How My Retirement Plans Got Derailed – Big Time

In previous posts I have described how I started working at a major bank when my husband had a serious work place accident.  This “temporary” job lasted for almost twenty-five years.

I won’t get into the reasons why I left but will continue the story from there.

Starting Our Own Business

Because of his health, my husband had trouble sticking with any type of employment.  We decided to go into business for ourselves mainly so he would have some useful occupation but also because we liked the thought of having the freedom to make our own decisions.

Related: How To Prepare Yourself Financially Before You Start A Business

With dreams of future financial independence, we started a little retail store and threw all our efforts into making this work.  Unfortunately, the economy was not the greatest and expenses were very high.

We struggled along for three years, using up almost all our savings and making the terrible mistake of financing the business with our many credit cards.

Eventually we gave up and closed the store.  We sold as much of the stock as we could at liquidation prices and donated the rest to the charity shops.

With no money and over $100,000 in credit card debt, we sank to our lowest point of despair.

Starting Over Again

I managed to get a line of credit secured by our house to pay off all the credit cards and the lower monthly payments eased our situation somewhat.

I started working a few evenings a week in a big-box retail store and got up at 3 a.m. every morning to deliver newspapers to get some money coming in.

Related: What I Learned From Working Retail

I then took a merchandising position at the store.  It was still part-time with no benefits, but more hours – 30 to 35 hours a week.

The pay was way less than I was earning at the bank, but more than I was getting up to then, so I was able to quit my newspaper gig.

The job was a lot different from what I had previously done, but I enjoyed it (most of the time) and got along well with my co-workers.

During this period my husband was convalescing from his second major heart surgery; my mother-in-law passed away and I (as her executor) handled all her affairs; my own parents ended up in the hospital on different occasions necessitating going to BC several times for weeks at a time, which resulted in the need to sell their house and move them into a seniors’ residence; our basement flooded; and our first grandchild was born (a happy occasion at an otherwise stressful time).

After I had worked there for over 6 years, the company was purchased by another business.  All the upper management changed and they proceeded to make changes to job descriptions and duties and reduce staff hours.

Related: Switching Careers Midlife – Is It Worth It?

I was not willing to make the required changes, so I quit.  (In fact, all but two of their long-term employees left within a three-month period.)

Early Retirement?

So here I was at 57, unemployed and – judging from the total lack of interest in my job searches – pretty much unemployable.  So I guess I’m basically retired.

My husband gets disability pay and I receive some blog income, but after more than a year our savings are rapidly depleting.  I don’t want to start working at a job that requires me to ask, “Do you want fries with that?” but it may come to that.

My parents want us to move to BC and I have been considering that.  The problem is with our house.  It’s admittedly too big for the two of us (5 bedrooms, 3 bathrooms) but it needs major updating to get it ready for sale.

We could only pay for the home renovations with our HELOC.  This, together with the amount still remaining from our credit card consolidation, would really reduce our equity.

After house closing and moving costs are taken into consideration we could only afford to buy a small condo apartment.  What’s wrong with that?  It’s not really what I want, but it still bears thinking about.

My only significant asset is my RRSP.  I have been considering converting it to a RRIF, but is it too soon?  My worries are:

  1. Will it deplete too fast? (My dad tells me I have at least 30 more good years in me.)
  2. I earn about $600 a month in dividends, which I have always reinvested and I don’t want to lose this income by selling the shares.

I tend to be impulsive and overly optimistic, but in this case I need to step back and really consider my options carefully.  If I make a mistake I won’t be able to bounce back again easily.

Related: Create A Retirement Income Plan

The only thing I know for sure is that I don’t intend to move in with my parents.


38 Responses to How My Retirement Plans Got Derailed – Big Time

  1. Pursuit says:

    Thank you for sharing the challenges you’ve faced; it can’t have been an easy road you’ve travelled nor an easy story to tell. Your experience speaks to the uncertainties in life, particularly the cost of ill health to a family and the impact of the downturn in the economy. The fact you and your son together have created such an interesting blog says volumes about the depth of your commitment to achieving your personal and financial goals and the quality of your relationship.

    You must be very proud of your son. I’m guessing he is the wonderful young man he appears to be in part because of the lessons you’ve taught him. You’ve set a great example of loyalty to family in your support of your husband, his parents and your own. Hopefully, what goes around comes around.

    A particular gift you must have is the ability to talk with your son about money; your approach to this and his spin on what works and what doesn’t as an adult child communicating with a parent would be worth sharing in a post or ten. My own experience and that of most people I know is that the financial choices both parents and children are often a very touchy subject.

    I wish you well as you continue this journey and want you to know how much I look forward to each of your posts. Thanks and good luck.

    • Boomer says:

      @Pursuit: I admit that I was a bit nervous and reluctant to “bare all” as it were. I don’t want to come off as a “poor me” whiner. Many people put on their brave face and act like everything is just fine because they don’t want to be judged for their (often poor) choices.

      But you learn from other people’s experiences and hopefully will avoid some mistakes and find some encouragement.

      I am very proud of my sons and their accomplishments. I guess, when I thought they weren’t listening something got through. Before we began this blog we were discussing the movie “Julie/Julia” and the comment the character Julie makes – “I have thoughts.” Well, my thoughts would probably have been kept to myself but he took the idea and ran with it and I was hooked.

      I appreciate all he has done to make the blog successful plus I appreciate and am very grateful to all of our readers who support us.

  2. I don’t think you need to sell your stocks but instead of reinvesting the $600 in dividends it may be time to start using that as part of your monthly income. It could make things easier.

    Sell the house as is – well loved with that lived in look. You are past the point in your life when you should be taking on debt.

    Are you moving to BC to be caregivers to your parents or to start a new and exciting chapter of your own lives? If it is an adventure for you both then go. If it is to be caregivers then maybe your parents need to move towards you.

    Your husband may have high health care costs and there is a wait time for health care coverage when you move to a new province. How long is the wait time in BC?

    You will lose your personal support network – your family and friends. Can you make new friends easily? Can you and your family afford to visit between provinces?

    • Boomer says:

      @Jane Savers: Am I moving to BC to take care of my parents? There’s the rub. They have an amazing way of laying on the guilt trips.

      My whole family moved to BC several decades ago and can’t understand why I chose to stay in Alberta. My parents think that now my MIL has gone there’s nothing here to stay for – only my children, grandchildren, my husband’s siblings and their families.

      I would like a new start though. I recently was intrigued by an article I read in Money Sense magazine on the best foreign places to retire to cheaply – Costa Rica, Ecuador, etc. I definitely had a “Calgon, take me away” moment.

  3. Hope says:

    I echo Pursuit. You are an amazing and strong woman. In this blog I have also seen that you have a sense of humour and a joie de vivre. Do remember the line from the Marigold Hotel movie- ‘It all turns out right in the end. If it is not right,then it is not the end.’

    I too suggest you sell the house as it is. Have you considered exploring co-op housing? You may also qualify now for senior housing or other government supported housing for older or disabled persons. I happen to know several people in such housing across the country and they live in fabulous places and communities.

    As to where to live- I just encourage you to carefully consider your own needs and not just your parents. Those shoulders can only hold so much! Take care.

    • Boomer says:

      @Hope: In your quote “If it is not right, then it is not the end,” the not being the end is what scares me. :)

      Admittedly, moving to Kelowna (where my parents live) has never been on my list of places to live, that’s why I’ve been reluctant.

      We are definitely looking into other housing that would be more suitable for us.

      Thank you.

  4. Gary says:

    I can’t imagine the range of emotions you went through writing this article. They say “what doesn’t kill you makes you stronger” so you should be able to leap tall buildings in a single bound! I agree with all that Pursuit wrote; he or she made some excellent comments.

    We are in a seniors community; we own our townhouse but rent the land from an Alberta company — “Parkbridge” — and we love it. It may be an option you haven’t considered; all of your outside work is done for you so it is just turn key when you have to leave for a day, a month or whatever. Best of all we are close to our grand children!

    Don’t renovate; instead declutter and maybe paint. I’m sure you know some real estate agents or local paint store persons who could help with the decisions.

    We wish you and your hubby nothing but the best now and in the future.

    • Boomer says:

      @Gary: Thanks for your comments and support.

      Your suggestion of a seniors community is just what my husband would love, the trick now is to figure out where.

      Since not working I have been de-cluttering in a major way. My husband is afraid that if he sits still too long he’ll be the next to be packed in a box. :) When we move there will be very little to take with us.

  5. Deanne says:

    wow can I ever relate to this – my retirement was swept away from me. I’m now 52. At 50: my mom died, my dog died, and a month after my mom, my dad died; a colleague killed himself; my husband of 30 years left with half our assets; I lost my most-beloved job; was diagnosed with a terminal cancer – all within 6 months. In my case a really weird upside is that I don’t need to worry about outliving my money or looking for work, though being forced-retired at my age sucks – what a back-ass-wards situation I am in! I wish you well.

    • Boomer says:

      @Deanne: Now you make me feel like a complainer. I am terribly sorry for all you have gone through – and still are. I wish you well also.

      John Lennon’s quote hits it right on the nail for me – “Life is what happens while you are busy making other plans.”

  6. Kelowna might make sense if the RE correction in the Okanagan makes enough sense. I agree with selling out as is. It is not the time to be investing in RE. Protect your scarce financial resources.

    I would visit first and see whether a move makes sense. I have a friend who voluntarily moved from Calgary to the north Okanagan.

    Good luck
    Keith
    from PV MX

    • Boomer says:

      @Keith Charles Cowan: Hah! I visit 2 or 3 times a year. Seriously though I have seen a few newer apartment condos that may suit. I just have to make sure they will accept 3 cats (and don’t tell me to get rid of them – I hear about that all the time from my dad.:) )

  7. Teresa says:

    If it helps, we all think of things we might have done differently in the raising of our families.

    You can’t do anything to change situations from the past, just learn from them for the future:)(daycare, company pension).Many of us have situations we wish we could “do over”.I know I do :)

    Personally the draw for me would be the grandchildren and friends. Kelowna is not that far away from Alberta. Teach your parents how to Skype. As for division of labour amount siblings, much can be accomplished with frequent visits.

    I like the exploration of LCOL areas. This could be an adventure:) if your spouse is of a similar mind.

    You sound to me like a person who has looked after themselves, hence the paper route.

    You should follow up this post with one on Frugal hacks , The decisions and things people have done like you when stuff hits the fan. ( Look up the blog by Donna Freedman called Surviving and Thriving)

    I am in for downsizing the house if the one you purchase is also mortgage free. Not sure if you have ever thought of using the space you have, I have a friend who when she divorced bought a former children’s group home. She painted and outfitted the main floor where clients would be, she run’s an esthetics business and periodically as needed would rent rooms to short term students (a couple of months to six weeks) usually to foreign students in summer session.

    You have all the head knowledge, there may just be a bit of busy noise going on right now with other situations (like your husbands health).
    I agree plan to live to 100 so you have to figure the budget realistically with that time frame.

    I also agree with previous posters that someone else will have their own vision for your property; declutter, clean and possibly paint. Also a good home stager is worth the money.

    DO NOT GO INTO ANY DEBT, there are no guarentees you would even get it back.

    Only good wishes as you move forward in your decision making.

    • Boomer says:

      @Teresa: Thank you for your suggestions.

      I have considered renting the basement rooms and having a day home – but for several reasons it won’t suit.

      My parents don’t even own a computer and I can’t imagine them Skypeing :)
      I’ll stick to phoning them every week.

      • Teresa says:

        Right (head plant to forehead:))

        We bought a computer about 8 years ago for my inlaws. They were in their mid seventies at the time. It sat in their basement , until three years later that dinosaur was moved into our house for one of our children.

        Boomer, keep at it. The right idea(s) will stick.
        As I say to my husband, multiple streams of income:) That’s what I see my adult university aged children doing, multiple jobs dovetailing into each other.

  8. HatterMike says:

    That’s a very brave post. I’ve grown to admire you and your “echo” son and your thoughts for us all.

    I agree with all the replies above saying that you shouldn’t spend big bucks fixing up your place. Usually a coat of paint, maybe a new carpet and a serious decluttering (including knick-knacks, pictures, fridge magnets, and so on) will do fine. Do a bit of landscaping if necessary. Also, you might get a house inspection (which you can make available to buyers) and fix any things that are highlighted.

    As far as taking care of parents, my take is that we have a first responsibility to ourselves, our children (and our wee grands). After that, our parents. And we have siblings who share. Your folks moved away and I’m thinking you need not follow them and leave your own little family behind.

    My wife and I live in a little condo (in Toronto) and it’s not a bad deal. I don’t ever have to shovel snow or dig the weeds out of the driveway; I can go on trips without worrying about the property; And I’m in handy walking distance of coffee shops, stores and sundry good things. That’s really not a bad thing. I think a little condo and a few bucks in the bank is a good thing.

    On RRIF, there’s no advantage (I think, subject to you talking to clever people) to converting before you turn 71. You can withdraw money from your RRSP at the same tax rate as you would have from a RRIF.

    • Boomer says:

      @HatterMike: We have upgraded several things in the past few years – new roof, high-efficiency heater, hot water tank, toilets, interior doors and our basement was completely redone after our flood (new drywall and flooring). We haven’t really done anything cosmetic or sexy to modernize our forty year old house.

      I haven’t been reinvesting my dividends lately so I’ve accumulated a bit of a cash lump sum. I’m thinking of withdrawing some amount from the RRSP towards the end of the year. I think I will get most of the withholding tax refunded in the new year.

  9. Planner says:

    Thanks for sharing, I am sure there are lots of people in the same boat.

    Have you considered where you will be financially when you turn 65?

    You will likely qualify for the Guaranteed Income Supplement (GIS) when you turn 65. Any income that you earn from an RRSP will reduce your payment pretty well dollar for dollar.

    As your income in currently low, it may be the time to cash in your RRSP and pay less income tax. Besides paying your bills and your debt, some of the money from your RRSP could be put into a Tax Free Savings Account, which does not affect your GIS payment.

    I agree with Hope, sell your house as is, but if you can buy a house outright it will reduce your monthly budget.

    Good luck on your next chapter.

    Below is the link to information about Guaranteed Income Supplement (GIS):

    http://www.servicecanada.gc.ca/eng/sc/oas/gis/guaranteeddincomesupplement.shtml

    • Boomer says:

      @Planner: My RRSP contains dividend stocks ( I call them my babies because I’ve had them for such a long time my return on purchase price is about 18%), bonds, ETFs and I’ve been accumulating cash.

      My plan (subject to verifying the details) is to withdraw a suitable amount based on any income needs and minimizing the tax I’ll have to pay. I want to either transfer my dividend stock directly to my TFSA if I can – I have available room – or just repurchase them to continue that income tax free. The other investments can be used for taxes or income as required. This will reduce the balance in the RRSP so when I start collecting my pensions the RIF minimum balance requirement at 72 will be a lot less.

      I’m hoping this plan will work out, anyway.

  10. Wow, heckuva post Boomer.

    You’ve been through a bunch but you know what, you’re probably a better and stronger person for it. Your son Echo should be proud of you :)

    I don’t think fixing up the house is a good move, because some of the money will be sunk costs. Do what you need to do, take a small hit if necessary and although it’s tough – make the plunge to a smaller condo/apt. place.

    A few years from now, you’ll be glad you did since with a big house comes big expenses and prolonging them, the costs will only increase and reduce your cash flow.

    The RRSP? Geez, options….

    I would consider withdrawing some money from the RRSP and putting assets in TFSA first, maxing that out if not already done, then unregistered next. That way you have tax-free dividend income or worse case, tax-efficient dividend income.

    You could slowly do this over the next few years, withdraw from RRSP. This way, the TFSA assets will not be income tested in the future as well, since I will assume you’ll draw on CPP at 60 and then OAS in another few years.

    Good luck with your plans and let us know what you decide.
    Mark

    • Boomer says:

      @My Own Advisor: Thanks for your advice – appreciate it. Your comments about the house echo those of other responders and I’ll consider how to proceed in the next few months.

      I was thinking of withdrawing from the RRSP now and waiting – perhaps until 65 to collect CPP. I’ll have to crunch numbers to see if I can swing it.

  11. Thank-you for sharing your story as I’m sure it wasn’t easy. If there is one thing that is for sure is that nothing in life is guaranteed. Sometimes what we plan for our in our future doesn’t take the path we thought and we are left with decisions we have to face. You are a strong woman and you did and still do whatever it takes. Getting up at 3 am in the morning to deliver papers shows your determination. Keep smiling and giving life your best shot! Cheers my friend.

    • Boomer says:

      @Canadianbudgetbinder: I don’t consider myself particularly strong – I just face each day as it comes and do what I have to do. You are very kind.

  12. Joe says:

    This is a challenging situation. I would do my best to cash out equity now rather than later. Yes, without doing the upgrades you won’t get the maximum sale price. But going into debt is a risky proposition especially when returns on home reno “investments” are often negative. It’s not easy talking about hard times, but your wisdom, acquired through adversity, is valuable to younger readers. Good luck.

    • Boomer says:

      @Joe. Thanks for the advice. I’ll perhaps get a realtor estimate of what I can expect to sell for so I know what I can work with. That’s probably the best first step.

      I hope young people will avoid making major mistakes, but also that they realize that when life throws them a curve ball they can get through it.

  13. Bet Crooks says:

    Thank you for sharing your personal life with us. You have certainly had more than your share of burdens to carry. I hope that the wheel turns and unexpected and better things begin to happen for you.

    The only advice I can offer is don’t spend on fixing up your home to sell. Our neighbours totally re-did their home at a high cost just before selling. The new buyers tore out all their brand new bathrooms and the remodelled kitchen and did them again in their own style. The ones put in just before the sale were never used! (And they were lovely, our neighbours had us in to admire.) Buyers aren’t going to mind if this or that needs a change and they won’t pay more to get something that is already done.

    • Boomer says:

      @Bet Crooks: I get what you mean about redoing the house. When we sold my mother-in-law’s and my parents’ houses they needed a bit of work done and the buyers had their own plans and ideas of what they wanted to do. As I’ve mentioned before, many utilitarian upgrades have already been done just not the cosmetic renos that would bring the house into the twenty first century – we still have seventies gold and green tile in the ensuite bathroom :)

  14. fraser says:

    Don’t renovate. The buyers may not like what you did and you will get a negative return on the cost. First of all, declutter your home and make all of the rooms look as big as possible. Get rid of all of your personal momentos, photos, etc. Paint the rooms a neutral colour. If you are unsure of what and how to paint, engage the services of an interior decorator. We were fortunate enough to find one at our local paint store. For $200 she came in and gave us a plan for every room. This made a huge difference.

    Engage the services of a good real estate agent, preferably not a friend or associate. This will enable you to negotiate the commission as a business arrangement. Keep in mind that you should only negotiate the lister’s commission otherwise MLS agents will be reluctant to bring prospects to your home. A good real estate agent will provide you with tips on how to stage your home. In our case we invested in new fluffy towels, bedspreads, and some pictures. We kept the bills, and the kept the tags on the towels. We sold our home in three days so we were able to take all of this back to the store. Your agent should provide you with a marketing plan, a list of comparable solds, an explanation of ‘who’ your competition is and a sound reason for the listing price. If you want to sell, price it properly-to the market.

    Prior to signing with a real estate agent, take a look at his or her listings. Specifically look at the posted pictures. If they are poor and show the listings in a poor manner then move on to select another agent who is a true professional and understands how to sell.

  15. Biggoof says:

    I think you are too young to retire. Since you are considering retirement you are probably finding out about all of the pitfalls and processes of retirement. Have you considered becoming a retirement planner? There is training (and certification) available, there is no inventory, you can work from home (or other people’s houses) and hopefully you can get paid. You can use your knowledge and experience to help others. Just a thought.

    • Boomer says:

      @Biggoof: You are very sweet. That’s actually not a bad idea. I did have a CFP designation but didn’t upgrade my annual certification in the last few years because I thought I was out of that life. It definitely is worth looking into. Thank you.

  16. Robert says:

    I am slightly older than you – just turned 60. My life has had its share of equally traumatic events, although different to yours – I raised 3 kids as a single Dad. I am divorced and my financial parameters are different to yours. However, like you there is little I can do to change my income going forward.

    I have found a number of ways to reduce my retirement needs through out-of-the-box thinking. I hope to retire within a year. My biggest challenge has been knowing what I need financially at that point.

    You are 57. At 57 I was promised a job that was pulled at the last moment. 6 months later I was offered a great job to finish my career with. Just before my 59th birthday I suffered a layoff. After that I was like you thinking I was retired by default. But something else came along and it actually has hastened my financial goals.

    I think you are only retired if you want to be. As far as your decisions go, there is no “correct” answer. If you are squeezed financially, examine every aspect of your expenditures.

    • Boomer says:

      @Robert: I am very interested in looking at other options. I see some people just sitting around watching TV all day (or some equivalent inaction) and I just cringe at the thought. One thing I liked about my last job was that they were very accommodating when I needed to take time off for my family situations.

      While I wouldn’t refuse any realistic offer, I am now interested in doing something from home if I can, and I’ve always been pretty frugal – not much more to squeeze out. As I have mentioned, I tend to be overly optimistic.

      Thank you and good luck.

  17. Pauline says:

    sorry to hear that. Can you rent the house to generate a little income instead of selling at a low price? A fresh coat of paint and few cosmetic repairs don’t cost that much and you can rent smaller for yourself/be flexible on your location.

  18. Grayson says:

    This is some story. I am sorry to hear about all of the trial and tribulations that you have been through, but it shows true grit. You have made it through them and you aren’t homeless. I would sell the home as is, but first check with a realtor to see if they can justify the upgrades.

  19. Dunny says:

    I am late to this post and comment, but just had to chime in. You are not alone — this happened to me at the same age (8 years ago) and many other people I know.
    Partly due to good advice, and desperation, I did the opposite of traditional advice. I had sold my condo 3 days before I was downsized, but I bought a big house as I had planned (with very big mortgage), rented the basement suite, and then took in ESL student boarders in 2 of the 4 bedrooms. I stretched out the mortgage over 40 years (35 now) in order to keep cash outflow low. I kept looking for work, took my DB pension, and picked up part-time retail jobs. I also looked for free-lance work. In order to provide certain income I took CPP at age 60. Sometimes I had no work for months and sometimes 5 jobs. One 5 month period I juggled 5 jobs, and cooked meals for students every day. Meanwhile I kept building up my RRSP. I bought and sold an investment condo by taking out equity loan for the down payment (making only $50,000), but condos do not appreciate a lot, maintenance fees are high, and problems many, so I am glad to be rid of it. I didn’t pay off the loan on the house when I sold the condo, but put it into my taxable investment account. Between a few lump sums here and there, yearly contributions to RRSP, and a small inheritance, and investing in the stock market, I have tripled my investment portfolio.
    I did build a lane way house a few years ago which cost a lot more than I budgeted and cleaned out all my unregistered savings, but I have positive cash flow on that too. If you have equity, you can always borrow on the house and at low rates. I live frugally, drive a 1987 car, but still travel every year.
    I would keep the house and get some income from it of some kind — I had to really change my attitude about that. It will increase in value and the capital gain is tax-free, plus you could rent the whole house as someone else suggested. I would not move to Kelowna — sounds like a guilt trip there. I would draw your pension and keep building up your portfolio and in a few years, you could increase it a lot (start investing in stocks). I would not withdraw anything from RRSP — live on pensions, rent, and part-time jobs. I had no pride — took some high paying stressful unpleasant jobs, and some more pleasant low paying jobs. Get gain or disability or whatever you can to add to the certain income. It worked for me, and now I am very comfortable, and will never worry again. I retired completely this year and am loving it.
    During all this time, I met many wonderful positive people and changed my life. It was stressful but it sounds like you can handle it. You also have family support and I am all alone. I hope some of this information applies and will be useful.

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