This is a guest post by Alex Summers.
Considering the state of the economy and the high number of twenty somethings struggling to find their professional place in the world, a large number of parents are opting to purchase their children homes. Instead of giving their kids a large inheritance years down the road, parents are choosing to pay a down payment or to buy a home for their kids to help them get off on the right foot during their young adulthood.
This is a guest post by James Lander.
If you’re like most people, you’re probably dreaming of relocating to a new place for your retirement. We all want to take off to some warmer, quieter place when we finally get freedom from jobs that tie us down to one place. It can be hard choosing a place to retire so you really need to give it careful thought and planning before you make a decision.
This is a guest post by Mike, the founder of CreditCardForum.
When you think of credit card rewards, the first thing that pops in your head is probably “cash back” or “airline miles.” But those are only a couple of the different types. These days you can find rewards programs for almost anything, including ones to boost your retirement savings.
Today is Elder Abuse Day in Canada as Sharon Singleton points out in her article, Seniors should focus on estate planning.
Canada will mark Elder Abuse Day on Tuesday, with concern about retirement and pension planning mounting as the population ages. Nearly half of all Canadians from the baby boomer generation have not saved enough for their needs, according to a poll carried out for the Canadian Institute of Actuaries.
As lawyer Les Kotzer of Fish & Associates suggests that’s a recipe for exploitation of their elders. In his book, Where There’s an Inheritance, he collates about 80 anecdotes on how a lack of estate planning, or mistakes in working out a will, have led to abuses.
Longer lives and reducing financial resources give a double whammy to those who have done insufficient retirement planning. That can affect both the boomers and their parents. The boomers are hoping to inherit from their recession-era parents who are in turn dependant on over-indebted kids.
Kotzer points out that some of the most common problems come from giving up control to the children, without having proper protection in place. He cites a number of examples:
Children who had convinced their mother that she could save them money on taxes when she died by transferring her assets to them. They then paid her an allowance, though when she overspent one month, her daughter yelled at her.
An 80-year old woman was pressured by her son to put the house in his name to avoid probate taxes. What he didn’t tell her was that his business was going bankrupt and his creditors sent her a letter laying claim to the house.
A 75-year-old woman worked two jobs. She had loaned her daughter $100,000 and her son $150,000 and when her husband died asked for the money back. Her daughter didn’t have the cash and her son claimed it was never intended as a loan and she’d have to go to court and sue him for it.
It is important to keep good records and these documents need reviewing on a regular basis to reflect changes in life. Wills should be drawn up and kept up to date as grandchildren are born, or children get divorced. Putting such documents away and forgetting them is a recipe for a family disaster.
Your retirement savings account may have been what you hoped would provide the retirement you dreamed about. The first upsetting factor may be a good news / bad news issue. You will probably live longer than your parents lived and than you may have envisaged. Yet you are in great health and feel you can go on for ever.
The second factor has affected a large number of retirees and that is the major recession that is now easing but leaving many funds in much poorer shape than they were before. For either or both reasons you may find that you are short on retirement funds. Here is what Rob Carrick recommends. Don’t panic: it’s a time for some strategic thinking.
Anxiety about not having enough put away for retirement is rampant in this country. Fortunately, there are solutions. If you simply can’t contribute more to your retirement savings plan, you can work longer. You can also try ramping up the risk level in your retirement portfolio to achieve higher returns, and scaling back your retirement lifestyle aspirations to comfortable but not extravagant levels.
If you feel that it is only you that is affected by this, then consider a recent survey commissioned by BNN, CTV and Standard Life. They found that:
Given this, many are considering working in their retirement years and thus extending their retirement savings.
If you have strong nerves then ramping up the risk level in your portfolio with more exposure to the stock market is an option to consider. However it is a tricky way for beefing up your retirement savings, so approach it with caution.
The safest way of addressing your concerns about a retirement savings shortfall is to scale back your lifestyle aspirations for your senior years. It will be something like the economizing that’s necessary when you’re raising children and carrying a mortgage. And for your leisure time, develop affordable hobbies.
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Most seniors look forward to a good life in retirement. However there are now two key changes that mean that this only comes through careful financial planning for your retirement.
In other words, you may have to trim your spending to make your savings last. Just consider one of the examples quoted in the Star news item:
When Janet and Bob retired at age 55, they were earning a joint income of $400,000. Both were senior executives in the corporate world. Now in their late 60s, they live more frugally. No longer do they own a cottage up north, buy new cars, eat in restaurants or rent condos in Florida with friends. They live on a budget of $60,000 to $70,000 a year, which doesn’t include debt, to make their savings last.
Statistics Canada published a report in 2005, which detailed the spending patterns of older people:
Here are some of the ways you can stretch your savings.
As a retiree, you have fewer work-related expenses, you pay less in personal income tax and you contribute less to public benefit programs. Since there is no need to leave an estate, with careful living you can enjoy what you have to the maximum and hope to die when your time comes just a little better than broke.
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This post started off with a draft title of A Senior By Any Other Name. I was picking up the theme of a Montréal Gazette article I enjoyed entitled, What’s in a name? That which we call a senior …
The reason why my interest was piqued by that article was that I recognized the author’s name, Janet Torge. It reminded me of pleasant evenings spent playing badminton in Beaconsfield many years ago since she was a member of the club there.
Janet mused about some of the existing names that are being used to describe seniors:
All of them seem to have drawbacks and she came up with the pleasing alternative of Late Bloomers.
Avoiding the word plays that the Bloomers word might have suggested, I suddenly realized that there seemed to be an acceptance that what we are talking about here is a label for others to use about those of us who are over 50.
Since we are all living longer and staying healthier, I am not sure I will meekly accept a label that others might put on me. Given many more years of productive and fulfilling life, it seems to me that a more proactive approach suggests we should not be looking for a Senior label. A label is usually something you stick on an inanimate object. What we need is a Senior Brand.
Why a brand? Without a strong brand, others may assume the wrong things about seniors in general. If we want to get more positive reactions, then we should not be shy about the positive contributions we can make. The Senior Brand should certainly accentuate the positives. Just think of some of the adjectives you might apply:
At the same time as guardians of the brand we must make sure that any possible negatives that people may assume would apply are never visible. That means avoiding any suggestion that we may be:
Thinking along those lines you might come up with the following (or their female equivalents where appropriate) as possible contenders for the brand name:
Those are just to get your mental juices flowing. If you can think of a more positive brand name for seniors, then why not add it in the comments. This is really important because there are more and more of us every year who will be promoting that brand. Let’s find a brand we can be proud of.
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If you have income, then you must pay taxes. That is true even when that income may be only what a Ponzi schemer may have reported to you. That is unfortunately the situation in which the Montréal victims of Earl Jones now find themselves.
Apparently the Quebec tax authorities will try to lighten the tax burden on Jones’s victims even though many should have no tax burden since the income was illusory.
Victims of financial fraudster Earl Jones won’t have to pay taxes on investment income they didn’t actually earn, Quebec Revenue Minister Robert Dutil announced. Jones’s victims will also be able claim a deduction for lost revenues, Dutil said in a statement. “I sympathize with these people who are going through a deplorable situation, and I want to clarify this to help avoid all confusion for these victims,” he said.
When someone is in a precarious financial situation and unable to meet their obligations, the agency follows their case closely in line with the information available.
Some of the fraudster’s victims are finding at the federal level that things are moving more slowly and there are delays in getting some relief for taxes they paid on fictitious income.
Kevin Curran, a member of the Earl Jones Victims Organizing Committee, says the government told victims last summer to file adjusted tax returns for previous years stating that the fake income provided to them by Mr. Jones was erroneously reported, at which point they would receive tax refunds. Many of the more than 150 victims did so, but despite a promise to move swiftly, they are still waiting for their tax returns. Some of these people are struggling to afford daily living expenses. Furthermore, a handful of the victims that would qualify for increased government pensions cannot get them because their income is still wrongly pegged as being too high.
Last year in the United States, the Ponzi Scheme victims of Bernie Madoff received somewhat faster tax breaks although the public resentment about the support the troubled banks were getting may have created a more favorable climate for speedy action.
The Internal Revenue Service announced unprecedented tax relief for victims of Ponzi schemes, saying many of those affected could deduct up to 95% of their losses immediately. The move represents a significant relaxation of longstanding limits on tax relief for victims of investment scams. It reflects the pressure officials are feeling to help individuals who have been hurt in the current financial crisis, when public resentment is growing over the billions of dollars the government is directing into troubled banks and other big corporations.
Meanwhile it is good to see that vigorous action is being taken to prosecute those who perpetrated these dreadful schemes. The Feds are targeting Bernie Madoff’s brother and sons for Tax Fraud.
Last summer, prosecutors essentially made clear they wouldn’t go after Bernie’s wife, Ruth. But that’s not the case in regard to his brother, Peter, or his sons, Mark and Andrew. It is reported that federal tax-fraud prosecutors in Manhattan are pursuing cases against Bernard Madoff’s brother and sons.
To add to this sorry tale of woe, it now appears that there is a Bogus Web Site Reportedly Trying to Rip Off Madoff Victims
A bogus Web site is targeting victims of Bernard Madoff’s record Ponzi scheme in an apparent identity-theft scam, the Securities Investor Protection Corp warned today, The New York Post reported. The site claims that $1.3 billion in Madoff money was recently found hidden in Malaysia, and displays photos of huge stacks of cash allegedly stashed by the mega-crook. The so-called “International Securities Investor Protection Corporation” urges burned investors to submit claims by filling out an online form and mailing in a copy of “your most recent brokerage account statement.”
The site rips off design elements of the real SIPC site. The SIPC wants to be as clear as possible that Madoff victims and other investors should not share any personal financial information via this Web site or rely upon it as an information source.
One would hope that these poor victims have gone through enough to realize that once bitten requires them to be twice shy.
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Statistics Canada has some good news to report:
Canadians are now living longer according to Statistics Canada. For those born within the last two years, life expectancy has increased by more than two years, as compared to 10 years ago. The agency says much of the gains in Canadian life expectancy come from men, even though women still live the longest. Men’s life expectancy at birth rose by 2.9 years to 78.3 in 2005-2007. Among women it increased by 1.8 years to 83.0.
Life expectancy among seniors is also on an upward trend, as it has been for several years. The average man who has already made it to the age of 65 could expect to live an additional 18.1 years in 2005-2007. That’s an increase of two years from the previous decade. A 65-year-old woman can expect to live an additional 21.3 years, up by 1.3 years.
It may be good news, but it may create real problems for the total budget. The office of Parliamentary Budget Officer Kevin Page reports that the Aging population will soon strain federal finances.
The government faces a renewed battle with the provinces over health-care cash as Canada’s greying population puts an increasing strain on federal finances in the coming decades. … It is a battle that will also be fought along generational lines, as public services for Canadian seniors account for a growing proportion of federal spending, leaving working Canadians to pick up the tab even as their living standards shrink.
In the future, population aging will move an increasing share of the population out of their prime working-age years and into their retirement years. An older population puts increased spending pressures in areas such as health care and elderly benefits. In parallel, slower labour force growth will restrain growth in the economy and in the general tax base from which the government collects its revenue.
If health-care transfers are allowed to increase at the current rate, the federal government would have to raise taxes or cut spending by nearly $30 billion in the next budget to keep Canada’s debt in check.
Another factor is that the national fertility rate has fallen from a peak of 3.9 children per woman at the tail of the “baby boom,” to 1.5 children per woman now. Coupled with the longer life expectancy by 2019, individuals over the age of 65 are expected to account for more than a quarter of the population; and by 2029, more than a third.
This puts incredible pressure on the Federal parties as they consider the next federal budget.
The Conservatives are promising to “stay the course,” and will keep cutting corporate taxes. This will lead Canada into even deeper deficits. The NDP would prefer that Canada’s seniors are helped out of poverty with improvements to the Guaranteed Income Supplement (GIS). This is unlikely to get support from the major political parties. Since Liberal and Conservative governments started cutting corporate taxes 10 years ago, individuals are carrying 61 percent of the cost of government programs, while corporations now pay only 15 percent.
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Earl Jones gets an 11-year sentence for orchestrating his massive fraud scheme.
Victims of the Ponzi schemer had hoped he would get the maximum 14-year sentence but a deal reached between prosecutors and his attorneys agreed on the 11-year sentence. Since he can apply for parole after serving one-sixth of his sentence that means he could be released from prison after 22 months. Many victims who have seen their future destroyed wonder how such an evil fraudster could possibly be spared the maximum sentence allowed by the law.
Earl Jones pleaded guilty last month to running a pyramid scheme that started in 1982 and included at least 158 victims, including several close friends and relatives. The Quebec court Judge Helene Morin was extremely harsh on Earl Jones in her remarks Monday. “Some victims call him a liar, a demon, a parasite, a snake, a financial predator and a social sociopath, as he promised them that their money was not only to be safe with him but growing.”
Many people had trusted Earl Jones but perhaps the most devastating case was that of his brother, Bevan.
Jones’ brother said he never wanted to speak to him again and would never forgive him.
“None of us will ever be the same,” said Bevan Jones who, along with his wife Frances Gordon, was fleeced out of $1 million.
“You work all your life, you sell your printing company and now we live on our government pension,” Bevan Jones said.
“Everything we saved up for and worked for is gone, ruined, by this little … I can’t say the word.”
The judge made sure that Earl Jones understood that his victims are not just suffering financially: she said all have suffered from insomnia and many have seen their health rapidly deteriorate. Some who took pride in never having taken medication are now on anti-depressants.
Jones has been shunned not only by his friends and relatives, but his wife Maxine has also filed for divorce. Jones once lived in the lap of luxury, but recently, he lived anonymously in a suburban rooming house and was penniless apart from a government pension.
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