maintain your credit after you retire? Do you close most of your credit cards to avoid messing up any of them? First of all, no, that is not the way to go.

    Here are some tips to guide you in maintaining your credit.

    Keep Two Cards Open

    There is no reason to close all your credit cards. That would simply squash your credit history and plunge your credit down under.

    On the contrary, you should keep at least two credit cards open. This will safeguard your credit history that you have built up with those cards.

    However, this brings us to our second tip: to make sure you use those cards responsibly.

    Don’t Max Out your Cards

    When using your credit cards, be very careful not to max out your cards so as not to elevate credit utilization.

    Credit utilization is the percent of each card’s credit limit used. High credit utilization is bad for your credit. Therefore, keep your card balances low rather than high.

    Make On-Time Payments

    Of course, when it comes time to pay your bill, be extra vigilant to make on-time payments. Late payments are a no-no for good credit.

    Pay your credit card bill after the statement prints but before the due date.

    Conclusion

    You may have started reading this post, and you were sure it would say that you are right and do not need credit after you retire. After all, why did you work all of your life? Was it not to sit and relax after retirement? Things may change, but this is the best advice concerning your good credit. Always check out the newest information, especially relating to credit and taxes.

    Yes, but no. You can retire, take it easy, and let go. But if you ever want to get a new car, house, or credit card, you will need good credit to get approved.

    Hopefully, you have kept up your credit for decades now. If so, keeping your credit in good shape should not be too difficult. It is well worth the effort so that you are not stuck in place when you want to add another cherry to your life. Be it in the form of a lovely little house or a fancy, compact car.

    Featured Image Credit: Photo by Anna Shvets; Pexels

    The post Do You Need Credit Even After You Retire? appeared first on Due.

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    Chaim Geller

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  • How to cope with the RRSP-to-RRIF deadline in your early 70s – MoneySense

    How to cope with the RRSP-to-RRIF deadline in your early 70s – MoneySense

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    Unless taxpayers make a request, there are no withholding taxes on the minimum RRIF withdrawal. This can result in the Canada Revenue Agency (CRA) requesting quarterly tax installments in the future: after filing a tax return where net taxes owing (taxes owing less the taxes deducted at source) exceed $3,000. 

    If this looks to be an annual event, it’s wise to pay the tax installments, as the CRA will charge installment interest on the amounts outstanding or paid late, Ardrey says. “That rate of interest is currently at 10%.” 

    (Of course, if you overpay installments, the CRA will not pay you any interest.)

    Withholding taxes is another consideration. These are not the same as your final tax bill (after you die), Birenbaum says, but instead are “a default percentage the government takes upfront to ensure they get (at least some) tax on RRSP or RRIF withdrawals.” If you’re in your 60s and have ever taken money from your RRSP, you know you pay 10% withholding tax for withdrawals of $5,000 or less, 20% between $5,001 and $15,000, and 30% over $15,000. Amounts are higher in Quebec.

    But the rules are different for RRIFs; there are no withholding taxes required on minimum withdrawals. Outside Quebec, withholding taxes are the same for RRSPs, says Birenbaum. For systematic withdrawals, withholding taxes are based not on each individual payment but on the total sum requested in the year that exceeds the minimum mandated withdrawal. 

    You don’t necessarily want to pay the least in withholding taxes, as many may know from making RRSP withdrawals in their 60s. You can always request paying a higher upfront withholding tax on RRIF withdrawals, if you expect to owe more at tax-filing time due to other pension and investment income. You can also set aside some RRIF proceeds in a savings account dedicated to future tax liabilities. 

    Do RRIFs trigger OAS clawbacks?

    Another complication of extra RRIF income is that it can trigger clawbacks of Old Age Security (OAS) benefits. If your total income exceeds $90,997, OAS payments will be clawed back by $0.15 for every dollar over this amount until they reach zero.  

    Income splitting with a RRIF

    Fortunately, there are ways to minimize these tax consequences. If you are one half of a couple, you can benefit from a form of pension income splitting: RRIF income can be split with a spouse on a tax return when appropriate, providing the taxpayer is over 65. An income split of $2,000 can provide a pension tax credit for the spouse, which could be the difference between being impacted by the OAS clawback or not.

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    Jonathan Chevreau

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  • “Where do we pay income tax if we retire abroad?” – MoneySense

    “Where do we pay income tax if we retire abroad?” – MoneySense

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    In the case of Mexico, Marianna, a taxpayer is considered a resident of Mexico if they have a permanent home available to them in Mexico. If they have homes in both Mexico and Canada, the location of their centre of vital interests—their personal and economic ties—must be considered. This is a condition of the Canada–Mexico Income Tax Convention, a tax treaty that is like many others that Canada has entered into with other countries to establish tax rules between them. 

    The courts typically refer to the residence article of the OECD Model Tax Convention when defining the centre of vital interests:

    “If the individual has a permanent home in both Contracting States, it is necessary to look at the facts in order to ascertain with which of the two States his personal and economic relations are closer. Thus, regard will be had to his family and social relations, his occupations, his political, cultural, or other activities, his place of business, the place from which he administers his property, etc. The circumstances must be examined as a whole, but it is nevertheless obvious that considerations based on the personal acts of the individual must receive special attention. If a person who has a home in one State sets up a second in the other State while retaining the first, the fact that he retains the first in the environment where he has always lived, where he has worked, and where he has his family and possessions, can, together with other elements, go to demonstrate that he has retained his centre of vital interests in the first State.”

    If you sell your home in Canada or rent it out to a tenant, and establish closer ties to Mexico, you will likely become a non-resident of Canada. There may be tax implications for assets you own when you leave or are deemed to depart from Canada, Marianna. Assets like non-registered investments will be subject to a deemed disposition (a notional sale) and this may trigger capital gains tax if the assets have appreciated in value. Other assets, like pensions and investments, will be subject to withholding tax on income after you leave. 

    You ask specifically about monthly pensions, Marianna. Registered pension plan (RPP) periodic payments like a monthly defined benefit (DB) pension are subject to 15% Canadian withholding tax for a Mexican resident. The same 15% rate applies to Canada Pension Plan (CPP), Old Age Security (OAS) and registered retirement savings plan (RRSP) or registered retirement income fund (RRIF) periodic payments. A lump sum withdrawal from an RRSP or RRIF is subject to a higher 25% withholding tax. 

    Tax on non-registered investments is limited to dividends or trust (mutual fund or exchange-traded fund) distributions. The withholding tax rate is 15%. Most Canadian interest earned by a Mexican resident is not subject to withholding tax in Canada.

    Capital gains on non-registered investments earned by a non-resident are not subject to Canadian withholding tax either. 

    If your Canadian income is relatively low, you may benefit from electing under section 217 of the Income Tax Act to file a Canadian tax return voluntarily. The tax would be calculated on your qualifying Canadian income. Qualifying income includes CPP, OAS, pensions, RRSP/RRIF withdrawals, and a few other sources of Canadian income. If you owe less tax than the initial 15% or 25% tax withheld, you can get a refund. 

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    Jason Heath, CFP

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  • Flirting With 50? You Should Have This Much in Your 401(k)

    Flirting With 50? You Should Have This Much in Your 401(k)

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    How Much Should I Have in My 401(k) at 50?

    Most Americans have less in their retirement accounts than they’d like, and much less than the rules say they should have. So, obviously, if that describes you then you’re not alone. Now, most financial advisors recommend that you have between five and six times your annual income in a 401(k) account or other retirement savings account by age 50. With continued growth over the rest of your working career, this amount should generally let you have enough in savings to retire comfortably by age 65.

    Consider working with a financial advisor as you flesh out your retirement plan.

    What Your Retirement Savings Should Look Like by Age 50

    Financial experts sometimes suggest planning for your retirement income to be about 80% of your pre-retirement income. So, for example, someone who earned $100,000 per year going into retirement would plan on having about $80,000 per year while retired. The reason for this discrepancy is that most households tend to have fewer needs and responsibilities while in retirement, and therefore fewer expenses. The only major exception to this rule is when it comes to healthcare. You should expect those costs to rise in your later years.

    To make your savings last, financial experts recommend that you plan on withdrawing about 4% per year from your retirement fund. This will depend on three main factors:

    • How much money you have in your retirement fund

    • The average rate of return that your retirement fund generates

    • Your anticipated Social Security income

    So, for example, say you plan on needing $80,000 per year in retirement.

    If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

    First, you should look up how much money you can expect each month from Social Security. This income will depend on how much you made during your working life, as well as when you choose to retire. If you are an average Social Security recipient it will come to approximately $1,650 a month, or $19,800 a year. So you should plan on withdrawing an additional $60,200 per year to make up the difference.

    Applying the 4% rule of thumb, $60,200/0.04, suggests that this household will want about $1.5 million in their retirement fund. Other, more conservative, recommendations suggest making these plans without accounting for Social Security. In that case, you would want about $2 million in your retirement fund.

    Don’t miss out on news that could impact your finances. Get news and tips to make smarter financial decisions with SmartAsset’s semi-weekly email. It’s 100% free and you can unsubscribe at any time. Sign up today.

    The 4% rule may entail withdrawing too much. It comes from, in part, conservative estimates of your retirement fund’s returns. By the time you retire you should have shifted your portfolio to safe assets. Many retirement funds, with comparatively safe assets, will have a return rate of around 3% to 5% by this point, allowing you to hover right around the replacement rate for your withdrawals.

    So someone who earns $100,000 per year will want to have around $1.5 million in their retirement fund by age 65. At age 50, then, many experts suggest that this retiree would need to have – at a bare minimum – around $600,000 up in a 401(k), or other tax-advantaged account. That would give the retiree 15 years to boost their retirement nest egg by an additional $900,000, or grow by an average of $60,000 annually for each of the next 15 years. That is unlikely to happen without significant capital appreciation in the retiree’s tax-advantaged account. Many advisors recommend seeking a rate of return around 7% to 8% to reach the needed $1.5 million.

    Reaching the Retirement Finish Line

    How Much Should I Have in My 401(k) at 50?How Much Should I Have in My 401(k) at 50?

    How Much Should I Have in My 401(k) at 50?

    Besides making sure that the asset allocation of your retirement fund is sufficiently aggressive, there are at least four other steps you can take to get from $600,000 at 50 to $1.5 million at 65.

    Max Out Your Catch-Up Contributions

    This is the most important thing you can do. The IRS limits how much you can contribute to 401(k), individual retirement account (IRA) and Roth IRA in a single year. After you turn 50 it raises the cap, allowing you to make what are called “catch up contributions.” In 2022, for example, most workers can only contribute up to $20,500 to their 401(k) account. However, anyone age 50 or older can contribute up to $27,000. That extra $6,500 is significant, and between age 50 and age 65 it has time to add up to something very real. Take advantage of it.

    Open Simultaneous Retirement Funds

    The IRS allows you to contribute to a 401(k), an IRA and a Roth IRA in the same year. However, there is overlap between the contribution limits for an IRA and a Roth IRA.

    If you are already maximizing your contribution limits to your 401(k) but are still concerned that it isn’t enough, consider opening an IRA or a Roth IRA to supplement your savings. Doing so will allow you to put money into multiple retirement accounts at the same time, helping you to boost your savings considerably.

    If you already have simultaneous retirement accounts, consider simply opening an earmarked account. Even though it won’t see the same tax advantages, there’s no reason that you can’t save for retirement with an ordinary investment portfolio. You can put as much money into it as you like then just plan on leaving it there for retirement.

    Manage Debt, Manage Spending

    An excellent way to free up some cash is to stop making interest payments on debt. If you have existing debt, paying it off more quickly will reduce the amount that you spend on interest and fees. This will, in turn, give you more cash to dedicate toward your retirement account.

    When it comes to long-term debt, like a mortgage, paying it off more aggressively can also reduce your potential expenses in retirement. You won’t have to make those payments, which can reduce the amount of money you’ll need each month once you’ve stopped working.

    At the same time, consider your overall lifestyle. If you think you may not have enough for your retirement, are there ways that you can shift your lifestyle over the long run that will reduce expenses? Is there someplace less expensive you could live, for example? This isn’t as simple as skipping your morning latte. Instead, consider whether you can shift your monthly needs in a way that might significantly change your budget both today and in retirement.

    Consider Working More and Retiring Later

    If you don’t have enough money to fund additional retirement accounts, consider taking on additional work to earn that money. This can range from freelance or gig work to a formal part-time job.

    This is not a recommendation we make lightly. By the time you’re in your 50s, the last thing most people will want to do is “hustle.” However, secondary work is a good way to boost your finances, and if you need the money for retirement then it has to come from somewhere. More importantly, while it would be unpleasant to need a second job at 55, it would be far worse to need a job at 75. Working today might help ensure that you don’t have to do so tomorrow.

    The jump in Social Security payments from normal retirement age to 70 is significant. If you were born between 1943 and 1954, If you start receiving benefits at age 66 you get 100% of your monthly benefit. Should you start receiving retirement benefits at age 67, you’ll get 108% of the monthly benefit because you delayed getting benefits for 12 months. If you start receiving retirement benefits at age 70, you’ll get 132% of the monthly benefit because you delayed getting benefits for 48 months.

    Bottom Line

    How Much Should I Have in My 401(k) at 50?How Much Should I Have in My 401(k) at 50?

    How Much Should I Have in My 401(k) at 50?

    Most financial experts suggest that retirees should have around five to six times their annual income saved up in their retirement account by age 50. If you haven’t hit that mark, it’s probably a good time to maximize catchup contributions and consider opening one or more additional retirement accounts. In addition, make sure your investments are poised for capital appreciation, which of course entails more risk, and cut your discretionary spending.

    Tips on Retirement Planning

    • We can all use help with our finances, and never more so than when it’s time to save for retirement. That’s where a financial advisor can offer valuable guidance and insight.

      Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

    • Use SmartAsset’s 401(k) calculator to get a quick estimate of how much you’ll have in your 401(k) by the time you retire.

    Photo credit: ©iStock.com/Andranik Hakobyan, ©iStock.com/AndreyPopov, ©iStock.com/DNY59

    The post How Much Should I Have in My 401(k) at 50? appeared first on SmartAsset Blog.

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  • Williams-Sonoma, Inc. (WSM) Stock Forecasts

    Williams-Sonoma, Inc. (WSM) Stock Forecasts

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    Analyst Report: Williams-Sonoma, Inc.

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