Don’t Be Afraid to Live With Your Parents

… if you are under the age of 18. If you are older than 18, why are you still living with your parents, better still, why do you want to move back in with your parents ?

I grow weary reading these self-help articles for new grads (or worse 30 year olds who have dugg too deep a debt hole or young couples trying to “build up a nest-egg”) suggesting that your parents would love to open up their house to their adult children.  We are talking about children who have lived away from home (for a while) that are now moving back home, to live with their parents, who have also enjoyed an empty nest (most likely). (I am not speaking of kids who need to stay with their parents due to disabilities or other issues similar to that, I am not that much of an Ogre).

Question: Do you want your parents to move in with you after their “nest egg” ends up exhausted because they had to support you between the ages of 25 and 30 ? Think about it, turn about is fair play in this world, especially when it comes to you invading your parents Golden Years.

This sounds like a rather parsimonious opinion, but when did it become a badge of courage to live with your parents? I must admit, that I am a hypocrite on this matter, as I lived with my parents during most of my work terms, when I was a co-op students, however, once I graduated, I did not move back home. This did not mean I did not want to live at home, but, I also knew my parents had done their job with me. They had made sure I had a degree and they had taught me all they could, and yes, they have helped me in life financially, but I have not moved back in with them.

Moving Back Home

A Badge for Those Contemplating Moving Back Home

When I was younger, kids wanted to move away from home, and be an adult, when did staying a kid become a status symbol?

I suppose if you are in dire straights, and this is your only option, your parents will want to help however, here are a few helpful hints and tips if you are planning on moving back in with your parents:

  • You may have grown up in your parents house, but it is no longer your home, you are now a lodger, treat this house accordingly.
  • Pay rent (if you can), and pay board if your parents are feeding you, allowing you to use their utilities, and giving you a space to live in.
  • Show your parents you are “saving” or “getting out of debt”, give them a feeling that you are trying to help yourself, you are not simply giving up. Your parents want to support you, and they will be happy to hear of your progress.
  • If you have a car, get rid of it (and no that doesn’t mean you can borrow your parents car). If you can afford to have a car, you can afford not to live with your parents. Worse don’t ask your parents to support your “car habit”.
  • Respect your parents privacy. Make sure you allocate time to NOT to be in your parents house. Your parents will thank you for it.

Big Cajun Man Lemma of Baby Boom Retirement

Kippers will be the death of the baby boom generation.


How Long Are You Going to Live ?

What does this have to do with retirement planning? Everything!

Many folks are planning for a retirement, but don’t have a number in mind, about how long this money is supposed to last, which could cause problems later in life (said Captain Obvious).


Time is Always Ticking

For those planning their retirement with a Pension as the cornerstone of their Golden Years, how long you live is not as important, because you will have income as long as you keep breathing (and your pension plan does the same (remember Nortel)), but if you are planning on creating a Big Bucket of Money that you will then draw from for your retirement, you need to figure out when you are going to “pack it in”.

The other advantage a pensioner has, is that the pension payments won’t (or at least shouldn’t) decrease in value . They may decrease in value if the pension is not indexed against inflation, but unless another Nortel situation arises, most pensions shouldn’t drop in value, however, those who have a Big Bucket of Money, they have to live that delicate balance of having growth in the “Big Bucket”, but careful growth so that value is mostly lost from withdrawal (and not losing value).

As Preet was quoted by Moneysense

Stop Over-thinking Your Money!: The Five Simple Rules Of Financial Success

So what should your “lifespan” number be? How long did your parents live for, that would be a good barometer (as long as there aren’t mitigating circumstances like smoking or being hit by a truck) to start your calculations. Maybe add 10% to your parents age, due to better medical systems? It’s all up to you, but if you want to do as Preet advises might be better to overestimate how much money you will need.

Yes I have written about this before with Retirement Do’s and Don’ts  , One Thing to Do Before You Retire and Going to the Gym to Work on my Retirement, but I don’t think I can over emphasize this point.


Going to the Gym to Work on my Retirement

“…Those who don’t have time for exercise will sooner or later have to find time for illness…” –Unknown

I used this phrase on a co-worker a few days ago, and they gave me a blank stare in reply. I keep trying to get across to my younger co-workers and peers that retirement planning in terms of  your finances is essential (although as Civil Servants, not as hard, due to the current Pension Plan), but, no matter how much money you save, if you are too sick (or worse dead), it means nothing. I have said before the most important advice I can give for retirement is Don’t Die, before you can retire, and I think this point really does need to be driven home.

Seasick Steve

Seasick Steve’s Album at Amazon

I go to the gym these days to help keep my knees usable, and to make sure my heart stays in relatively good shape. In my younger days, I wanted to look fit, but “the look” matters little to me (now).  I want to be able to walk and I don’t want to end up bed ridden in my “golden years”.

Coincidentally, I was listening to an album from Seasick Steve, and there is one song on there that really drives the point home about retirement, and I encourage you to listen to “What a Way to Go“. I heard that song, went home and hopped on my exercise bike. Listen to it on the iTunes store link (above), it says it all about retirement in one catchy song (and it is aimed at Civil Servants or anyone with a Pension). Here is the verse that drove it home for me:

The day of retirement have finally come
Get a gold watch and your work is done
One month later your heart give out
What was all that planning about?

— Seasick Steve, “What a Way to Go

Oh and one other acidic piece of advice for my readers that still smoke, save yourself some money by not saving for your retirement, enjoy your money now, because you aren’t going to need it. The other side of the coin is, I hope you have a medical plan for your retirement, because (if you make it to your retirement) you are going to need THAT! How dare I say that? I watched my Father smoke, and his retirement was spent in a wheelchair, was it caused by his smoking? I think so. You want to do something for your retirement? Quit smoking, put your smokes money in a retirement account and start exercising, it might not be too late.  First comment that says, “… it’s my body…”, gets the Second Hand Smoke boot in the groin award (I worked for a tobacco company I have a good idea what is in those things).



TFSA Retirement Welfare Bums

I am borrowing an expression that David Lewis made about Canadian Corporations getting far too many tax breaks (his phrase was “Corporate Welfare Bums“), however, I feel it is correct, given the furor in the main stream media about Rich Canadians getting fat off Retirement Welfare (again to paraphrase and add alarmist tenor to the argument).

Typical Rich Fat Cat Canadian

Typical Rich Fat Cat Canadian™ lying around with his TFSA and his tax loopholes!

This all seems to be a reaction to The Harper Government™ proposing (or maybe only socializing) a doubling of the current TFSA yearly limit to $11K, and thus the fear of “Rich Fat Cat Canadians™” taking advantage of this unfair change to hide income and possibly end up getting paid the Guaranteed Income Supplement if they retire (GIS is really to help those who are retired with lower-income, if you have a higher income it typically is clawed back). This is diabolical, someone who could save $11,000 a year until they retire might appear to be a pauper and attempt to get government hand outs? How dare they exploit this “tax loophole” ! #OMG

Now let’s all calm the heck down given  I have just whipped you into a fury of moral indignation about the Rich Fat Cat Canadians™ out there. My guess would be that the government (as part of announcing the doubling of the TFSA limit (possibly)) will simply force folks applying for GIS to report their TFSA holdings, and that will then disqualify them from getting the GIS , but if you believe what is being currently written, it is happening right now, and the Harper Government™ is doing nothing about it! #OMG

This (of course) is not likely the case, but having a higher TFSA limit does make for some very interesting questions about where to put your Retirement funds, especially if you are younger (for someone like me, I have about 10 years before retirement, if they DID double the rate and I DID max out my TFSA‘s I could have about $140K or so (with growth) in my TFSA). I have seen many interesting arguments on both sides, and I am not completely sure which is better, however, I will be proposing tomorrow (teaser) an interesting hybrid solution (that is neither brilliant nor new, just me rehashing old ideas (as usual)).

So all you Rich Fat Cat Canadians™ can thank the Harper Government™ for yet another break being given to you, you oppressors of the proletariat

Full Disclosure: I believe if I use the definition of Rich Fat Cat Canadians™ I must disclose that I am (most likely, depending on the income line used) a member of this club too, and yes this article was written (a little) tongue in cheek.


Financially, it is never enough

Last week I was talking to an Insurance Agent about possibly changing my term insurance carrier, to see if I could get a lower rate, and (as usual) the conversation was not just about Term Insurance for guys over 50 (that was the topic I wanted to talk about), unfortunately the topic of retirement planning and insurance coverage to protect my family came up (no, I didn’t bring it up, you can guess who might be the protagonist in that part of the conversation).

Financial Despair

At the Signpost Up Ahead, you see you are entering… The Financial Despair Zone

I pointed out that I have a pension plan (a very good and generous plan) so my family was going to be OK, in terms of retirement planning, or were they? The agent I was speaking with pointed out that the Life Insurance that went with my pension wasn’t really that much and if I died, my wife would only get a fraction of the money in my pension.

This statement is entirely correct, but it still annoyed me because after I hung up the phone I realized when you are talking to anyone selling financial services, you never are safe in terms of retirement or insurance coverage (yes, I will plead guilty on this, but I am not selling anything).

Let me give you a few scenarios I have been a part of over the past couple of years when talking to various financial service folks about various topics:

  • If I talk about Life Insurance, and bring up that I prefer Term Insurance, inevitably the agent I speak with espouses the importance of “Whole Life” insurance as it will protect me in my “Golden Years”.
  • Credit Card companies used to call me incessantly asking if I wanted to increase my Credit Limit, because you never know when something might go wrong and I needed some extra help.
  • If I am negotiating a new Mortgage Term, the topic of Mortgage Insurance will inevitably come up, because it is important to protect my family in case something terrible happens.
  • When I call to talk about disability insurance, suddenly the topic of Catastrophic Illness insurance comes up.
  • And on, and on, and on….

My family is never really safe is it? I can never rest easy that I have enough insurance coverage, financial leverage or low enough debt load, is it? I realize that all of the cases I mention are sales folk simply trying to either up sell new services to me, or to make sure they have a bigger commission, but this does explain why I have such trepidation when I have to meet with anyone about my financial situation. I know I will be barraged with worst case scenarios, and how badly prepared I am for my retirement.



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