Your Personal Finances

Family Issues

According to a recent Sun Life Financial Survey people in their 60s, 70s and 80s who are active in their retirement, are spending more money than they had expected.

In fact, 36% of 60-69 year olds respondents of the survey thought that their expenses were higher than predicted. Just over half of the 70-79 year olds had higher than anticipated expenses while two thirds of 80-89 year olds had higher than expected expenses. It may be little late to consider saving for retirement earlier, or increasing savings, but there are ways to cut costs while continuing to enjoy their active retirement.

1. Income splitting. The federal government now allows couples to split eligible pension income. This is very helpful in saving taxes if one spouse has a higher pension income compared to the other. The tax hit will be leveled out at a lower level overall.
2. Take advantage of seniors' rates. Everything from drug stores to movie theatres to clothing stores offer senior discount rates. Just because you might not want to look like a senior (or admit that you are one) doesn't mean you can't benefit from these discounted prices.
3. Contribute to RRSPs until you are 71. You can now continue to contribute to a tax advantaged Registered Retirement Savings Plan until you are 71. If you have the extra cash, an RRSP contribution can generate a nice tax refund.
4. Cut costs. There are lots of websites loaded with terrific tips and tools to help you cut costs. Here are a couple: www.save.ca, www.redflagdeals.com.

Be sure to consult with your financial advisor to ensure he or she has set up your retirement income stream as efficiently as possible. You want to try to avoid claw backs of government benefits and losing age credits if possible.