Tag Archives: budget

FFFA! We (heart) weekends edition!

Hey, you made it to the end of another work week, congratulations!

And here at VCI, that means it’s time for another Friday Free-for-all!

This is our regular end of the week news round up and open topic discussion thread for the weekend.  Here are a few recent links to kick off the chat:

Wish I never downsized to a condo
Mortgage changes in 2014 budget
Wealthy moving to Vancouver
Ooops, maybe not
Every city is just like Vancouver
Consumer debt keeps swelling
25 cent Crack pipe vending machine
Next crisis not from emerging markets
Craigslist aids crackdown on illegal suites

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have a great weekend!

 

30% of retirees return to work to pay bills

ING has released the results of a survey they did showing that 3 out of 10 retired Canadians ended up having to return to work to pay bills.

Many retirees simply hadn’t saved enough or underestimated the cost of living.

The surveys portray a notable disconnect between Canadians’ expectations of life after the workforce and the reality of the cost.

ING Direct said that respondents wished they had found more ways to save for retirement, that they had started saving earlier and hadn’t “spent money so mindlessly.”

“The reality of retirement for many Canadians is a sobering reminder that you can’t put your financial future on the back burner,” ING Direct president and CEO Peter Aceto said in a release.

“Among the many other financial priorities we face during our prime working years, we need to make sure that retirement planning doesn’t get overlooked.”

So how are your retirement plans dear reader? Are you betting it all on a house in Vancouver?  Are you just starting out and saving and investing, or are you finding it difficult to put enough aside for your golden years?

Are the miserable more likely to rent or own?

There’s an article over in the Globe and Mail titled “The Rise of the Miserable Canadian Homeowner

They talk about some of the complaints people have over the cost of ownership and the recent inability for the Canadian consumer to live within their means.

But if homeowners are dissatisfied about how they’re managing their finances, we must also consider their single largest expense on month-by-month basis. That would be the mortgage payments they’re making on their homes.

The problem with housing is that it’s expensive compared to our incomes. I will document this further in an upcoming column, but for now let’s just say that mortgages plus other basic costs of day-to-day living, such as cars and daycare, may leave us with little money left over. And so we borrow more through credit lines and credit cards. That’s our unofficial second income.

The Manulife survey shows homeowners are not happy about how things are working out, which is noteworthy. We’ve been borrowing madly as a nation for the better part of five years now, and the story has so far been cast as one of imprudent behaviour. Here, we get a sense that there’s a cost in stress and angst.

Read the full article for a run down on the numbers of people happy vs unhappy with their household finances. Basically one in three homeowners are very unhappy with how they are managing their money.

 

Many boomers in retirement-denial

In shocking news, it would appear that many Canadian boomer savings levels are below what it would take for a comfortable retirement.

Way back in 2006, about 20% of the boomers that responded to a BMO survey said they were not confident they had enough savings to retire on.

Now?  That’s changed to 46% of boomers who say they don’t have enough to retire on.

Most boomers said they would like to retire at 59, but will need to work until 63.

The plan for many is to take a part time job or sell off belongings.

About 32 per cent expected to sell their home, while another 19 per cent said they will rent out part of their home for additional income.

To Buttigieg, boomers’ ability to save may have been affected by the challenges associated with paying off a mortgage, helping children through university and caring for elderly parents.

Inflation, low returns, living a long life and health issues call also spoil retirement plans, according to Mastracci, but he says one of the biggest problems continues to be debt loads.

“A lot of retirees still have debts (and) they have to clear the deck,” he said.

A recent report from Equifax says a growing number of seniors are taking on more debt to fund retirement lifestyles.

Hat-tip to Many Franks.

Living in a Van… couver

For the longest time the rallying cry ‘location, location, location’ was used by real estate salespeople everywhere.

Then marketers started to bore of that chant and realized they had to also sell property way out in the boonies or in an industrial area with landfills and transit hubs and cleverly adapted the old adage to ‘transportation, transportation, transportation’.

Well some enterprising souls have a housing solution that fits both of those bills: living in their car.

In early December, Arthur bought a $500 used van off Craigslist from a farmer in the B.C. Interior. With the help of his family, the vehicle was gutted, cleaned of mice feces and rebuilt with $400 worth of furniture, wiring and insulation.

In the small space, the van has four main areas: the kitchen and sink, work space, storage and bed. Without a personal toilet or shower, he has a daily excuse to go to yoga for exercise and to use the studio’s facilities.

The difference has shown in his savings: his monthly rent has reduced from $850 to a $200 parking fee plus $50 for hydro.

Full article over at the Huffington Post.