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How to retire ■Top 10 tips to retiring rich ■Wealth preservation When to retire ■Selling a business ■Succession

planning Why to retire ■Mindfullness retreats ■New age in retirement residences


THE ULTIMATE RETIREMENT GUIDE MAGAZINE FOR BRITISH COLUMBIANS ■ Retiring on your terms ■ Surviving a volatile portfolio

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■ Downsizing: stay or go? ■ Bequeathing to charity

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pinkowski.ca ‡ 604.659.8047 Raymond James Ltd. is a member of Canadian Investor Protection Fund

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FEATURES Living longer in a lucky time



Rethinking retirement homes


Mindfulness retreats




Centenarians are now the fasting-growing age group in Canada, and many are sharing the benefits of the society they helped to build



Transformational coast and mountain retreats offer direction in navigating and accepting life’s changes through mindfulness







A revolutionary generation is now disrupting the entire concept of seniors’ housing with a focus on independent thinking in a co-operative environment

Cindy David, Jim Doyle, Arthur Klein, Paul Latimer, Baila Lazarus, David Lee, Dan Levitt, Robert Pascuzzi, Brigitte Petersen, Lori Pinkowski, Collin Zwickel PROOFREADER: Meg Yamamoto DIRECTOR, SALES AND MARKETING : Pia Huynh SALES MANAGER: Laura Torrance ADVERTISING SALES: Benita Bajwa,

Blair Johnston, Aileen Mortimer, Corinne Tkachuk, Chris Wilson OPERATIONS MANAGER: Michelle Myers ADMINISTRATORS: Katherine Butler RESEARCH: Anna Liczmanska, Carrie Schmidt Retirement Ready 2019 is published by BIV Magazines, a division of BIV Media Group, 303 Fifth Avenue West, Vancouver, B.C. V5Y 1J6, 604-688-2398, fax 604-688-1963, biv.com. Copyright 2019 Business in Vancouver Magazines. All rights reserved. No part of this book may be reproduced in any form or incorporated into any information retrieval system without permission of BIV Magazines. The publishers are not responsible in whole or in part for any errors or omissions in this publication. ISSN 1205-5662 Publications Mail Agreement No.: 40069240. Registration No.: 8876. Return undeliverable Canadian addresses to Circulation Department: 303 Fifth Avenue West, Vancouver, B.C. V5Y 1J6 Email: subscribe@biv.com Cover: rtguest/Shutterstock







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From the editor’s desk



here is a gap in Canada between the starry optimism of the young and the honed skepticism of the old. Some may say this has always existed, but since more than 1,000 Canadians are reaching retirement age every day, this deserves attention when discussing retirement preparation. Basically, a recent national study of working and retired people found that 33 per cent of adults under age 34 expect their standard of living will be better when they retire. But only nine per cent of those over age 55 agree. The survey, arranged by the Ontario Securities Commission and released in December 2018, also found that 40 per cent of young adults have not started saving for retirement, and neither have 13 per cent of those over the age of 55, including 18 per cent of women. The survey also found that 40 per

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cent of young adults and 17 per cent of older Canadians report high levels of financial stress. It turns out, however, that much of the stress is not warranted. The survey discovered that nearly half (49 per cent) of retirees say their lifestyle is “about the same” as when they were working. A separate Sun Life survey found that nine out of 10 retirees report feeling positive about post-work life and 60 per cent say they are having more fun.

Percentage of Canadians saving for retirement Age Men 18-24 55+

66% 92% Women

18-24 55+


The reason is retirees often find they need less money in retirement than what they expected. When asked what they think is the biggest surprise of retirement, the top answer (from 32 per cent of respondents) was how easy it is to live on a reduced budget. Retirees are not spending money on business lunches, work clothing, commuting or child care and are paying less income tax. For many there is no mortgage payment. This issue of Retirement Ready is packed with expert advice to ensure an active and rewarding retirement, but one quote should resonate with all those looking towards their golden years. “We are the luckiest people to have ever lived on this planet,” says Simon Fraser University gerontology professor Andrew Sixsmith. “It’s an unprecedented period in history, so let’s make the most of it.” É

Frank O’Brien, editor, Retirement Ready

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LIVING LONGER IN A LUCKY TIME Centenarians are now the fasting-growing age group in Canada – and many are sharing the benefits of the society they helped to build



We are the luckiest people to have ever lived on this planet. It’s an unprecedented period in history, so let’s make the most of it

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rowing up in New York City, Delia Visscher had no idea she would one day reach the age of 88 living on Canada’s west coast. The spry octogenarian, one of the top fundraisers for the Alzheimer Society of BC during the annual Scotiabank Vancouver Half-Marathon & 5K, says her secret to longevity is keeping active by walking and participating in monthly races. “It’s certainly not what I eat,” laughs Wisconsin-born Visscher. “I try to do 10 kilometres weekly to make sure I’m ready for the race.” A Vancouver resident since 1970, the former professional ballet dancer and assistant director for a defunct concert management booking agency keeps her mind active through Simon Fraser University’s 55+ program, where she has been taking courses since 1993, and volunteers as the Vancouver Academy of Music’s community outreach ambassador. Socializing is important to Visscher, who lost her husband Jans to Alzheimer’s disease in 2017. She keeps

in touch with friends and her daughter in Victoria, and is proud of her grandchildren and great-grandchild. Visscher is not alone when it comes to achieving a long life, and while she is not ready to move into a seniors’ residence and is “comfortable financially,” not everyone in her demographic may be as fortunate, according to retirement and aging experts. ACCELERATING TO 100 Q Life expectancy in Canada is around 80 years for men and 84 for women, and more people are living beyond 85. According to the 2016 census, Canada has 8,230 people aged 100 or older.

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This translates to an approximate 41 per cent increase since 2011, which makes centenarians the country’s fastest-growing age group. The number of baby boomer centenarians could swell to more than 60,000 in the next few decades, according to Statistics Canada: by 2051, it estimated Canada will have about 2.7 million people 85 and older – a quarter of all seniors. With more seniors than children for the first time in Canadian history, federal spending benefits will likely climb. “People living longer is both a blessing and a curse,” says John Cindric, a BlueShore Financial adviser who specializes in retirement planning and advises retirees on increasing their net worth. “You get to spend more time with your family, but you have to pay for that time.” This double-edged sword of longevity affects everything from life insurance to pension funds and legacy planning. “Families are getting a little less than they were expecting, and this is largely due to care costs,” explains Cindric. While he currently sees few elderly clients outliving their savings, Cindric predicts future generations may have a different experience due to forecast reductions in government assistance and company pensions, higher housing costs and increasing financial strain on the health-care system. “If you’re in reasonably good health and there is

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longevity in your family, financial health is every bit as important as physical health,” says Cindric, who recommends starting early with a financial plan. “You can never be too early, but you can be too late.” To avoid running out of savings in retirement, Cindric recommends taking the “stew” approach: save a little more; take a little less by living a modest lifestyle; earn a little more with a balanced investment portfolio; and wait a little longer to retire – up to 70 to maximize Canada Pension Plan benefits. While the quantity of life increases, keeping an eye on how the quality of life keeps pace is an important factor, according to an April 2018 Statistics Canada report titled Health-Adjusted Life Expectancy in Canada. An increase in those 85 and older means higher demand for health care, affordable and appropriate housing, income security, transportation and other services. To cover longer-living retirees, a C.D. Howe Institute report released in September 2018 calls for an insurance option for financial risk. Don Ezra, author of Making the Money Last: The Case for Offering Pure Longevity Insurance to Retiring Canadians, argues that governments and Canadian insurers need to provide stand-alone pure longevity insurance. Calling for policy change, Ezra makes the case that retirees should be able to secure a lifetime income stream, instead of worrying about whether they will outlive their assets. In terms of housing, the 2016 census reported that

TOP: Delia Visscher, who

recently turned 88, is among an increasing number of Canadians living active lives well beyond traditional life expectancy | CHUNG CHOW ABOVE: Simon Fraser University

gerontology professor Andrew Sixsmith: longevity is an “amazing achievement” that will continue to affect Canadian society | SUBMITTED

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Living longer in a lucky time

about 247,000 people aged 85 and older were living in collective dwellings including nursing homes, longterm care facilities and seniors’ residences, a 23 per cent increase since the 2011 census. The census found the highest share of people aged 85 and older in three provinces: B.C., Alberta and Quebec, with seven of the top 10 municipalities in B.C.




People living longer is both a blessing and a curse

Number of centenarians


50,000 40,000 30,000 20,000


16 20 2 20 1 26 20 31 20 36 20 4 20 1 46 20 5 20 1 56 20 61



You inherited the house. Now what?


he transfer of a private house through inheritance in highpriced British Columbia can appear to always be a windfall, but real estate experts say there can be challenges. Here are some decisions that can surround a real estate inheritance. ■Cleaning it out: Inherited houses may have accumulated decades of furniture, clothing and other material. The best advice is to hire a professional estate manager to help with the “junk it, keep it, donate it or sell it” decisions. ■Selling it: This can often be the best decision, especially if siblings or others require a share of the estate, or if there is a substantial mortgage remaining.

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Selling may also be a solution to meeting your personal financial needs. Note that the average detached-house price in Metro Vancouver has doubled in value in the past 10 years, but price appreciation has slowed in the past year. ■Renting it: You have to ask if you have the capabilities and time to manage a house as a rental. The income can be steady in a province with a vacancy rate of less than two per cent, but there are landlord restrictions, such as B.C.’s new speculation tax and recent rental regulations from the province and the City of Vancouver that can make it more difficult to achieve required cash flow. For example, rents can be increased by only 2.5 per cent annually in 2019, which is lower than BC Hydro’s

STRATEGY NEEDED Q Simon Fraser University (SFU) gerontology professor Andrew Sixsmith calls longevity an “amazing achievement” and predicts life expectancy will continue to increase in Canada. Sixsmith, who supports the development of a national seniors’ strategy, says the two major challenges with an aging society are helping people age more healthfully and reducing social inequalities. “It’s really about having the ability to make the most of your years,” says Sixsmith, scientific director of the Age-Well Network of Centres of Excellence and director of SFU’s Science and Technology for Aging Research Institute. Despite the challenges surrounding longevity, society needs to adopt a more positive narrative of what it means to be a senior living a long life in our modern world, according to Sixsmith, an expert in technology and aging. “We are the luckiest people to have ever lived on this planet,” he says. “It’s an unprecedented period in history, so let’s make the most of it.” É


scheduled rate increase. ■Keeping it as a second home: This option is problematic in B.C., especially in Vancouver, because of punitive taxes on secondary, vacant homes. If you do not occupy the property for at least six months a year, the

annual tax would be 0.5 per cent of assessed value in most of B.C., plus an additional one per cent if the home is deemed vacant in Vancouver. On a $1 million house, this could be a yearly combined tax bite of $15,000, plus property taxes.

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The vexing decision: to stay in your home during retirement or look at downsizing, retirement communities and other options

A Rising demand and operating costs have increased the monthly rents for independentliving retirement suites in British Columbia by 3.3 per cent in 2018 compared with the previous year

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t least 93 per cent of Canadian homeowners aged 65 or over want to continue to live in their current homes in their retirement years. Some seniors prefer to age in place rather than move into a retirement community because downsizing may not be appealing, while others view their house as a great nest egg to fund their next stage of life. There are many options for your living situation as a retiree, though all come with several factors to consider. STAYING WHERE YOU ARE Q If you are in the camp that wants to stay in your home for the long haul, you are not alone. This may be because the demand and cost of senior living spaces is constantly increasing. The overall vacancy rate for independent-living in seniors’ residences across B.C. was three per cent in 2018, compared with 4.5 per cent in 2017. Rising demand and operating costs have increased the monthly rents for independent living retirement suites in British Columbia by 3.3 per cent in 2018 compared with the previous year. You may also be thinking about eventually passing your home on to beneficiaries. In 2018, the Lower Mainland real estate market was challenged with lower sales volume and lower property values, and there is no guarantee what the future value of your home might be. With this in mind, you may choose not to sell, and preserve your home as an asset to pass on and create a legacy for your family. If you qualify to borrow against your home, there is an opportunity to unlock the home equity without selling. Having access to capital can improve your retirement lifestyle and allow you to gift money to your family in advance, which may outweigh the risk and costs associated with borrowing. However, it is important to discuss these decisions with your family.

If you are planning on staying in your home long term, it is important to ensure you clearly understand all possible expenses, to avoid surprises down the road. A financial adviser can help you make a plan for how much cash flow you will realistically have, and how much the costs associated with your home will be. Property taxes, home maintenance, home insurance, strata assessments and renovations all need to be taken in to account. Costs related to your own health could also increase as you age, and you want to ensure that you have funds available for this. Speaking of health, you need to set aside funds to age-proof your home to make it functional and safe for mature living. It is best to consult an expert for a full list, but you could start with reducing furniture items to create more easy-to-navigate pathways. You may want to replace your bathtub with an option that is easier to step into, and install strong bars in the shower/tub and toilet areas. Installing motion-sensored lighting and railings on all stairways are also smart additions. British Columbia’s home renovation tax credit for seniors allows a $1,000 tax credit to help seniors 65 and older make structural improvements to their homes to improve accessibility. SHARING YOUR HOME  Q A

trend we are seeing more often is home sharing. This is the concept of living with other senior housemates, or family members, in a home and sharing the household costs. Finding the right match may take time, but it can be beneficial for both housemates to be able to help and support each other in retirement while maintaining independence. If sharing the same space isn’t for you, there is also the option of creating a rental suite in your house. Renovations to create a new suite come with initial costs, but monthly rental income will help mitigate this.


Want to make a move? When you retire, supporting your lifestyle with less income can be challenging, and housing can be your largest expense if your current home is time-worn and requires significant maintenance. Downsizing is often a positive option, as moving to a less expensive property can provide you with additional funds to invest, help pay down debt, help out family members or help you enjoy life. A smaller home can potentially mean a decrease in maintenance costs, property taxes and utility bills. Also there could be other savings, such as selling your car, if you’re moving to a city centre with nearby amenities. While there are many benefits to downsizing, you need to remember there are costs involved too. Real estate agents and movers come at a price, and if you’re considering moving into a condo or townhouse, remember that you’re also buying into the building’s strata fees and rules. If making the decision on where to live seems daunting, why not test drive a few plans to see if it is what you were expecting. House sit for a friend who lives in a neighbourhood you’re interested in, or rent out a furnished condo for a month to see how you like it. This way you can find out if the convenience of a smaller home or central location is suitable for you.É

David Lee is a financial adviser at BlueShore Financial with more than 16 years of experience in financial services. He is a certified financial planner and recognized financial management adviser (and holds the elder planning counsellor designation). To learn more, visit blueshorefinancial.com.

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THREE KEYS TO THE EXIT DOOR A successful business succession plan hinges on transferring ownership, raising the business’ value and being sharp on tax strategies


T Sometimes business owners wait until they are ready to wind down as they approach retirement, and it shows in the bottom line

here are a myriad of ways that a business owner can sell a business. This column highlights some of the various ways I’ve seen business owners structure the sale. Three key reasons to have a plan for the succession of your business are: to help you make decisions about ownership; to maximize the value of your company at the time of sale; and to take advantage of tax strategies that are changing constantly in today’s world. OWNERSHIP DECISIONS Q Here are some things to think about well in advance of the sale date. Should you sell slowly over a number of years or try to find a buyer who can afford to buy in a single year? Should you sell to management? If so, do they possess the leadership skills required to run the business and the aptitude for the risk of being an owner? Not everybody is built to be an entrepreneur. When a single owner sells to multiple owners, there needs to be clarity on decision-making that didn’t exist before. And what if you’re selling to family members who don’t get along with employees

Timing an exit More than half of business owners plan to sell within five years Next five years (54%)

Next 12 months (13%)

Next three years (33%)


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or other owners? There may be an opportunity to work through a lot of these issues in a positive way if enough lead time is given. I would suggest asking every person on your team of advisers what they would recommend. MAXIMIZE THE VALUE OF YOUR BUSINESS  Q Making sure your

financial statements tell a good story and that you can make a case for consistent or improving cash flows, addressing the longevity or turnover of employees, and making sure you have access to the capital gains exemption at time of sale, if needed, are all important. Sometimes business owners wait until they are ready to wind down as they approach retirement, and it shows in the bottom line. Selling at the top is not the easiest thing to do, but it can make a big difference to your bottom line when it comes to retirement. Sometimes it’s a matter of a maturing workforce that is ready to retire when you are. And sometimes companies have grown organically and the owners end up with real estate assets inside the operating company that they are hoping to sell. Many business owners plan on keeping the real estate that the company operated out of and supplement income with rent. Recently a client sold his business, and the real estate is for sale for four times the value of the business. Then there’s timing the market: if you’ve grown your business over your whole working life, what happens when you cash out at a time like now when markets are correcting? There is such a thing as “the unlucky years to retire” that can affect how long your money lasts. TAX CHANGES Q This topic could be an entire article. The best advice is to get up to speed on the benefits of a share sale, an asset sale or a hybrid of the two. In order to qualify

for a share sale, which gives you access to the capital gains exemption, you need to make sure you have satisfied certain rules, and sometimes it can take a couple of years to properly cleanse a company and access this significant tax advantage on sale. With a share sale you end up with tax-paid personal cash to plan for retirement. This may seem like a great idea initially, but it does limit some tax planning that can be implemented for clients with investments in their holding company for retirement and estate planning. Even with a share sale you may have cash in a holding company that you saved over time, or it can be the result of an asset sale. Planning opportunities I like to take advantage of are: income splitting from the holding company; making use of insurance tax shelters and the capital dividend account (CDA) credit to never pay tax again on those investments; and the ability to wind down registered retirement savings plans or registered retirement investment funds early in lower tax brackets in early years to avoid the pain of paying 49.8 per cent in tax on any remaining balance at death. Taxes later are better than taxes today, however, so if you’re in the highest tax bracket no early withdrawals are recommended. É Cindy David is president and estate planning adviser at Cindy David Financial Group Ltd. of Vancouver, which consults to national firms such as Raymond James Ltd., group employee benefits brokers and investment consultants such as Bull Wealth. David is co-author of Financial First Aid for Canadian Investors: Stop the Bleeding, Start the Healing and Get Your Portfolio on the Road to Recovery. She can be reached through cindydavid.ca.

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Retirement & Estate Planning Ask an expert today

Good advice shouldn’t be hard to find, you just have to know where to look. Cindy David Financial Group is a boutique estate planning firm serving Canadian families and businesses. We help you to build and protect wealth, retire on your own terms, and give back to your community in a meaningful way. We also specialize in business succession and continuation, helping owners transfer their business interests in a smooth and tax-efficient manner. Cindy David, CFP, CLU, FEA TEP President & Estate Planning Advisor Cindy David Financial Group Ltd.

Our goal is to bring clarity to complex situations. Together, we will build a customized financial plan that will enable you to live your dreams with peace of mind.

cindydavid.ca t604.659.8020

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Financial Group Ltd.

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BEYOND BONDS Rising interest rates are lowering the value of existing bonds, which have been a traditionally conservative strategy for wealth preservation



his timely advice is for individuals retiring soon and those who are already enjoying the golden years: having a proper plan in place leading up to retirement allows the mind to rest easy and, hopefully, benefit from some tax savings along the way. As we live longer and the investment landscape has become more challenging, it is increasingly important to understand where you and your wealth tie into the equation. While it’s a blessing for most of us, a longer life also presents challenges. Outliving retirement savings is one – and it’s the greatest fear of pre-retirees. Health problems are another: out-of-pocket medical costs are estimated at $5,400 annually after age 65 – and are likely to keep rising. This means that aging Canadians require their investment portfolios to support longer life spans while generating cash flow to cover potentially increasingly higher living costs. For many years, a key investment-pl a n n i ng quest ion wa s, “When do you plan on retiring?” Towards the end of your time horizon, you would gradually ratchet down risk, eventually transferring to assets with little to no risk, such as guaranteed income certificates and bonds. The presumption being that, once you hit retirement, you

If you’re a buyer of bonds in your portfolio, it is important to look at the maturity term of bonds as the Bank of Canada has signalled there will be more interest rate hikes beyond 2019

AVERAGE BOND YIELDS U.S. 10-year yield

18 20

17 20

10 20

00 20

90 19



14% 12% 10% 8% 6% 4% 2%

The bond rate, based on the 10-year U.S. Treasury rate, increased marginally from a year earlier in 2018 for the first time in more than 30 years. SOURCE: RBC DOMINION SECURITIES

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couldn’t afford to take any risk, as you would need your savings to fund your retirement. This strategy made more sense when the average Canadian retired at 65 and was likely to live for only another five to eight years. But a new approach is required with Canadians today retiring on average at 63 and living into their 80s and 90s – and an increasing number to age 100 and beyond. Fortunately, longer lifespans mean longer investment time horizons, allowing today’s retirees to take advantage of the long-term growth of equities to meet their wealth preservation and income needs. Whether or not you live to 100, considering the odds and planning ahead can help ensure that your golden years are just that. FLOW AND FOCUS Q Today, your retirement portfolio should ideally focus on two things: ■a tax-efficient cash f low for a well-funded retirement lifestyle; and ■a prudent combination of capital preservation and growth to maintain the long-term value of your portfolio through your golden years, while also offsetting the ravages of inflation. Remember the early 1980s when interest rates were 18 per cent? Over the past 30-plus years, interest rates have been trending lower until bottoming in the last decade. It’s only in the last few years we’ve really seen rates start to trend higher in a real way. So why does this matter to retired individuals? It’s simple – as interest rates rise, the prices of existing bonds tend to go down. So that conservative portfolio of 70 per cent bonds that has worked so well over the last several decades has got hit the hardest over the past few years. If you’re a buyer of bonds in your portfolio, it is important to look at the maturity term (or length)

of bonds as the Bank of Canada has signalled there will be more interest rate hikes beyond 2019. TRUSTS AND SUCCESSION Q Ac-

cording to the National Association of Corporate Directors, fewer than one in four private company boards says it has a formal succession plan in place. Trust structures, however, are popular planning vehicles and can be implemented during your lifetime or under the terms of your final will and testament. Different trusts can allow control over assets while passing on the beneficial ownership. If you’re over 65 years of age, “alter ego” trusts can be a great way to shift ownership without potentially being hit with a tax bill. If you’re looking to sell your business, using the lifetime small-business capital gains exemptions, tying in family members, may be of benefit. With the federal tax changes, business owners are increasingly looking for corporate tax deductions. Individual pension plans allow business owners to transfer cash from the company to a personal pension plan, which can defer tax. Having a financial plan that ties into a portfolio with purpose and direction is key. The term “wealth management” gets thrown around a lot these days: it is important to understand what this actually means and how this relates to your specific plan. É Collin Zwickel is a Vancouver-based investment adviser with RBC Dominion Securities Inc./RBC Wealth Management. This article is for information purposes only. Please consult with a professional adviser before taking any action based on information in this article. Zwickel can be contacted through collinzwickel.com.

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WHEN MARKET VOLATILITY AFFECTS RETIREMENT Retirement plans can be derailed by stock market volatility but a five-point strategy can get you back on track


R I believe it’s important to have an active approach, to get defensive when a bad market hits, by moving some of your money to sidelines in cash rather than passively holding

etirement should be an exciting time allowing you to focus on the things you love the most.  While the first step is to have a plan, what happens when you’re retired and the stock market volatility hits your portfolio? It can cause higher levels of stress and emotion that lead to making poor decisions, which may actually leave you in a worse situation. Market volatility occurs regularly when investing, but how your portfolio is structured and managed makes a difference in how that volatility affects you. Many retirees may not have had as many in-depth discussions as they should have with their financial adviser about how much risk they are willing to take, and what that actually means for their portfolio. Here are five tips to help protect yourself during times of extreme volatility.


qualified team with a proven strategy who will actively manage your investments. A discretionary portfolio manager can take action more quickly for all his or her clients rather than having to call every client individually to make a change in their portfolios. T his allows them to raise cash quickly if needed during market downturns.  I believe it’s important to have an active approach, to get defensive when a bad market hits, by moving some of your money to sidelines in cash rather than passively holding. After all, you won’t be able to make up significant losses in your portfolio if they occur, as you’re no longer working in retirement. DON’T LOOK AT YOUR PORTFOLIO DAILY Q Monitoring that closely

doesn’t help you and will only add to increased anxiety over short

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periods. You don’t ask a real estate appraiser to estimate the value of your house daily, so why look at your portfolio daily? Market downturns are a necessary evil when investing; and although they can be painful, as long as your team has a plan on how to deal with the volatility, your portfolio should recover from it quickly. Keep in mind that “quickly” can mean months in financial markets, but if you have a long-term plan, you’re not spending the entire portfolio tomorrow and you can be patient. You still want to be vigilant though, as a small drop is easier to recover from.   ENSURE YOUR INCOME WILL REMAIN STEADY Q Income will con-

tinue during unsettling times, but for a short period of time you may be drawing on capital or previous profits, which is normal. After some time you’ll have a cushion built into your portfolio from the “good years” that will help you in the years that aren’t so great. DON’T CHANGE THE GOALPOSTS IN THE MIDDLE OF THE GAME Q Try

not to allow your emotions to take over during a market correction and sell at a bad time – which is why it’s important to be with an investment team that is actively raising cash as conditions change. You certainly have control over your investments, and if you aren’t comfortable with your equity exposure, you may want to be “out of the market.” In my opinion, if you don’t have a full understanding of the markets, or don’t have enough information about the companies you own in your portfolio, then making snap decisions could drastically impact your long-term retirement negatively. For example, selling at the bottom and staying in cash because you may be too fearful to re-enter the market.


holding some equities and you believe that a 10 per cent drop in your portfolio is the most you can handle then calculate what that would look like in dollars. If you have $1 million invested and it declines by $100,000 for a period of time, will that keep you awake at night? If the answer is yes, then you should have more of your money allocated to lower-risk, and lower-return investments. This will substantially reduce your expected long-term returns, but you can factor that into your financial plan. Also refrain from measuring from the peak in performance. Your financial adviser should maintain higher cash levels when dealing with uncertain markets, but also be ready to take advantage of favourable opportunities as they present themselves. A comprehensive and personalized financial plan can also keep you focused on the goal of a happy and fulfilling retirement despite market conditions.  As they say, after the rain the sun will shine! É Lori Pinkowski is a senior portfolio manager and senior vice -president, Private Client Group, at Raymond James Ltd., a member of the Canadian Investor Protection Fund. This is for informational purposes only and does not necessarily reflect the opinions of Raymond James. Past performance is not necessarily indicative of future performance.Pinkowski can answer any questions at 604-915-LORI or lori. pinkowski@raymondjames.ca. You can also listen to her every Wednesday morning on CKNW at 8:40 a.m.

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I The fear of “underliving” in retirement results in Canadians feeling anxious about their spending choices … and finding it hard to strike a balance between enjoying retirement and making their money last

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t wasn’t too many generations ago that you worked until you could no longer do your job. There was no social security, no i ncome supplement. You supported your family with what savings you had, or you relied on the generosity of friends and family. When German chancellor Otto von Bismarck proposed the groundbreaking old-age social insurance prog ra m i n 1891, we were fi rst introduced to the concept of a retirement age. Few may note the original retirement age was 70, which was lowered to 65 in 1916. Canada introduced old age security in the 50’s and the Canada Pension Plan – in the late 60’s. With average Canadian life expectancy of the day reaching seven years beyond retirement, there wasn’t a lot of financial planning needed at that time to enjoy a long retirement. Is retirement an event or a destination? Chances are, the answer you get may depend on your perspective and how financial knowledge is passed from generation to generation in your family. Personally, I’d like to believe that when it comes to money, many of us learn our money beliefs from our parents. Was money a taboo subject when you were growing up or was it openly talked about? Were concepts like retirement needs and plans to get there talked about? Chances are, if these concepts weren’t openly shared, we were left to develop our own perspectives over time. In the course of evolution, retirement may be a relatively current concept, and maybe because it’s so new is why we have so much difficulty truly defining in detail what it means to each of us on a personal level. For many, gone are the days when you worked for one company for your entire life and retired on a company pension. As a result, our

Planning and professional advice can ease the No. 1 fear: running out of money in retirement

“retirement vision” may be somewhat unique to our own experiences, history and expectations. We have terms like “pre-retirement” and “retirement” that are material to us, while terms like early retirement, mid-retirement or late retirement are vague and difficult to imagine, remaining somewhat undefined. Each of these stages comes with distinct goals and challenges that need to be well planned for. What is clear is one of the major fears of many retirees: running out of money in retirement. It can be hard to envision a retirement of 30 years or more – and which planning elements need attention at which stage. We all want to live the retirement dream to the fullest – time with family and friends and, perhaps, sunny beaches. The fear of “underliving” in retirement results in Canadians feeling anxious about their spending choices, worried about running out of money, and finding it hard to strike a balance between enjoying retirement and making their money last. Really, retirement should be low on stress and high on living life to the fullest. That being said, while some of us are fearful of overspending, many of us are habituated to spending what we make. The funny thing about retirement is that many believe they should spend all they make because they’re retired. These choices have deep roots and affect everything from how we construct our portfolios to how we spend our time in retirement. Making plans based on professional advice is at the very core of planning for life after retiring and can help you avoid overspending or underliving. We see people put off experiences they’ve dreamed of their entire lives, missing out on many of life’s little joys. If you are

missing out on meaningful experiences for fear of overspending, you might want to ask yourself why. Wealth management is an often misunderstood term. Many people think wealth managers just manage investments, and that’s simply not true; those are investment advisers. While there are some commonalities between the two, for too many investors, wealth management is about selecting the best-performing investment above all else. Dig a little deeper and you’re likely to find interconnected areas that create a significant need for comprehensive advice – from investments and cash flow management to education and tax planning – not to mention the integration of retirement income planning and estate planning with risk management solutions. Money anxiety can be reduced by working with a financial planner to create a well-written financial plan, and regularly reviewing and monitoring it for changes. To reduce your financial blind spots, consider working with a planning coach who provides a comprehensive approach to your wealth management and creates a living plan that will be adjusted over time – allowing you to put the focus back on living a life well lived. É Jim Doyle of Doyle & Associates Private Wealth Management of Vancouver is a senior financial consultant with IG Wealth Management, Investors Group Financial Services Inc. This column is meant as a general source of information only. It is not intended to provide personalized tax, legal or investment advice and is not intended as a solicitation to purchase securities.

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10 TIPS TO RETIRING RICH Financial adviser and author tells 40-somethings they can “get tough and retire rich,” and his No. 8 tip is likely the key


1 . D O N ’ T WO R RY A B O U T TH E AMOUNTS Q  Even a jou r ney

First, be sure that you are on track to save at least seven times your annual income for retirement

around the world begins with the first step. It’s a better idea to start investing anything you have now instead of waiting until you have a certain amount. Even if you can spare only $10, it is better to put it in a piggy bank and have your own Square 1 to build on instead of having it go towards an unnecessary purchase. 2. INVEST SMART  Q

W hen you invest, make sensible, intelligent choices. Most people wou ld definitely not think it’s a good idea to bring their life savings to a casino. The same is true with investing; don’t try to beat the house in the “Wall Street” casino. Even seasoned pros can be tempted by a fast buck or two, but think more long term. It’s better to have a long-term stable gain at lower annual returns than it is to watch your money go magically up one minute and drastically down the next. 3. MAKE A DECISION  Q

Even at the very beginning, it’s important that you have the right mindset about investing. You need to make a decision that you will invest and that you will do it right. Even if you logically know that when you invest the money is still yours, it can still be psychologically difficult to let it go from your hand. You may start to think that maybe you’ll invest only part of it now and spend a little, then make up for it later. Right away you need to realize that investing is the wisest thing you can do and you can’t let temptation sway you from your goals. Just as the old saying goes, “Save the best for last”, you should “Invest now, get the best rewards later.”


y o u’ v e m a d e t h e d e c i s i o n t o do what’s best a nd i nvest, you need to commit to the long-term

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strategy. The absence of immediate gratification can sometimes make you lose focus. After the initial excitement of starting to invest your money wears off, you may be tempted to start dipping into the funds earmarked for retirement and use them for other things. Don’t. Stay the course. You will thank yourself later. 5. DO YOUR HOMEWORK  Q

It’s go o d to se ek t he a dv ic e of a n expert, but it’s important that you do your own research and make informed decisions, as opposed to being blindly led into the world of financial investments. In the end, no matter how prestigious an adviser is, it’s still your money and you’ll want to know that you always did the smartest thing. You need to be your own chief financial officer. First, be sure that you are on track to save at least seven times your annual income for retirement. Next, look into the benefits and risks of d i fferent ty pes of i nvestment. Seek advice but try to find multiple sources so you will have a broad view of where your money is, where you’d like it to be and how to get it there.

6. GET ORGANIZED Q Make sure that you have all the information about your accounts and amounts organized so you know exactly what is happening with your money. You’ll want to know how much you are contributing to each fund or account, how much you are making and exactly how they are being managed. It’s also important to make sure that you and your spouse or partner are on the same page and have the same goals. 7. DON’T SPEND EMOTIONALLY Q

It’s fun to dream of a fancy sports car or getting the most impressive, lavish cabin on the ship during a cruise, but be sure not to lose sight of the forest for the trees. Whatever

you sp end money on, ju st a sk yourself if it will be worth it 10 or 20 years down the line. Spend only on what counts and do yourself a favour. 8. EXPECT TO RETIRE RICH Q Ex-

pectations determine reality. When we expect to do something, even before we know how, we get ourselves mentally prepared to make that outcome happen. Keep raising your expectations and let that future get brighter and brighter. 9. BELIEVE YOU DESERVE IT  Q

Just as ex pectations shape our outcomes, so does self-image. If you think that you don’t really deserve money, you may not get it. You might subconsciously make decisions that will not lead to you fulfilling your potential. If you believe in yourself and let yourself be confident and let go of fear, you will start taking action and turning those dreams into reality. 10. S TA R T I N V E S T I N G N OW  Q

Whether or not we are ready for it, time keeps moving on. It can be easy to procrastinate and tell yourself that you’ll start investing when the time is right, but the right time is always right now. If you wait until the conditions are perfect, it may very well be too late. É Robert Pascuzzi is the director of retirement plans for Creative Planning, named the No. 1 independent wealth management firm in America by Barron’s. This column here is drawn from Pascuzzi’s new book Get Tough, Retire Rich: Amassing Your Fortune a fter 40, available through Amazon.

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Rationalizing of a goodwill premium by the seller and the buyer of a business requires careful consideration

I You buy a business for $1 million. The fair value of all the equipment, inventory and intangible assets is $240,000. The remaining difference is considered to be goodwill, in this case $760,000

BUSINESS ELEMENT Client base Brand

Operations management

Material agreements

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f t here i s one c om mon d enominator that affects a business transaction of a small to medium-sized enterprise it is the factor of goodwill. T he ex pectations of both the owner (seller) and the buyer of that business will be a test of wills around how to qualify the value of goodwill, define business transition and more. T he accepted financial or accounting definition of goodwill is the ability of a business enterprise to earn a rate of return on net assets (owner’s investment) in excess of a normal rate for the industry in which the business enterprise operates. In other words, goodwill is the difference (or premium) between the value of a business enterprise as a whole and the sum of the current fair values of its identifiable tangible and intangible net assets. Think of it like this: You buy a business for $1 million. The fair value of all the equipment, inventory and intangible assets is $240,000. The remaining difference is considered to be accounting goodwill, in this case $760,000. Given that intangible assets represent the excess market value of a business, beyond the value of its tangible assets – goodwill (an PERSONAL GOODWILL Customers do business due to personal relationship with the owner Often business name is that of the owner; focus is on reputation, skills and experience of the owner Business is largely reliant on the owner for income generation Service, supply and pricing terms are often left to a handshake between customer and owner

intangible asset itself) is one that cannot be traced to an identifiable source. Nor can goodwill be separated from the company or business. Examples of typical intangible assets include patents, trademarks and contracts. So the rationalizing of a goodwill premium by the seller and the buyer requires careful consideration and analysis. Since there may be a variety of reasons why this goodwill exists, it is considered to be an “unidentifiable intangible asset.” Goodwill is a capital expenditure as opposed to a current operating expense. In business valuation, segregating the intangible value of a company between personal and enterprise goodwill is becoming increasingly relevant and is constantly tested. So let’s revisit some business valuation fundamentals. Valuing intangible assets: Intangible assets often form the basis of a business’ competitive advantage. Their value can be hard to determine, but a business (owner) should always consider doing so. Unlike tangible assets (such as machinery and equipment), which often depreciate over time, the value of intangible assets (such as business’ brand, product formulas, employees’ skills and knowledge) COMMERCIAL GOODWILL Clients do business based on location, or company specific factors Management or ownership is not the focus; whereas the collective entity/ offering is Business realizes performance from the collective whole and capacity of income would not disappear if ownership left Key supply or sales agreements are structured between parties and are fulfilled and respected in absence of ownership

often increases over time. However, accountancy rules don’t allow for such an increase in value to be included in the balance sheet. That is why it is important to seek professional advice about valuing your intangible assets. Three main methods of valuing intangible assets are: ■Income approach – assumes that the value of an asset is the present value of future earnings from the asset ■Market approach – based on market evidence of what third parties have paid for comparable intangible assets, though in practice, this method is difficult to apply. ■Cost approach – based on estimating the costs of constructing or acquiring a new intangible asset that is of more or less the same use as the existing one. Business owners are in the position to best manage their destiny by undertaking measures to convert personal to commercial goodwill. Often one of the most critical shortcomings is underestimating the capability of their employees. Whether due to deficiencies in staff skillset, experience or capability, owners often default to retaining control of key tasks, relationships, etc. In this context, a buyer, whether personal, strategic or financial will seek to de-risk this goodwill – often in the amount of the offer, terms of training and transition or requirement of vendor financing or earnouts. É Arthur Klein is a merger and acquisition adviser with Vancouver-based Pacific M&A and Business Brokers Ltd. He can be reached at 778-329-9558 or through pmabb.com.

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RETIREMENT SHOULD BE A CHOICE A psychiatrist’s advice: there is no reason to stop living at 65 so get out there and get involved



challenged in court and are felt to be discriminatory. Retirement should be a choice. Being active is not a matter of doing just anything – you should pick an activity that is meaningful to you. Simply going through the motions is not enough to provide satisfaction; you need to do something you look forward to and are eager to get back to. Pursue your interests and hobbies, go back to school, travel or get together with friends. Many people find satisfaction from getting involved in a volunteer organization. Not only is this a good way to meet

WORK ACITIVITY OF SENIORS According to the 2016 census data, one in five Canadians aged 65 and older is still working. This is the highest proportion recorded since the 1981 census, and the trend is accelerating. Of the seniors who work, about 30 per cent do so full time,and the majority are men.





people, but it’s a way to help the community and use your knowledge and skills in a meaningful way. A ll of these activities help to ensure you don’t spend your retirement sitting alone in a rocking chair waiting for your relatives to phone you. Intellectual activity has potentially protective effects on an aging mind. Not only do challenging activities such as social games, dancing and volunteering protect your mind from decay; they also bring satisfaction and enjoyment into your life. Many people develop depression during their retirement years because of a lack of involvement with the world. They feel segregated and alone and often feel cut off from society once they are no longer active in the workforce. This decreases overall contentment is also hazardous to a person’s health as depression increases risk of death from various cardiovascular complications. Many other health consequences are also associated with depression. Take the time now to develop interests and to think about how you would like to spend your time. There is no reason to stop living at 65 – so get out there and get involved. É Dr. Paul Latimer is president of Okanagan Clinical Trials and a Kelowna psychiatrist.



00 20 05 20 10 20 15 20 20 *

If you truly enjoy your work and feel fulfilled in it, retirement should not be a foregone conclusion. In fact, many people continue working their entire lives because they choose to

e see them everywhere. Retired members of our c o m m u n i t y, a l l o v e r town, enthusiastically engaged in activities. They are enjoying a game of golf or shopping at the mall, working in their gardens or swimming at the pool and sometimes taking the bus to an activity centre for a game of cards with friends. These are the people who have the right idea about retirement. Sadder cases are the ones we don’t see. Loved ones who remain confined in their apartments for days at a time with no visitors and very little activity. Often they have no reason to get up in the morning and are just waiting to die. For many of us, thoughts of our later years have us feeling a little conflicted. On the one hand, a lot of us enjoy our work and don’t want to give it up. On the other, many of us look forward to travelling and enjoying more time to spend on our other interests. The important thing is to make sure that your later years remain active, involved and intellectually challenging. If you truly enjoy your work and feel fulfilled in it, retirement should not be a foregone conclusion. In fact, many people continue working their entire lives because they choose to. Look around at some of the most successful, educated and inspiring people in the world – very few of them retire. If you are part of an organization that requires retirement at a certain age, perhaps it is time to start another career. More and more, mandatory retirement laws are being


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RETIREMENT HOMES A revolutionary generation is now disrupting the entire concept of seniors’ housing with a focus on independent thinking in a co-operative environment


When seniors were encouraged to make decisions for themselves, 93 per cent improved their quality of life


he movement to reform Canada’s seniors’ housing has its roots in the 1987 Nursing Home Reform Act, which declared that residents of long-term care have the right to be free from abuse or neglect caused often from physical and chemical restraints. The legislative reforms ushered in a movement within the nursing home industry that has tried a variety of strategies to treat elders with greater respect. In 1976 psychologists Ellen Langer and Judith Rodin investigated the effects of choice and enhanced personal responsibility for the aged, which resulted in a groundbreaking study on the impact of loneliness on seniors. They selected two floors of a nursing home. One group was told the staff was there to help them. Despite the care, 71 per cent got worse in co-morbidity quality indicators in only three weeks. On the other floor, where seniors were encouraged to make decisions for themselves, 93 per cent of the residents improved their quality of life. They were more active and happier. They

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were more mentally alert and more engaged in activities. Today the aged-care industry is changing dramatically around the globe – and a shift towards personal responsibility and societal interaction is at the forefront of this revolution. Nursing homes are being replaced with centres of living, designed as small households where perhaps a dozen people live together. They share meals around a large dining room table, with an open kitchen and access to food 24-7. The seniors choose what they want to do and when they want to do it. The small homes have no

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characteristic features of a traditional nursing home. There is no central nursing station and no long corridors or bright fluorescent lights. Residents are not rushed to make it to a meal on time. Such revolutionary models are disrupting the aged-care sector and, in some markets, traditional old-age institutions are reinventing themselves as small homes or closing down. We are also seeing homes for the aged being built in the midst of residential neighbourhoods, creating a community hub not just for seniors but also for middle-aged adults, young adults and children. These vibrant town centres are complete with community amenities such as libraries, pools, restaurants, child care, schools, and senior wellness centres. In a Netherlands’ university, it was found that student dormitories were full, but a nearby home for the aged had vacant suites. Students were invited to move in with the seniors and soon became actively engaged in the new multi-generational community. This movement has morphed across Europe, where families live nearby, becoming volunteers supporting seniors while their kids adopt a senior as a grandparent. The more famous “dementia village”, a short train ride from Amsterdam, turned the nursing home upside down with its small-house concept of six people living in a household with walkable access to a complete village within a secured perimeter. The most innovative aspect of this community is the general store where seniors, accompanied by a caregiver, shop each day for household groceries and supplies. These seniors, most of whom have advanced dementia, experience industry-leading aged care a generation ahead of its time. (Editor’s note: Canada’s first dementia village, The Village, opens in Langley this summer.)

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TOP: Tabor Village in

Abbotsford: shared meals and responsibilities make for healthier, happier retirement communities | SUBMITTED ABOVE: Dan Levitt shares a light

moment with his 90-year-old grandmother, Mary | SUBMITTED

In Tokyo, Japan, 10 centenarians with dementia live together in a group home where their daily choices include meals, walking exercises and meaningful activities. Seniors are retrained so they no longer use incontinence pads, saving money while improving dignity, self-esteem and quality of life. Physiotherapists mobilize seniors out of their wheelchairs to walk with mobility aides. The village movement is an offshoot of the sharing economy. Hundreds of online virtual villages are popping up all over the United States with more on the drawing boards. These villages are low-cost ways to age in place and can delay going to assisted-living facilities. The core of these villages is volunteers helping with household repairs, yardwork, picking up prescriptions or taking members shopping, to the doctor or even personal trainers. Another innovative living option is senior co-housing, which is also focused on aging well in community. Residents design and manage senior co-housing themselves, relying on mutual support and a resident caregiver they hire as needed. Communities are designed for physical accessibility as well as financial, environmental and social sustainability. We have come a long way from how our grandparents were housed and treated. With the research and understanding now emerging, seniors’ housing is becoming more welcoming and healthy for future generations. É Dan Levitt is the executive director of Tabor Village in Abbotsford, an adjunct professor in gerontology at Simon Fraser University, an adjunct professor at the University of British Columbia School of Nursing and a board member of the Global Aging Network. This column is condensed from a TEDx talk by Levitt.

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Transformational coast and mountain retreats offer direction in navigating and accepting life’s changes through mindfulness




lobal spiritual leader and Buddhist monk Thich Nhat Hanh teaches that through mindfulness people can live fully aware of the present moment and in that way achieve true happiness and peace.

For retirees undergoing significant life changes or looking for a new direction or purpose in life, the practice of mindfulness can bring clarity. Thanks to a growing interest in self-awareness, retreats around B.C. are creating programs that embrace mindfulness as part of their courses and activities. While definitions of mindfulness vary, it tends to comprise elements of being alert to one’s actions, feelings, thoughts and energy in the present moment and tuning in to positive thought

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patterns that enhance energy and focus. “It’s is the practice of paying attention to the energy that you’re radiating out into the world with thoughts, words and actions,” says Cynthia Miller, owner of Pacific Peace Retreat on the Sunshine Coast. “Being present and intentional helps to keep me in line with what I want to create energetically, and we can train our brain to be that way.” Miller includes meditation, yoga, reiki, mindset

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ABOVE: Haven faculty member

Jo-Ann Kevala: “there’s still a need to find peace and make friends with that inner voice” | SUBMITTED RIGHT: Set on the tranquil, forested shores of Gabriola Island, the Haven offers a variety of programs for transformation and growth | SUBMITTED

coaching, creative arts and hypnotherapy as some of the different modalities she offers to guests. “I have some techniques to help someone look at their situation from a different perspective,” says Miller. “It’s about being present and seeing opportunity instead of a challenge, being expansive instead of limiting. Being mindful is removing the blinders and not being controlled by your beliefs.” Miller cautions that mindfulness doesn’t stop at justbeing self-aware. “It’s putting awareness into action,” says Miller. “What am I creating in this moment? Is it really what I want to be doing?” On Gabriola Island in the Georgia Strait, the Haven offers participants dozens of programs that deal with communication, conscious living, self-compassion and building relationships, among others. Each of its courses, which last several days to several weeks, have elements of mindfulness training, especially those focusing on self-compassion. “It can be about finding your present state of mind, relaxing into the now,” says Haven faculty member Jo-Ann Kevala. “Because of higher stress in life, higher digital content, the pace has gotten so fast for people.

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ABOVE: A sunset view from

Hollyhock Leadership Learning Centre, Cortes Island | AMANDA MARY CREATIVE ABOVE RIGHT: Participants take a meditative stroll at Hollyhock Leadership Learning Centre | AL WESTNEDGE RIGHT: The garden and lodge at Hollyhock Leadership Learning Centre | AMANDA MCNAUGHTON

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Mind at peace


Quantum Leaps Retreats in Golden combines First Nations spirituality, Buddhist teachings and other philosophies | SUBMITTED At Quantum Leaps Retreats in Golden, a meditative walk in the transformational labyrinth encourages participants to reflect on their lives | SUBMITTED Including First Nations spirituality in its programs, Quantum Leaps Retreats facilitates a sweat lodge ceremony for mental, emotional, physical and spiritual cleansing | SUBMITTED

Coming back to the present moment is not something that people are good at. People come to the Haven to quiet the constant internal distractions.” Kevala points out that even in retirement, stress still has a hold on people, even if they’re not working daily. “The inner critic, self-doubt, self-questioning tends to find new things to focus on,” she says. “There’s still a need to find peace and make friends with that inner voice.” Farther north, on Cortes Island, Hollyhock Leadership Learning Centre offers 90 courses annually on wisdom, wellness, creativity and social innovation. From two-day courses on your life’s purpose to 14-day silent meditation, many of these embrace mindfulness as a key component, such as Mindfulness Meditation and

The Only Retirement Health Plan with flexibility to cover your changing needs. s.

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Mindful Self-Compassion. Mindfulness courses “provide a deeper sense of awareness and presence of self and the way you relate to the world,” says Hollyhock communications manager Loretta Laurin. “For people looking for meaning later in life who tend to have more time due to less focus on work or kids and who can focus on themselves, the opportunity to know yourself deeply is a beautiful thing.” Hollyhock also has programs specifically geared toward older age groups, such as Come of Age. “It’s for people coming into their role in the community as elders and what that means,” says Laurin. “We look at traditional knowledge and see people in older age groups as being the keepers of knowledge and wisdom, so how do we reclaim that?” Tapping into a wide variety of mindful activities, Brian Olynek and Annette Boelman have brought together First Nations spirituality, Buddhist philosophies and a host of other teachings at Quantum Leaps Retreats in Golden. Visitors can participate in sweat lodges, vision quests, shamanic drumming, fire walks and various types of breathing and meditation techniques. “It’s really about stepping out of our programming,” says Olynek, who has been an avid outdoor guide much of his life and used to run whitewater rafting companies in Golden. He’s also trained to lead visitors in fire walking and holotropic breath work. Boelman has also worked many years in outdoor recreation and practises massage and craniosacral therapy. “The retreat can help people tap into their creativity and not be caught up in being a victim or be materialistic,” says Olynek. “Our society is based on stress, and when you get stressed out you get more selfish. If you can shift out of that into a more giving and sharing type of relationship with yourself, with others and with nature, that’s more heartful.” É

A healthy retirement? Call 1 800 USE-BLUE

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Who will write your will?


f you don’t write your will, the B.C. government will do it for you, using the Wills, Estates and Succession Act, (the act) notes Mary-Jane Wilson, author of the British Columbia Probate Kit and a partner in the Surrey law firm of Wilson Rasmussen LLP. “The act basically writes a will for you and you have no say in who gets what or who administers your estate for you,” she cautions. Some believe if they do not make a will, their assets will go to the government. This is not always true. The act sets out the scheme of distribution as follows: The first $300,000 is paid to the surviving spouse if they have children in common, and $150,000 if they don’t. The balance of the money is split equally between the spouse and the children. If the children are minors, the money is held by a public guardian and trustee and released to the children when they reach the age of 19. There is no opportunity to set up a trust or have the spouse or parent of the child administer the money. If there are no children or spouse, then your estate is generally distributed to family members in the following priority: (a) your parents; (b) your brothers and sisters; and (c) your


nieces and nephews. The distribution stops at the 4th degree of relationship to the deceased. If you die leaving none of these relatives, the act states that the provincial government will be the beneficiary of the entire estate. The act only deals with assets solely in the name of the deceased. Property held in joint tenancy and assets with a

where they can, so that on the death of one spouse, all assets are distributed to the surviving spouse, even if there are children. “Dying without a will means you do not choose who your beneficiaries are. It can also mean delays, extra expenses, and considerable inconvenience and even hardship for your survivors,” Wilson says.

designated beneficiary such as Registered Retirement Savings Plans, Registered Retirement Income Funds, Tax Free Savings accounts, pension plans and life insurance policies are distributed to the designated beneficiary named and not pursuant to the Act. Many couples will hold all of their assets jointly and designate each other as beneficiaries




Mary-Jane Wilson

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CPP to fatten pension payments

Taxpayers on hook for federal employee pensions



hanges made last year to the Canada Pension Plan (CPP) will mean higher pension cheques for retirees and higher contributions from workers, starting this year. The changes aim to increase the amount of income replacement the CPP provides from one-quarter of pensionable earnings to one-third. For example, a worker who makes $50,000 while working would have annual CPP benefits of $16,000 per year, up from $12,000 before the changes. As well, the new plan will increase yearly maximum pensionable earnings to $82,700 by 2025, from $54,900 where it currently stands. The changes, which will be phased in starting in January 2019, will lead to an increase to


5.1 per cent for employee and employer contributions this year, based on maximum annual earnings of $57,400, with a yearly maximum contribution of $2,748.90. The maximum annual contribution for self-employed persons rises to $5,497.80. TD Economics’ Brian DePratto notes this is the first major change to Canada’s pension plan since it was first introduced in 1965. The changes will be a “significant, guaranteed enhancement” to the retirement incomes of most working Canadians, he says.

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anadian taxpayers are on the hook for the unfunded liability of pension plans for federal employees, according to a 2018 report from the C.D. Howe Institute. In Retiring Employees, Unretired Debt: The Surprising Hidden Cost of Federal Employee Pensions, authors William B.P. Robson and Alexandre Laurin argue that official figures for federal pension obligations understate future costs and leave many plans seriously underfunded. “The federal government in particular presents a misleadingly rosy picture of the situation of its plans,” writes Robson. “Ottawa’s unfunded pension liability is nearly $100 billion worse than stated. This is


unsettling news for the federal employees who belong to these plans, as well as for taxpayers.” Ottawa provides its employees with defined-benefit pensions that promise relatively generous benefits to a large current and former workforce. To relieve taxpayers of their current sole responsibility for risks in the federal plans, the authors recommend Ottawa switch to a different type of pension plan with benefits based not only on salary and years of service but also on the plans’ funded status.

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GIVING BACK AFTER YOU’RE GONE If you are bequeathing to a charity in your will, you should begin a series of conversations, starting with your family


H With proper planning a taxpayer may eliminate taxes at death by giving instead to charity. In most cases, this will have little or no impact on their family or loved ones

aving a conversation with fa m i ly about what happens after we die can be u ncom for table. However, it’s important to have these conversations because talking to your beneficiaries is an important aspect of ma nag i ng you r estate. If you have included charities in your will, you may want to also include the following people in the conversation. In my role as a charitable gift planner, I often speak with family members who are surprised to learn that their loved one has named a charity in their will. Sometimes they had no idea their family member supported a particular charity – or, in

some cases, many charities. And when I speak to them about their family member’s giving history, and sometimes of their volunteer roles, they’re genuinely surprised. No matter what your reason is for leaving a charitable gift in your will, talking about your wishes with your loved ones is really important. Not only does it provide them with a better understanding of the decisions you have made, it also helps them to later honour these decisions and respect your choices. It’s not just important to talk to your family and loved ones about your philanthropy; it’s also important to talk to your professional advisers.

TAX INCENTIVES  Q Canada has some of the best tax incentives for philanthropic giving in the world. As of 2016, due to federal tax increases, top marginal tax rates in half of the provinces are now greater than 50 per cent. In British Columbia this rate is 47.7 per cent, according to Malcolm Burrows, philanthropic adviser and founder of the Aqueduct Foundation. The math is simple: a higher tax rate produces a larger tax credit. And, although this may not be your main reason for giving, it is very important to understand how tax credits work, and how you can maximize the amount you can give while also minimizing your taxes.

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For example, when you leave a gift in your will, the contribution limit is higher upon your death. Since the 2016 changes, there is now a category of charitable gifts called “estate donations” – these include gifts by will, life insurance policies, registered retirement savings plans and registered investment funds. Initially, estate donations can be claimed against up to 100 per cent of net income in the final two years of one’s life, and against up to 75 per cent of income over five years of estate returns. In effect, with proper planning – and depending on the province in which you reside – a taxpayer may eliminate taxes at death by giving instead to charity. In most cases, this will have little or no impact on their family or loved ones. This is just one example of why it’s important to speak with your professional advisers about your philanthropy. They can help you plan your giving in a way that benefits everybody involved: you, your loved ones and the charities or communities you care about. CHARITIES  Q Speaking of the charity or charities you care about: if you have chosen to leave them a gift in your will, please let them know. Why tell them about your deferred gift? You want to ensure the legal name of the charity is correct. You may want to designate the proceeds to a certain program or have it be endowed, and you should have discussions with the charity on how long it intends to offer that program. What are its endowment policies? How would you like the gift to be recognized? Remember this

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is a deferred gift, so it could be many years before the charity receives it and its programs or areas of focus could change. There may also be some opportunities for you to volunteer, provide mentorship or stay connected to your community. And what better way to do so than through the charity you are already supporting? Lastly, but most importantly for the charity, a gift that comes in the form of a deferred gift is the ultimate act of giving: you thought enough about the charity to leave it a gift in your will. Speaking on behalf of charities, it is like being part of the family and we really want to be able to thank you while you’re still living. We want you to continue feeling connected to our causes, even if retirement means that you can no longer give as much or at all on an annual basis. We’re so lucky to live in one of t he b est cou nt r ies i n t he world. But the reality is that it’s not equal and it’s not perfect. Through charitable gift planning we can make our country and our communities better for everyone – by sharing and showing a little bit of our local love as the legacy we choose to leave.É Michelle Bernard is manager of philanthropy at United Way of the Lower Mainland. She has worked as a charitable gift planner for more than 15 years in the non-profit sector. Prior to that she worked in the financial sector. She can be contacted through the United Way at uwlm.ca.

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Stay-home seniors skew outlook


tubborn seniors are skewing the outlook for the retirement residences market in Canada by opting to stay in their own homes when they retire. But a close look at seniors’ debt levels and retirement home rents suggests some may be staying in place because they can’t afford to move. A survey done for HomeEquity Bank by Ipsos found that 93 per cent of Canadian homeowners aged 65 or better say they want to live in their current homes in their retirement years. The June 2018 survey found that 69 per cent of senior homeowners in Canada wish to maintain a sense of independence. Meanwhile, 51 per cent say that they want to stay close to family, friends, or their communities, and 40 per cent pointed to emotional attachments

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and memories as their motivation for staying in their own home. Altus Group found that homeowners aged 65 or older account for 25 per cent of all renovation spending in Canada where home equity lines of credit were used, while another 38 per cent of such spending was made by those aged 50 to 64 years old. Separate studies suggest, however, that financial headwinds and a shortage of space in retirement homes may be keeping seniors from moving. Equifax Canada, in an online survey last August by Ipsos, found that Canadians aged 65 and over are the key drivers of the country’s mortgage debt, accounting for 91 per cent of the total balance over the past five years. Meanwhile, rents in B.C. retirement homes are rising, according to Canada Mortgage and Housing


Corp.’s (CMHC) Seniors’ Housing Report 2018. The average monthly rent in the Lower Mainland for “heavy care” retirement homes, where medical supervision is provided, is now $7,419, up from $6,852 in 2017, CMHC reports, and this spikes to

an average of $8,808 per month in the city of Vancouver. For non-heavy care senior housing in Vancouver, the monthly costs range from $1,900 to $2,899 per month, but the rental vacancy rate is 0.6 per cent, CMHC reports, down from 0.9 per cent in 2017.

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Life’s better here


Call or visit us online to book a tour.


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I give to my community and with Vancouver Foundation, my giving lasts forever. 75 years ago, a single gift started Vancouver Foundation and that gift is still making a difference in the community today. We can help you create a fund that gives forever. Get started at vancouverfoundation.ca/create or call Kristin at 604.629.5186


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Profile for Business in Vancouver Media Group

Retirement Ready 2019  

Retirement Ready 2019