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Tag: single parents

  • How to plan for retirement when you have no pension – MoneySense

    How to plan for retirement when you have no pension – MoneySense

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    Retirement

    OAS payment dates in 2024, and more to know about Old Age Security

    Here’s how Canada’s Old Age Security pension program works, who’s eligible for OAS, when you can start receiving OAS,…

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    Michael McCullough

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  • How to manage as a single parent with no pension – MoneySense

    How to manage as a single parent with no pension – MoneySense

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    “If someone’s not lucky enough to have a company pension, it’s that much more crucial for them to be building up savings on their own,” says Millie Gormely, a Certified Financial Planner at IG Wealth Management in Thunder Bay, Ont. “But that’s really hard to do when you’re supporting yourself and your kids, because you’re having to stretch that income that much further.”

    As of 2022, there were about 1.84 million single-parent families in Canada, and they face unique financial challenges. For starters, the primary caregiver may be covering more than their share of the responsibility and cost of raising their kids, footing bills for everything from food to clothing and childcare. And, thanks to inflation, we all know the cost of living has gone way up in recent years. Plus, a single parent may also be shouldering the burden of saving for their kids’ education (read about RESP planning), taking on medical expenses and more. And then there’s the fact that single parents tend to have less income to work with in the first place. According to Statistics Canada, lone-parent families with two kids report an average household income that’s only about a third of what dual-earner families of four bring in. (Not half, a third.

    All this financial strain can be a serious hurdle to retirement planning, but it doesn’t mean it’s impossible to save for your future. 

    Pinpoint your goals

    The first step is to identify your long-term goals (consulting a financial planner can help with this part). You’ll want to figure out your desired income in retirement and how much saving you’ll need to do to reach your goal. The next step is to take a hard look at your spending habits and your budget to find funds you can set aside for your retirement. 

    You may wish to review past bank and credit card statements to get a clear picture of what you’re spending on essentials (which can include rent, groceries, transportation and daycare). You’ll also want to get a clear picture of your debts like credit card balances, personal lines of credit and mortgage instalments to help you identify your fixed costs. All of this will help you figure out a budget you can live with—and what you have left over for retirement savings.

    If what’s left isn’t much, don’t despair. Even a small monthly savings will help you in the long run, says Gormely. “Contributing something rather than nothing on a regular basis is going to put you so much further ahead than if you just throw up your hands,” she says.

    Assess potential sources of retirement income

    You may have more options than you realize. A registered retirement savings plan (RRSP) is a long-term investing account that is registered with the Canadian federal government and helps you save for retirement on a tax-deferred basis. It allows for plenty of room to help your money grow. For example, your RRSP contribution limit for 2024 is equal to 18% of your 2023 earned income (or $31,560, whichever is lower). You also can tap into unused contribution room from past years.

    A tax-free savings account (TFSA) is another option. Like an RRSP, a TFSA can hold any combination of eligible investment vehicles, including stocks, bonds, cash and more, and the growth will be tax-sheltered. “In general, for someone at a lower income level, they might be better off maxing out their TFSA first, and then looking at their RRSP as a source of retirement income,” says Gormely.

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    Karen Robock

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  • Single, no pension? Here’s how to plan for retirement in Canada – MoneySense

    Single, no pension? Here’s how to plan for retirement in Canada – MoneySense

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    • Canada Pension Plan (CPP) deferral: CPP deferral is worth considering for any healthy senior in their 60s. If you live well into your 80s, you may collect more pension income than if you start CPP early, even after accounting for the time value of money and the ability to invest the earlier payments or draw down less of your investments. CPP deferral can protect against the risk of living too long, especially for a single retiree, and particularly for women, who tend to live longer than men. CPP can be deferred as late as age 70. The benefit increases by 8.4% per year after age 65, plus an annual inflation adjustment.
    • Old Age Security (OAS) deferral: Like CPP, deferring OAS can be beneficial for seniors who live well into their 80s. One exception is low-income seniors who might qualify for the Guaranteed Income Supplement (GIS) between 65 and 70. Single seniors aged 65 and older, whose income is less than about $22,000, may qualify. OAS can be deferred as late as age 70. The benefit increases by 7.2% per year after age 65, plus an annual inflation adjustment.
    • Annuities: Almost everyone wants a pension, yet almost no one is willing to buy one. You can buy an annuity from a life insurance company using non-registered or registered (ie. RRSP) savings. (What is a non-registered account? How does it work?) Based primarily on your age and resulting life expectancy, an insurer will pay you an immediate or deferred monthly amount for life—even if you live until 110. If interest rates are higher when you buy an annuity, the monthly payment amount may be slightly higher as well. If you don’t have a pension and you want the security of a monthly payment, an annuity can be worth considering. Especially if you’re in good health and are a conservative investor.

    Survivor benefits in Canada

    Most DB pension benefits are payable only to surviving spouses. Some pensions have survivor benefits for children or a guaranteed number of months of payments to an estate.

    A CPP survivor pension can be paid to the spouse or common-law partner of a deceased contributor. Single retirees are somewhat disadvantaged since their children will usually not qualify for a benefit if they die.

    Children’s benefits are only payable if a surviving child is under 18, or if they are attending full-time post-secondary education and are between 18 and 25.

    Advice, accountability and cognitive decline

    One of the challenges everyone faces as they age is making sound financial decisions. Our experience and knowledge may increase as we age but our ability to process complex decisions tends to begin declining before we retire.

    Single seniors don’t have a partner to bounce ideas off, so many may find themselves stressed about retirement and financial planning. And not everyone feels comfortable talking about money with their children and friends, and not everyone has a financial advisor, either. (Use the MoneySense Find a Qualified Advisor Tool to find an advisor near you.)

    Partners, adult children and friends can provide accountability, as well with spending and other financial decisions and keep each other in check.

    A single retiree can certainly be successful, but the challenges they face are different from that of couples.

    For these reasons, being conservative, deferring pensions, considering annuities, seeking financial advice, and proactively planning are all strategies to consider when planning for retirement as a one-person household—especially if you have no pension plan.

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    Jason Heath, CFP

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  • A single mom’s 4 kids had to fend for themselves when tragedy struck. How a chance encounter years ago saved their future | CNN

    A single mom’s 4 kids had to fend for themselves when tragedy struck. How a chance encounter years ago saved their future | CNN

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    CNN
     — 

    On a dark autumn evening almost four years ago, Janie Yoshida was driving her daughter home from high school play rehearsal when she noticed a teenager walking by himself next to a busy road.

    Tre Burrows, it turned out, was also in the play at Somerset Academy Canyons High School in Boynton Beach, Florida.

    “I pulled over to the side of the sidewalk and rolled the window down and said, ‘Hey, where do you live? I’ll take you home,’” Janie recalled.

    The 17-year-old kept insisting he was fine, until Janie put on “my mom’s voice” and demanded: ‘“Get in the car.”

    The polite young man with the gregarious smile complied. But, Janie soon learned, he led a life more challenging than she imagined – one in which she’d soon play a far bigger role.

    “He wanted me to drop him off at a main intersection. And I said, ‘Of course not. Just show me where you live.’ And he goes, ‘No, I can walk the rest of the way,’” Janie recalled.

    Reluctantly, Tre directed Janie to where he and his family were living.

    A motel.

    “I tried to play it off, like no big deal,” Janie recalled. But in reality, “I’m thinking to myself, ‘Oh my God … just terrible.’”

    From that point on, Janie gave Tre a ride every day after play rehearsal. Sometimes, she would make up an excuse to get fast food along the way, just to make sure Tre had a hot meal.

    “‘I don’t want to cook tonight,’” she’d tell him. “’Let’s just go through the drive thru.’”

    Then one day, Tre let slip another detail about his family life.

    “‘I’m gonna save this (meal),’” he told Janie, “’and split it with my sisters’” – one older and two younger, all together at the motel.

    Tre’s mother, it turned out, had been working two jobs and hanging by a thread to support her four children against immeasurable odds.

    Despite the financial challenges, Cindy Dawkins worked tirelessly to give her kids everything they needed. She had every meal ready, even without a kitchen. She helped with homework. Instead of asking her older ones to work part-time to support the family, she encouraged extracurricular activities such as track or school theater.

    Eventually, Tre told Janie why he’d been so nervous about telling anyone where he lived.

    “He didn’t want anybody to know because he was worried that the Department of Children and Families would come and take them away from his mom,” Janie said. “That’s just heartbreaking.”

    Janie asked to meet this matriarch – and was floored by her work ethic and strength.

    And as much as he loved his mom, Tre had no idea how much she sacrificed for her children.

    Soon, immense tragedy would force him to learn.

    A native of the Bahamas, Cindy moved to the US for what seemed like a promising career in the hospitality industry. But an avalanche of “bad luck on top of bad luck” fell on her, Janie said, including a layoff and a divorce.

    She ended up waitressing at two restaurants – one during the day, the other at night.

    “For the longest (time), she was working two jobs just to keep us afloat, paycheck to paycheck,” said Tre, now 21.

    “And she did all of that with a smile on her face because she didn’t want us to know exactly how hard it was to do all that.”

    But despite working two jobs, Cindy couldn’t get an apartment on her own because of a prior eviction. So she and her children moved into the motel, which cost far more per month than an apartment.

    The late Cindy Dawkins, with her daughter Zoe Clarke, moved to the US from the Bahamas.

    For three years, Cindy raised her four children in a motel room while working multiple jobs.

    Behind the omnipresent smile she put on for her kids, though, Cindy was struggling.

    She lamented that “‘in three years, I haven’t been able to make a home-cooked meal,’” Janie recalled.

    “She was like, ‘I don’t have a moment to myself or any privacy except when I’m in the shower. So if I’m going to break down, I’m going to cry, it’s going to be in the shower,’” Janie recalled.

    “‘And I’ve got to put my face back on, walk out of the bathroom in front of the kids and make sure that they don’t see it from me because I have to make them think everything’s OK.’”

    The family’s bad luck culminated the day Tre missed play rehearsal.

    The next day, Janie asked if he had been sick.

    “‘They kicked us out of the hotel because my mom couldn’t pay,’” Janie recalled him telling her.

    Janie went home and told her husband: “We need to get this family an apartment. I’m going tomorrow.”

    And as readily as she’d opened her car door to Tre that first time, “we just rented an apartment for them,” she said.

    With Janie’s name on the lease, the family of five moved into a two-bedroom apartment – mom in one bedroom, her four children sharing the other.

    Cindy meticulously paid the rent and utilities “earlier or on time – always,” Janie said.

    She got a raise at one of her restaurant jobs, Tre said, allowing her to quit her second job and spend more time with her kids.

    But that cherished time with her children would be short-lived.

    With a new home and better pay, Cindy and her kids eagerly anticipated celebrating her 50th birthday last summer.

    “We were planning on going up to Orlando a few days before and then spend her birthday up there,” Tre said.

    “We noticed that she started getting sick literally the day that we got there. As soon as we arrived, she went to bed and went to sleep and was just sleeping the entire time.”

    Cindy spent her birthday, August 1, in bed with severe Covid-19. The disease ravaged her body so quickly, “I didn’t even get to see her after she went into the hospital,” Tre said.

    On August 7, 2021 – six days after her birthday – Cindy died.

    Disbelief exacerbated her children’s agony.

    “She didn’t have any prior illnesses. … We just didn’t think anything like that would happen because we were healthy,” Tre said.

    “We were seeing the news (about) all the people passing away from Covid, but you never really understand exactly how bad it is until you experience it firsthand. We weren’t thinking this would completely uproot our lives.”

    Tre said his mother did not get vaccinated, in part due to rumors about side effects.

    “We didn’t want to do this and then (have it) potentially cause us to get sick,” Tre said. “We know better than that now. But I guess that was the reasoning behind her not getting” vaccinated.

    Tre and his siblings joined a growing group of children no one wants to be part of: the orphans of Covid. More than 212,000 US children have lost one or both parents to Covid-19, according to estimates from Imperial College London. And the number of children robbed of their parents keeps rising.

    “It never crossed my mind,” Tre said, “that me and my older sister would be the ones taking care of our little sisters.”

    Tre was the first to hear from the doctor his mother had passed. He rushed to the hospital and told his older sister, Jenny Burrows, now 25, to get there immediately.

    When Jenny arrived, “We cried for hours,” Tre recalled. “Our little sisters were at home (sleeping). Then we gathered ourselves and we tried to figure out, ‘OK, how are we going to tell our sisters?’”

    They woke up heir siblings Zoe Clarke, then 15, and Sierra Clarke, then 12. The most horrific nightmare had just turned into reality.

    The late Cindy Dawkins, with daughter Sierra Clarke, worked multiple jobs to support her children.

    But Tre and Jenny didn’t have time to mourn. Their minds were racing:

    “‘OK, are we about to get kicked out of the apartment we’re staying in because we can’t afford the bills?

    “‘How are we going to move on from this home?

    “‘How are we going to get the girls … everything they need for school?’”

    And the biggest question of all: Will the younger children get taken away?

    Despondent, overwhelmed and tasked with planning a funeral, Tre told Janie his mother passed.

    “I just lost it. I couldn’t believe it,” Janie said. “It was devastating.”

    She realized the siblings quickly needed help – and not just financially.

    They needed to learn how to parent on the fly.

    So once again, like she did all those years back from the driver’s seat, Janie went into mom mode.

    Without a living legal guardian, the children’s greatest fear was getting separated. Maybe the younger siblings would get taken away into state custody and foster care. Or maybe they would be sent to the Bahamas to live with relatives.

    Janie helped Jenny get to work on Priority No. 1: Becoming the younger girls’ legal guardian. It was one of the myriad legal complications that followed their mother’s death.

    “Another thing that’s helping us tremendously is we were able to get the girls set up with Social Security benefits from my mom,” Tre said, which will help support Sierra and Zoe until they turn 18.

    Janie and her husband also paid the remaining six months on the apartment’s lease. And she started a GoFundMe account, with an initial goal of paying for Cindy’s funeral expenses.

    Then just as Janie had stepped in as a stranger to help Tre’s hard-working but struggling family, hundreds more strangers did the same.

    The crowdsourcing fund grew so popular, it yielded enough for a down payment on a house so the children wouldn’t have to worry about getting evicted. Any extra funds likely will go toward Sierra’s and Zoe’s college education in the coming years.

    Janie also taught the older siblings about car insurance, credit and other life skills they would need to know immediately, now that they had dependents.

    Tre Burrows, left, and Jenny Burrows, right, became unexpected parents after their mom Cindy Dawkins died from Covid-19.

    The hardest part of being both a brother and a parent to younger siblings is “definitely the mental aspect of all of that,” Tre said.

    “The attitude stuff is a big thing for teenagers. They’re teenagers. Like getting chores done, getting your homework done, the attitude that comes with all that … basically, everything that goes with raising a 16- and 12-year-old,” he said.

    He and Jenny try to balance it all “while also making sure they don’t look at it like, ‘Oh, since Mom isn’t here, now you think you’re the boss and you can do all this stuff?’”

    And Tre tries to balance tough love with “not being too harsh with them, obviously, because we all just went through a horrible situation.”

    Tre and Jenny also now juggle a daily marathon of jobs, their own schooling and taking care of their sisters’ basic needs, their education and their mental health.

    Tre works at a computer repair company and has started training to become an emergency medical technician and firefighter. And Jenny, a dental assistant, wants to finish training to become a dental hygienist.

    The older siblings devised a plan for how to finish their education while paying the bills and taking care of the girls.

    “When I was going through EMT school … my sister would drop them off at school. I would pick them up, and (then) I would head to school. That was our plan,” Tre said.

    “And my sister would be the one at home with them, making sure they’re getting their homework done, making sure they’re OK mentally. And obviously I would help with that whenever I’m not in school. And basically I would get through that, get through the fire academy, doing the same thing,” he said.

    “And then once I’m done with schooling, the roles will kind of be reversed. So I’ll be the one that’s dropping them off, and I’ll be home with them (while) my sister’s at school, getting her career situated.”

    It’s a daunting task. But it’s nothing compared to what his own mother did, Tre said.

    “My biggest (concern) was just making sure I can fill her shoes,” he said. “I never really understood exactly how much she was doing until now, when my sister and I are the ones who have to do it.”

    Tre is also immensely grateful to the countless strangers who helped him and his siblings find a home and stay together.

    And it all traces to Janie giving him a ride home from school that dark autumn evening.

    “Without her,” he said, “we wouldn’t know what we would have done.”

    And Janie has learned from Cindy’s children, she said. Perhaps they inherited their mother’s fortitude.

    “I know they have the same instinct inside of them, just like their mom did – that hey, even if it sucks, let’s get up and make the best of it,” she said.

    “They’re my inspiration now.”

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