Budgeting in retirement is crucial, especially when you live on a fixed income. It doesn't matter if you retire early or you have a late retirement. With careful retirement planning, you make your nest egg last as long as you need it to.
In this article, we discuss how to stretch your retirement savings in order to make them last longer. We cover budgeting strategies and how to make your money work for you.
Making a budget is an important step to ensure your retirement savings last. In short, when you have a budget and spending plan, you can better track and assess the things you need to pay for in life.
With that said, before we delve into more specific money saving tips, let’s explore how to set up your budget in the first place!
The first step to take when budgeting for retirement is to estimate your retirement income. This includes all sources of income, such as pensions, government benefits, and investments. Once you know how much income you'll have each month, you can start making a budget.
There's no one-size-fits-all answer to this question. The amount you need each month depends on factors like your lifestyle, health, tax-costs, and where you live. However, as a general rule of thumb, you can expect to need about 70% of your pre-retirement income.
Once you have an estimate for your retirement income, you can estimate your retirement expenses.
You'll need to account for out-of-pocket costs like housing, food, health care, tax payments, as well as investment or transportation expenses. Remember to include leisure and entertainment expenses. And, of course, you'll need to account for unexpected expenses.
The biggest expense in retirement is often housing. This includes costs like mortgage or rent payments, property taxes, and maintenance. Other significant expenses include food, transportation, and health care.
The monthly cost of health insurance premiums often increase in retirement. This is because you'll likely need to spend more of your income on health care than young people. Knowing your family health history is one of the best ways to guess what you might need to pay down the road.
Another common expense that increases in retirement is travel. So long as you have the income, spending time in new places around the world is great personal care, as it helps you feel more fulfilled in life.
There are a few expenses that tend to decrease during retirement. One is work-related expenses, such as commuting costs, business attire, and income tax. Another is child and family care related expenses, such as education, or your child's wedding.
If you're on a small budget, there are a few things you can do to reduce your monthly expenses and extend your retirement savings.
Here are some tips on how to budget your retirement savings:
You'll want to take a close look at your expenses and make changes where necessary. This may include cutting back on non-essential expenses, such as dining out or travel. It's also important to make sure you are not overspending on housing costs.
In short, you'll want to ask yourself, "Does this help me achieve my financial goals?" If the answer is no, it may not be necessary.
One of the best ways to make your retirement savings last longer is to live below your means. This means spending less than you earn from your pension and saving the difference. When you live frugally, you have more money to live your best possible retirement life.
For seniors who've fully paid their mortgage, downsizing to a smaller dwelling can save a lot of money on things like property taxes, utilities, and maintenance. Since you don't need to go to work, try relocating to a walkable or bikeable neighbourhood. You won't have car payments, and you'll get exercise while meeting people in your community.
Final expense life insurance can help your loved ones cover the cost of final expenses, like your funeral and outstanding medical bills. It is a really good idea to get one of these personal insurance plans, especially if you have debt in your retirement years.
That's because these plans ensure your spouse and family won't inherit your debt (or its rising interest rates) in order to pay for your final expenses. Your benefits could even be used to make charitable donations on your behalf!
At the end of the day, life insurance gives your future the certainty needed to fully enjoy retirement life.
Pensions don't always pay us what we need for spending cash. Here are some ways you can increase the cash you have to spend on what's important to you in life.
With all of the extra time you might have, starting a small business can be a great way to generate income. However, keep in mind new businesses mean new expenses, and new expenses will affect your income and savings. The last thing you'd want is to spend all of the nest eggs saved in your retirement accounts!
That's why another way to bring in some extra cash is to get a part-time job, whether it’s working in a retail setting, food service, or even part-time for your old employer (That is, if they were a good employer!).
Everyone can save money by using coupons and being strategic about where they shop, but this is especially important for retirees who are living on a fixed-income.
Plus, there are often a lot of free or low-cost services and activities available to Canadian seniors, so take advantage of them!
Clubs and groups for seniors often offer discounted rates on things like travel, education, and recreation, so this is a great way to save cash while also meeting people in your community.
Find out if your community has senior gym memberships. Not only do gym memberships help you meet people, but staying active is a great way to reduce health care expenses down the road.
Instead of going out and spending too much of your budget on entertainment, stay home and find ways to have fun for free or very cheap. For example, try calling up some old friends to have a karaoke night.
Another example, reduce your monthly expenses by switching from cable to streaming services.
If you have extra space in their home, you may want to consider taking in a lodger or renting out a room. This can help offset some of the costs of living alone while providing you with a bit of company.
Plus, investing in your home by building a secondary dwelling can significantly raise the total amount of your home's value!
Creating a retirement budget is an important process that will help you make the most of your golden years. By estimating your retirement income and expenses, you can develop a plan that will allow you to enjoy your retirement and stretch your savings.
Creating a budget plan for when you retire helps your life savings last as long into the future as possible. A final expense plan helps you account for the unexpected costs in retirement. That way, you can make your savings last worry-free.
One of our professional advisors is waiting and ready to help you get the insurance coverage you need today!
The average funeral cost differs across Canada. However, just like with the rising cost of living, the cost of dying is also going up for Canadians.
In this article, we explore what multiple Canadian funeral directors and other key people in the death-care industry say you can expect to pay for a funeral in Canada in 2022. That way, you can be better prepared to start making arrangements.
The cost of a funeral is indeed going up for Canadians. In 2021 the National Funeral Directors Association held a study that found the median cost of an adult funeral with viewing and burial went up by 6.6% since 2016.
Although those numbers are for services in the US, Canadians are not immune to the price hike either.
There are many things to consider when making funeral arrangements. But the first thing to figure out is whether you want a traditional burial, or cremation.
Cremation is far more affordable than a traditional burial, that's probably why more and more Canadians are choosing to be cremated.
There are several reasons for cremation being cheaper, but the two biggest reasons are because you don't need to pay for a casket nor burial plot. Moreover, with an urn, you don't need to pay for a hearse to do the transportation. Any vehicle will work, and it can be handled by a loved one.
However, there are still many other funeral expenses outside of choosing between an urn or casket.
With a traditional burial, you'll pay for the casket, but you'll also pay for transportation. If you decide on an open casket, you'll also need to hire a makeup artist. Finally, you'll pay for the cost to bury, as well as the headstone. Some cemeteries will also ask you to reinforce the burial site.
The cost of a casket will be more or less depending on the material you choose. For example, a metal casket costs much more than a wooden one.
Though not essential, most funeral homes require this to be done in order to have a viewing.
When you go with an open casket, the funeral director has to use a special type of makeup. This makeup is pricier than regular makeup, since it needs to be formulated to apply to skin without body heat.
The cost of a hearse will be more or less depending on the price of gas. Also consider you might need to arrange transportation for guest between the funeral home and burial plot.
The funeral home needs to reserve a place to keep the body secure until the viewing or burial services. Moreover, the funeral home may have other overhead expenses that you'll need to cover.
The price of your gravestone will also vary by its material, as well as the length of the inscription.
If it's the winter, expect to pay a little more for the burial. You might even have to pay to store the remains until spring.
The average cost of a cremation in Canada is far lower than traditional burials. But keep in mind, you'll still need to pay for the memorial service regardless to the end-of-life option you choose.
This is the casket that holds the body as the ashes are created. It can't be a regular casket, as it can't contain any metal.
Like a traditional casket, an urn will range in price depending on the materials used.
You will need to register the death and get a death certificate in order to claim insurance and settle the estate.
If you plan on having a celebration of life or other memorial service, you'll need to rent an event space for guests.
In addition to renting a space, you'll need to hire staff such as caterers or custodians.
There's a lot more to getting flowers than just buying the flowers. Each bouquet will need to be supplied and arranged by a professional.
Food is an important thing to remember when planning an event for many guests. You'll need to pay for the food to be made, but also for it to be transported to the service, as well as its clean-up.
This includes the guest book, and any other booklets or printed material needed for the memorial service.
You might need to pay additional costs in order to have the obituary published in the newspaper. This varies by the paper.
Although the total price you pay varies depending on whether you go with a burial or cremation, it can also vary by province. Here's the median cost for a funeral per province:
Yes, the funeral or memorial service will be expensive. Moreover, with rising inflation, funeral expenses are rising also. With that said, there are still some ways you can cover funeral costs so they are less of a burden on your loved ones:
By keeping the guest list to only close family members, you can hold the celebration of life or memorial services at your home or local church.
Although you may have to pay a small fee when you reserve seats at a restaurant for large parties, it will not be anywhere close to the fees paid to rent an event hall or funeral home.
Food for your guests is important. With that said, you might be able to get away with having the guests bring dishes potluck-style.
The cremation fee will always be less than the equivalent burial costs. At the end of the day, it is quite cumbersome to transport and secure a deceased person. Cremated remains enable a lot more flexibility when it comes to transportation.
When funeral planning, shop around! Call various funeral homes in your area to get a sense of their service fees. Then you can make a more informed decision when you start making your arrangements.
We'll touch on this more in the next section, but being prepared ahead of time will dramatically reduce your overhead when the time comes for the funeral ceremony.
Although you might know some of these funeral costs, you might be like most Canadians who aren't aware of the total scope of funeral expenses. However at the end of the day, the average funeral costs about the same (if not more) than the average wedding.
That means, ironic as it may sound, a funeral service may be one of the most expensive things you pay for in life!
Also keep in mind, if your family members are left to cover the cost of a funeral, they will likely not be doing so with a lump sum payment. Instead they'd have to take out a loan, which, given rising interest rates, is costlier than ever.
To save this financial burden from hanging over your family, consider getting Final Expense Insurance.
Final Expense insurance pays your loved ones a death benefit to cover funeral costs and other end of life expenses. That means for a modest fee each month, you ensure you don't leave your family with debt, but rather have the fullest celebration of life you deserve.
When you eat at a restaurant with your family, your won't walk out and leave them with the bill. So why would you saddle your loved ones with your funeral bill?
By opening up an insurance plan to cover your final arrangements, you eliminate leaving your family members with your debt.
Unlike with other life insurance companies, going with Specialty Life means you never undergo a medical exam nor will you be required to get a doctor report. If you're between 18 and 74 and have a Canadian residence, your application cannot be denied for any reason.
Get a quote now from our helpful team to find out how much you can be saving on your policy!pay
Nobody likes to think about lying on their deathbed. But not thinking about it will not make life last forever. In fact, avoiding it can often lead to messy scenarios, where the family is left without guidance on how to organize the next steps - or, in other words, without a will.
We know this is not a pleasant topic. But have you thought about who will inherit your home after you pass away? Who will take care of your pension funds? Or who will be the guardian of your precious stamp collection?
According to a survey, half of Canadians (50 percent) do not have a will, and 39 percent have not discussed estate planning wishes with their family members. It is undeniably a very unpleasant matter to discuss. But not doing so can cause immense emotional turmoil for the family and even unnecessary animosities.
Whether you are in your 40s or 80s, setting up your last will is something you should be considering, especially if you hold many assets. Estate planning is an essential step in making sure that your things will be managed according to your wishes and that no one can interfere with your instructions.
Conflict over inheritance is very common, especially if there is a business involved or valuable personal property, such as houses or valuable collectibles. Therefore, having a will that clarifies what should happen to your money, possessions and investments, is the easiest and fastest way to guarantee that everything is rightfully handled. Besides, you surely don't want a judge deciding your estate's fate.
Before diving further into the matter, let us assess the first big question: what exactly is considered a will in Canada? As explained in the Government of Canada’s official website, “a will in Canada is a legal document that says how you want your estate to be divided once you die. Your estate includes what you own (called assets) and what you owe (called liabilities).”
There are two kinds of wills in Canada: a formal will and a holographic will. A holographic will is the classic do-it-yourself will, all handwritten. This type of will does not need to be witnessed or notarized, which often leads to validation issues. Besides, some provinces and territories (like British Columbia or Nunavut) do not recognize it as a legal document.
A formal will is typewritten. To be valid, it must be signed by the person making the will in front of two witnesses. It is advisable to have a lawyer preparing it, to make sure it complies with the provincial and territorial laws.
If you live in Quebec, you can also opt for a notarial will. In short, it is prepared by a notary and signed before him and a witness.
Leaving a will is one of the most important things you can do for yourself and your family. However, it is just as essential to guarantee that the will is valid in Canada and executed according to your provincial laws. These are the basic rules it should follow:
In Canada, online wills and will kits are legal everywhere except in Quebec. These kits offer affordable estate planning, making the whole experience seemingly simpler and faster. However, there are some drawbacks you should be aware of. For example, these online tools are not designed to accommodate anything non-standard. On top of that, some providers do not give enough advice on how to correctly complete the document, which can make it confusing for some people.
In short, an online will kit isn’t for everyone, which is why it is recommendable that you assess your situation before choosing this method. Especially if you have an atypical living and family situation (such as a blended family or shares of private corporations), nothing can substitute professional advice.
Estate planning often falls to the bottom of people's priority list, especially when they are still young and healthy. But it is important to remember that wills are not just for those who are getting older.
If you die without one, the law states that you have died intestate, which means you left no instructions on how to distribute your property. In these circumstances, the government will do the honours and distribute your estate to your surviving relatives, according to your provincial or territorial law.
If you want to avoid that (and all the conflicts, delays, and expenses it generally involves), you should start writing your will as soon as possible, regardless of your age.
Although there are many triggering events that signal to an individual that it could be time to organize their estate (like a severe disease or advanced age), there is no such thing as an"official" moment to prepare it. In Canada, a will is, after all, a simple way of being prepared for life’s unpredictability.
If you have a significant estate and want it to be distributed according to your intentions, there is no better time than now to start preparing this irreplaceable document.
Depending on your personal and financial circumstances, there are many factors to consider when making a will. However, these are the main steps you should follow to handle it the right way:
First, draw up a list of all your property: real estate, retirement plans, investments, vehicles, jewelry, etc. But keep this in mind: before giving assets away, you must make sure you actually own them. For instance, if you have joint assets with other people (such as a house or a business), they will have a right of survivorship over them.
While making this list, make sure to include the contents of safe deposit boxes, family heirlooms, and other assets that you wish to transfer. Finally, don’t forget to organize and list your key documents, such as deeds and mortgages, insurance policy numbers, or investment portfolio account numbers.
The person you choose to manage your estate is an executor. This person is responsible for managing how your estate will be distributed and ensuring the directions you left in your will are followed. For this purpose, you can choose a person who is close to you (such as a family member or friend) or a financial professional.
It is recommendable to appoint a primary executor and an alternate executor because your primary executor may die before you. As an alternative, you can also appoint several executors (co-executors) to handle the task together. As an important note, you should remember to ask your chosen executor(s) whether they are willing to take on the role.
We are all familiar with the chaos – and even legal battles – that heirs frequently go through when a loved one passes away. To avoid these delicate situations, you should discuss your estate plan with your heirs while still alive. However hard or uncomfortable the discussion may be, it is essential to ensure that everyone is aware of your last wishes.
Although it’s typical to leave the inheritance to the family, you can also give a specific property (such as a collection or piece of jewelry) or sum of money to a particular named beneficiary or charity.
Finally, if you have minor children, you should also name the custodian(s) in your will. This figure will be responsible for your children's physical custody if you and your spouse pass away. Often, the custodian is the same person as the guardian (the person that manages the assets of the minor).
A will does not have to be notarized to be legally valid. It is valid if signed correctly in the presence of witnesses. However, we strongly recommend you get professional legal help when you decide to make a will. This will help you make sure all your documents are prepared and witnessed properly. Especially if you have complicated personal scenarios (like dual citizenship or children with different partners), the right guidance through the process is even more critical.
Consulting a lawyer could cost from $200 to $2,000, depending on the complexity of your will. Although it is significantly more expensive than the online process, it is the best way to ensure that your will meets all the formal requirements.
As a rule, you should review your will every three to five years to ensure that it reflects any significant changes in your circumstances. When reviewing the will, you should consider several meaningful life events such as a divorce, a marriage, children's birth, the death of a beneficiary, or even a new business. Besides, you should also review your will if you or your executor move out of the province or country. Given that each province and territory in Canada has different laws governing estate succession, you should even consider re-drafting your will in the new jurisdiction.
Once again, here is something no one likes to think about: final needs. However, this is an essential aspect to consider, especially if you want to spare or loved ones from stress and emotional burden.
While the bulk of your assets are distributed on your will, there will be many financial obligations left out in the world. To spare your loved ones from the task, you might want to prepare (and prepay) for your funeral and memorial service. Taking care of these final arrangements can save your family and friends from making tough decisions in a time of grief.
This could also be an excellent occasion to make equally important decisions, such as making a Financial Power of Attorney (a legal document that allows the person you name to make decisions for you even if you become mentally incapable) and deciding whether you want any type of medical orders (like a Do Not Resuscitate order).
At Speciality Life Insurance, we are experts in making insurance easy, affordable, and customized to everyone’s needs. With that in mind, we created a Final Expense plan designed to help you take care of your loved ones, even if you are no longer around.
This policy aims to protect your family from having to deal with financial distress upon your death. It is a type of whole life insurance that your beneficiary (or beneficiaries) can use to pay for your funeral, settle debts, or in however way they find useful. It’s up to them to decide how to use the benefit.
To apply for our plans, you don’t need to go through medical exams, face-to-face meetings, or endless paperwork. You only need to be a Canadian citizen aged 18 - 74, eager to protect your family’s financial future. Even if you have been denied life insurance in the past, that will not affect your eligibility with us.
Making a will communicates your wishes and instructions clearly to your family and loved ones, making it an irreplaceable document that you shouldn’t leave to chance.
Furthermore, if you are worried about leaving a financial burden to your loved ones, or if you simply want to leave them a more meaningful legacy, our Final Expense plan might be just what you need to complement your final obligations and wishes.
Don’t hesitate to contact our team of experts if you have any questions surrounding our plan or application process.