To some extent, seniors earning a steady income is a myth.
Canada Pension Plan retirement benefits are adjusted for inflation once a year, and Old Age Security payments are revised quarterly to reflect the higher cost of living. Many dividend stocks that many seniors own directly or through trusts increase their cash payments every year or so. Also, growth from owning stocks or stock funds removes inflation.
Older people who are fortunate to receive defined pensions may also enjoy some degree of protection against inflation, particularly those who have worked in government. DB Pensions pay cash monthly for life – you don’t have to worry about the kind of volatility we’re seeing in today’s financial markets.
However, the elderly are far from resistant to inflation. Retirees cannot take advantage of today’s tight job market to claim a raise or bonus, or find a better paying job. Without going back to work, they have no way of making the kind of jump in income that offsets today’s high inflation rate.
Seniors, tell me how you handle inflation by completing this anonymous survey. I will report soon on what the results tell us about facing inflation in retirement.
Subscribe to Carrick on Money
Are you reading this newsletter on the web or has someone forwarded the email version to you? If so, you can sign up for Carrick on Money here.
Rob’s Personal Finance Reading List
Top 10 investment terms people search online
Find out what your fellow investors are asking about. A mix of basic and more advanced topics that highlight how to attract investors to risky strategies with high flying stocks.
Feeling that inflation is cooked?
Try precooked roast chicken at your local grocery store. The CBC Radio Cost of Living program found it to be slightly cheaper than buying raw chicken at the same store.
Top 10 Mortgage Mistakes
Mortgage broker and real estate agent have compiled a list of mistakes people make when financing a home purchase.
Who invests in real estate? At least one out of every five MPs
At least 65 members of Parliament own real estate assets for rent or investment, according to information provided to the Federal Conflicts of Interest Commissioner. Investors buying homes and apartments is one of the reasons why home prices have gone up in the past two years.
Question and Answer
s: My husband and I got some bucks from the inheritance. We thought we would invest some in the US market, and later convert it to Canadian dollars when the exchange rate is more favorable. My question is whether it is worth it. Read about withholding taxes on stock dividends.
a: See this tax guide for information on the treatment of dividends from Canadian and US stocks in both registered and unregistered accounts.
Do you have a question for me? Send it my way. Sorry I can’t answer each one personally. Questions and answers are edited for length and clarity.
Today’s Financial Instrument
Twelve life insurance mistakes you should avoid. It contains errors that may result in exceptions – or unintended inclusions.
Money Free Zone
For fellow fans of Curtis Mayfield – an extended Mayfield mix of Japanese hip-hop artist and DJ Moro.
What I was writing about
More Rob Carrick and financial coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more financial stories, follow me on Instagram and TwitterJoin the discussion on my Facebook page. Millennial readers, join the Gen Y Money group on Facebook.
More coverage from Rob Carrick:
Do your parents give you money? • Why it’s time to stop shaming the rental lifestyle. • Is it now time to buy a home? • Why are young Canadians leaving the cities they love? • Eating: How the coronavirus has changed our spending on food. • Resist financial crises? • Can you live in the city center? • Children’s cost
Are you reading this newsletter on the web or has someone forwarded the email version to you? If so, you can sign up for Carrick on Money here.