Advice for seniors on how to downsize their stuff, the costs considerations of aging in place and a question on the principal residence exemption – The Globe and Mail

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Gloria Harding’s move from her condo into an assisted living apartment revealed just how much stuff a person can accumulate over a lifetime.The Globe and Mail

Over the past few months, Carolann Harding has been helping her mother, Gloria Harding, move from her condo into an assisted living apartment in St. John’s. The experience has uncovered just how much stuff a person can accumulate over a lifetime. “It’s been the process of going through piece by piece, drawer by drawer, box by box, and mom not realizing half the stuff that she had,” she says.

Fortunately, Ms. Harding and her mother were able to go through her accumulated items together, deciding who would get what and what could go. Some are forced to do that difficult task alone in the throes of grief.

“It’s easy to get rid of junk, but the hardest part is going through all the old stuff, finding things from my grandmother when she was a little girl,” says Ms. Harding. “What do you do to honour those memories of your grandparents and your parents and things like Bibles from 1900? That’s the kind of stuff I’m really struggling with. You can get rid of the junk but how do you sort and prioritize the sentimental things?”

The rise of retail and mass production since the end of the Second World War has put more things in the reach of more people than ever before. As a result, baby boomers have a lot of stuff they either need to downsize now, or leave to their heirs to handle it. Dene Moore reports

How moving to less-expensive city could give this couple more flexibility in retirement

With a house in Toronto and a government pension, Daphne, 55, is feeling comfortable – so comfortable she is thinking about packing in her $100,000-plus-a-year job in a couple of years and retiring. She and her spouse Michael, 52, would sell their city home and move to a less expensive locale where Daphne could eke out a living freelancing. They have a 16-year-old son. Michael, who figures he can work remotely, plans to stick with his $80,000-a-year job until he turns 60.

When she retires from work at age 57, Daphne will be entitled to a pension of $63,500 a year indexed to inflation, falling by $12,000 a year when the bridge benefit ends at age 65. Michael has no work pension. Their savings, apart from the value of Daphne’s pension, are relatively modest. Their plan is to buy a more affordable home outside of the Greater Toronto Area and they’d like to know the maximum they should spend on a house to buy outright and what should be kept as a nest egg. She also wonders whether it would be feasible to buy two properties, a house and a vacation place they could rent out on Airbnb when they weren’t using it.

They have yet to determine how much they will need to live on. “What will our budget be and what kind of lifestyle will we have, given these parameters?” Daphne also asks about a possible pension buyback. In the latest Financial Facelift column, Ian Calvert, vice-president and principal at HighView Financial Group in Toronto, looked at their situation.

In case you missed it

Why retirees should pay attention to the withholding tax

Withholding taxes are unavoidable in your working years since, for most employees, they’re automatically deducted every pay period. Being retired doesn’t exclude you from making remittances to the Canada Revenue Agency (CRA) on your retirement income, but there are more choices of how and when to pay the CRA that can impact your lifestyle.

Experts say the key is having a withdrawal strategy that considers your different retirement income sources and their tax rates, to keep more money in your pocket.

“You really have to think about cash flow planning when going into retirement, and where you’re going to draw from, to make sure you can pay your bills every month,” says Allison Marshall, vice-president of financial advisory support at RBC Wealth Management in Toronto. Joel Schlesinger reports

How to keep the peace when travelling with adult kids and grandkids

Travel consultant Marcia Proctor is suddenly getting a lot of calls from families looking to book intergenerational vacations. For example, she recently organized a February getaway to the Dominican Republic for three families travelling together – each including grandparents, parents and kids. “It’s a multi-family reunion,” she says.

After more than a year and a half with very few bookings due to the pandemic, Ms. Proctor, of Travel Agent Next Door Inc. in Toronto, is seeing many grandparents looking to travel with their adult children and grandchildren. Many want a respite from the isolation and loneliness from the past 19 months of pandemic restrictions and feel a need to reconnect with grandchildren they’ve watched grow up on Zoom calls.

According to Kiran Pure, a registered child psychologist from Dartmouth, N.S, multigenerational trips can be psychologically healing for seniors. “Travelling with grandkids is valuable to build connection and continuity in the relationship through shared quality time together,” Dr. Pure tells Anna Sharratt in this article.

What else we’re reading

The cost considerations of aging in place

Mary Deanne Shears is sitting tight. The 77-year-old Toronto-based former journalist had planned to downsize. But when the pandemic hit, she realized that the modest suburban Toronto home she once shared with her late husband was where she wanted to be. “I came to appreciate my garden in the past two years,” she says. It’s something she doesn’t want to give up.

Then there’s the financial impact of moving. “I couldn’t sell my house and find a condo downtown,” she says. “Everything is so expensive.”

Now that Ms. Shears has made the decision to stay, she hopes her savings will carry her through.

Although she has a defined benefit pension plan, she worries about the high costs of home care. She says she’s contemplated a reverse mortgage to free up funds in the future. “I have a fair nest egg – but it all depends on how long I have to live,” she says. “Most of us want to age in the home.” Anna Sharratt reports

What interests Angela Merkel as she heads into retirement

Germany’s outgoing chancellor, Angela Merkel, marked her 50th birthday by listening to a lecture by a neuroscientist – and her 60th with a talk by a historian.

As the famously cerebral politician ages, her interests are shifting away from the natural sciences on which she spent the first part of her career, Merkel told Reuters in an interview. Now 67, she said she planned to devote her retirement to the big questions of social and historical development.

“That’s the direction that my thoughts are increasingly going in,” she said. “How can we understand the course of history, how can we compare it at the global level? How has China developed over 2,000 years? What about Europe?”

Merkel has previously hinted that she might return to academia, but otherwise given few clues about how she will occupy herself on leaving the chancellery after 16 years.

Ask Sixty Five


My wife and I are retired. We have a cottage an hour away in the next province. She lives in town to look after the grandkids and I live at the cottage, building furniture in my shop. We get together 10 weekends a year and for a longer vacation in the summer. Can we consider each of these places our own primary residence?

We asked Mark Skeggs and Mark Chan, both vice-presidents of wealth planning at Gluskin Sheff in Toronto, to answer this one:

For a property to qualify as your principal residence in any given year, it must be “ordinarily inhabited” (i.e., lived in, even for a short period of time, during the year) by you or your spouse, common-law partner or child. Since one of you spends significant periods of time at each property every year, the ordinarily habited test appears to be satisfied.

It is possible to simultaneously own multiple properties that could qualify as a principal residence; however, as of 1982, a family unit (consisting of you, your spouse or common-law partner and children under 18) may designate only one property per calendar year as a principal residence for the purposes of the principal residence exemption (PRE). Accordingly, the capital gains realized on the other properties would be subject to tax.

Let’s consider a situation where you have owned the house in town since 1992 (i.e., 30 calendar years) and the cottage since 2002 (i.e., 20 calendar years). For the 10 calendar years between 1992 to 2001, when you only owned the house in town, that property would be considered your principal residence. For the remaining 20 calendar years – between 2002 to 2021 – you would have to designate one property per calendar year as your principal residence.

Generally, the property with the largest gain per year of ownership would be designated as the principal residence (it is important to note this designation does not have to be made until such time that a property has been sold). Following the previous example, assuming the house in town appreciated by $1.2-million (or $40,000 per year of ownership) and the cottage appreciated by $1-million (or $50,000 per year of ownership), you may want to designate the cottage as the principal residence for the calendar years in which both properties were owned in order to maximize the tax savings associated with the PRE.

As a result, two-thirds of the capital gain on the house in town (i.e., representing 20 calendar years out of the 30 calendar years owned that it was not designated as a principal residence) would be subject to capital gains tax.

If you have completed renovations and other capital improvements to either property, they may be added to the property’s adjusted cost base, which will in turn reduce the capital gain associated with the property.

Special rules may apply in certain situations, for example when a property was owned previous to 1982 and/or 1972, when the land exceeds one-half hectare in size and when the property has been used in part for farming or rental purposes. You should speak to a professional tax advisor in these instances.

Have a question about money or lifestyle topics for seniors, or want to suggest a story idea for the Sixty Five series? Please email us at and we will find experts and answer your questions in future newsletters.