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Jon Chevreau at MoneySense

Apologies for a hiatus blogging here but the new position as editor of MoneySense magazine has not permitted a lot of blogging. Since joining five weeks ago, we have put out the June issue of the magazine, now available on newsstands and the iPad.

I’m happy to report that I will soon be blogging at MoneySense.ca, though it’s unlikely the frequency will be anything like the old Wealthy Boomer blog housed at the Financial Post.

The new blog will likely be titled simply Financial Independence, which is of course the ongoing theme of this site here at FindependenceDay.com. One of the things I’ll be doing on the blog is reviewing any books that touch on this theme: publishers and book publicists take note! My email at the magazine is jon.chevreau@moneysense.rogers.com.

By the way, the first piece I’ve written for the print edition of the magazine (June issue on news stands now) is the Editor’s Note at the front. There I note what this site often sets out: the difference between “Retirement” and “Financial Independence.” It also introduces a new writer to the magazine: Preet Banerjee and announces acting editor Dan Bortolotti is now our Editor at Large. Dan’s cover story on “Renovate your portfolio” presents three low-cost ETF portfolios of the “Couch Potato” genre he and the magazine are famous for.

Change a life for 20 bucks

MoneySense publishes seven issues a year and costs about $20 a year to subscribe, or less if you’re a Rogers customer. I’d say that’s pretty good value. Click here for details on how to subscribe or better yet, provide a gift subscription to a loved one. (Change someone’s life for 20 bucks!)

In addition to the new blog, I continue to “tweet” (@JonChevreau) and Moneysense.ca will also start scrolling my Twitter feed and other feeds associated with the magazine.

Lots of other stuff to come!

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Tony Coletta

In recent weeks, I’ve been in touch with an old college friend who originally hailed from Italy and ultimately returned there to raise a family. Perhaps I had him in mind unconsciously when I created the “Jamie” character in Findependence Day, although of course as with most works of fiction, characters tend to be composites of real people and an author’s vivid imagination.

Either way, I was surprised not only to hear from Tony Coletta — aka “the real Jamie” or at least the inspiration for the character — but also to discover he had ordered the book, subscribed to MoneySense Magazine, and that he has already reached his own personal Findependence Day.

Tony sent me an email describing how his post-Findependence Day has transpired very much like that of his fictional counterpart in the novel. He also gave me permission to publish his description here and to run a photo of him.

So thanks, Tony, for sharing:

My Findependence is coming along just like you describe it in the book. In other words I keep doing exactly the same things as before but with a different attitude.

If I don’t get any work for a week, a month and sometimes even a couple of months, I don’t worry about it. I spend my time with the family or simply studying, exploring new ideas, preparing presentations and papers for conferences etc..

I take long vacations, usually all of July and August and go often to the beach.

Best regards

Tony

Vito Antonio (Tony) Coletta

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As expected, the Old Age Security eligibility age will rise gradually from the current 65 to 67 but this doesn’t start to happen until 2023, according to the just-released budget.  When you add the 11-year notification of this change to the six-year phase-in between 2023 and 2029, I’d agree with Finance Minister Jim Flaherty that Canadians [or their financial planners] have “ample time to make adjustments to their retirement plans.”

For younger people born on or after Feb. 1, 1962, OAS eligibility will be age 67. Technically, boomers were born between 1946 and 1964 but in my view, if you were born between 1962 and 1964, you likely didn’t grieve over the JFK assassination and can hardly be considered a true baby boomer.

Delaying retirement: OAS takes a leaf from deferred CPP benefits

Most interesting is the fact the OAS program is being tweaked to reward those wishing to delay retirement, somewhat like the Canada Pension Plan pays better the longer you delay receiving benefits. Canadians can voluntarily defer receiving OAS payments for up to five years, beginning on July 1, 2013. So, for example, if you delayed receiving OAS until 66 rather than 65, the payout would be $6,948 rather than $6,481.

Coupled with delaying CPP, it’s clear many workers with marginal incomes will have two strong incentives to keep working right up to age 70. Apart from the higher CPP and OAS payouts, investment portfolios will have that much more time to grow: including Tax Free Savings Accounts (TFSAs). And as any financial planner can tell you, five extra years of working and saving also means five fewer years of spending down a portfolio.

Seniors will now be enrolled automatically into the OAS and GIS (Guaranteed Income Supplement) programs rather than leaving it up to citizens to apply. Previously, many seniors missed out on benefits because they failed to apply and even once they learned they had to apply, were shortchanged because of limited retroactivity. Credit the NDP for making this suggestion earlier this month.

The poorest seniors already got a raise of sorts when the government boosted GIS payments as of last July. More affluent senior couples already benefit from pension income splitting, a fact that will become apparent when they file their annual taxes before the end of April.

For seniors who delay OAS/CPP, TFSAs will be a boon

To the extent this is an austerity budget designed to slay the federal deficit, it will hasten the day when previous promises kick in and the nation’s books are balanced. Budget 2012 aims to do that by 2015-2016. If that happens, then TFSA contribution limits will double to $10,000 from the current $5,000. The TFSA will be a real boon to lower-income seniors because it won’t trigger OAS clawbacks or various means-tested benefits. Those who delay receiving CPP/OAS until 70 will be able to build up much larger TFSAs that will ultimately spin off tax-free income: the potential exists to contribute an extra $50,000 if the deficit is eliminated and they contribute $10,000 a year from 2016 to 2021.

The Tories have also previously promised that once the books are balanced they will introduce income splitting for families with children under the age of 18. While Ottawa has so far opted for Pooled Registered Pension Plans (PRPPs) over an expanded CPP, the country’s baby boomers now have most of the necessary tools to build financial independence.

It’s still important to save and invest but boomers who had a late start have a reprieve if they choose to stay in the workforce until their late sixties or 70. Meanwhile, those who have long planned for an earlier exit from the workforce can stick with their previous plans — OAS eligibility at 67 is hardly the bogeyman some feared.

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Here’s an excerpt from the review:

The book is a great response to these challenging times and helps us to understand that there are few challenges that we cannot logically plan our way through …. The book necessarily spends a lot of time teaching some important financial lessons, but it ends up giving us a vision of what a life well-planned can look like.

Vetter is a CFP and Chartered Life Underwriter with WealthSmart Financial Group.

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One of them was highlighted today as the last installment of The Wealthy Boomer blog, here.

The other is here.  It’s not yet clear what the fate of the blog will be. It won’t continue as presently constituted as a micro site at the FinancialPost.com [at least not written by me] but it may be reincarnated at some point on another platform.

Some readers have asked whether the column in the paper will continue. Not with any frequency: it was a full-time job producing those columns and blogs and I’ve now taken on a new full-time job, effective April 9th: as the editor of MoneySense magazine.

It’s possible that I’ll do an occasional (perhaps monthly) column for the Post once I make the transition but for now we’ll just have to see.

Oh … about the photo in the farewell blog. It was taken earlier this month at the National Post. If it seems a bit “leaner and meaner” than previous head-shots, that’s because last Halloween my wife and I embarked on a two-pronged regime of The 17-Day Diet and regular exercise. The result is The Wealthy Boomer is also the Lighter Boomer, by about 25 pounds.

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At this stage, it’s not clear how or whether the Wealthy Boomer blog will continue. If it does, it probably won’t be in the current form but in the meantime I may blog a little more on my own site here, which of course exists chiefly to market the book, Findependence Day, and to discuss the philosophy surrounding it.

It’s my belief the financial sections of most newspapers, financial blogs, financial TV shows and personal finance magazines are all talking about basically the same thing: some may term it retirement but I prefer to view it as financial independence. Those who have read the book know the distinction that is made between the two terms throughout the book.

In short, as discussed on the Youngandthrifty review flagged here in the previous blog, it’s all about building wealth to the point you are working because you WANT to, not because you perceive you HAVE to.

Such a late-career change happening while I’m on the cusp of reaching my own personal Findependence Day [I'll be 59 by the time I start the new job] raises some interesting nuances on the whole philosophy,  which I’m exploring in an essay I’m composing and which ultimately will be the basis for another book. If it’s ready later this weekend, I may post it here.

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Click here for the review and a chance to win a copy.

Note that I’ve raised my age for my own personal “Findependence Day” up three years to age 64. Details to follow on the weekend.

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Click here to view.

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Speaking of Findependence Day, I’ve decided to raise my own personal FD from the previous age 62 to age 64. I’ll explain why in another blog but it has nothing to do with the government’s trial balloon to raise the OAS eligibility age gradually from 65 to 67.

Speaking of government, today it was announced that the federal budget will come down March 29th.

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