There are many things people who are about to enter their senior years should get in order when it comes to their finances.
Lory Rochon is a literary outreach coordinator with the Cariboo-Chilcotin Partners for Literacy Society who helps educate people about a wide variety of issues involving governmental bureaucracy, often working directly with seniors. As a result, she has first-hand knowledge of what people should do to prepare for their golden years.
First, Rochon says that people should start looking at preparing for seniorhood right after they turn 60.
"There are some things that you can move around, which will help you with your taxes after 65 such as RRSPs - if you only have little RSPs, it might be better to pay the tax on them and stick them into your Tax-Free Savings account, lock them into a GIC (guaranteed income certificate)," Rochon explained. "If you cash in those things like RRSPs after you are 65 if you're already collecting the guaranteed income supplement, you will actually increase your income and lose it dollar for dollar in your supplement."
In addition, Rochon also said that people planning for their senior future should know where their income is going to come from and when they need to apply.
"Typical rule of thumb is, as soon as you're 64, apply for your pensions - for your Canadian Pension and your old age pensions," Rochon stated. She also encourages people to look at their savings, investments and RSPs, as well as private pensions from potentially 40 years ago from whatever companies people may have worked for.
"Start looking into where those companies are, because you have to apply for each of those individually as well," Rochon added.
She also recommends that those about to turn 65 get rid of whatever outstanding debt they might have.
"It's very much like budgeting. It's really recommended to get rid of as much consumer debt as you can possibly get rid of before you turn 65 because once you're a pensioner, you have a limited income to be able to make those bills if it's at all possible."
In addition, she says that people should be filing their taxes and making sure that their information with both Service Canada and Revenue Canada is current and up to date.
"Most people don't do this, but technically, every time you move, you're supposed to update your addresses, because they don't automatically change them from what you've written on your tax forms or whatever, you have to actually put the address change in," Rochon said.
The same goes with names: people who get married and change their names have to make sure they change it with the government.
"When you try to collect your pensions, if your married name does not match your birth name from when you applied for social insurance, you'll first have to correct that information before you'll be allowed to collect your pensions," Rochon remarked.
In addition, Rochon encourages people to have a will and to explore advanced care planning.
"Advanced care planning can come in a couple of different stages. You can assign somebody to deal with your day-to-day affairs, like paying household bills in case you're incapacitated - the second level you can do is have somebody look after the bigger stuff and make some decisions," Rochon listed. "The third is power of attorney, which would include things like property and bank account changes."
For more details on this process, she recommends people read the book When I'm 64 and the Advanced Care Planning Booklet, which is available for free on the Canadian federal government website.
She also advises that seniors should have a lot saved up because there will likely be unexpected car replacements or home repairs. Right now the Canadian Pension Plan base is around $1,800 for a single person a month.
Finally, Rochon said seniors should be prepared for what happens if they lose their spouse.
"That can have some pretty quick repercussions and as well as losing your partner is bad enough - the funeral homes and other agencies are really good about helping you get all the paperwork in that needs to be done," Rochon explained, stating that income will change so plans have to adapt.
Rochon said she is willing to help seniors navigate their pensions and budgeting through her work with the CCPL. She noted the program is 100 per cent confidential and encourages seniors not to be embarrassed to talk about money. She can be reached at lory@caribooliteracy.com or 250-395-0655.
In addition, there is an opportunity for seniors to get their tax filings completed and done later this winter.
The Interlakes Tax Services are planning on running four tax clinics: one on Feb. 26 at the Creekside Seniors Centre from 9 a.m. to 11 a.m. (drop-in) and 11 a.m. to 3 p.m. (by appointment), Mar. 10 at the 108 Community Hall between 9 a.m. to 11 a.m. (drop-in) and 11 a.m. to 3 p.m. (by appointment), Mar. 19 at their offices at 7528 Thomas Point Road by appointment only, and Mar. 26 at the Creekside Seniors Centre between 9 a.m. and 11 a.m. (drop-in) and 11 a.m. to 3 p.m. (by appointment).
"This is something I can give back to the community for people that don't have very much money and are struggling to live." Carla Fraser, the owner of Interlakes Tax Services, says. "They can continue to get their benefits from CRA and their guranteed income supplement without having to pay a tax service or somebody else $150."
Fraser has added that if someone has a $6,000 per year income, and they have to pay $150 to get their taxes done, they will not be able to eat that month.
"When I was doing this home service, when I was going to get their information from them and seeing just how they live, which is pretty sparse - it's tough for them to come up with the 150 bucks to pay somebody to do something that is very quick and easy," Fraser added, citing her past experience when she drove to seniors houses to get their tax information.
She previously worked with the CRA for around 37 years, which had a volunteer tax preparation system for low-income seniors, Fraser said she tried to expand it to 100 Mile House, but was never able to.
Those eligible must be 55 years or older, have an income of under $35,000 for single and $45,000 for couples, do not have employment, rental or self-employed income, have no capital gains or foreign income, have no investment income over $1,000 and cannot be bankrupt. In addition, copies of tax returns will be provided electronically to the e-mail addresses of those who utilize the clinic. Those who would like a paper copy of the return will have to pay five dollars for each copy, while those who would like their return mailed back to them need to pay five dollars for a postage charge.
Those interested can call Fraser at 604-218-4103 or e-mail at interlakestaxservices@gmail.com.
With files from Patrick Davies.
