There are many retirees feeling they have not only been hit with an unpredictable future for their health but also an uncertain economic future with respects to their retirement investment savings.
Being forced to wait for the market to rebound is something most older investors have done many times in the past, with the 2008 financial crisis, and before that with the global stock market crash after Sep. 11, 2001 (9/11). I know it is devastating to see your retirement savings take a hit right now and the thought of “just waiting it out” is agonizing. But this is indeed what we must all do.
There are a few government benefits you can take advantage of if you are feeling the “financial pinch.” The Canadian Emergency Care Benefit provides up to $ 900 bi-weekly for up to 15 weeks and the Goods and Services Tax credit (GSTC) coming out this month will also provide some relief, with $ 400 for single individuals and $ 600 for couples.
Good news for those retirees accessing their portfolios this year is that the government has now reduced the minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25 per cent for 2020 in recognition of volatile market conditions and the impact on many senior’s retirement savings.
This will also apply to those seniors receiving variable benefit payments under a defined-contribution registered pension plan. Talk to your adviser to find out what your required withdrawals will be this year so you can plan for your expenditures.
For those who may owe taxes this year, the Canadian government will also allow all taxpayers to defer any personal taxes owing without interest or penalties until Aug. 31, 2020. The deadline to file your personal taxes has also been delayed to June 30 to make it easier for Canadians.
Christine Ibbotson is author of Don’t Panic: How to Manage Your Finances and Financial Anxieties During and After the Coronavirus and How To Retire Debt Free & Wealthy.
— Christine Ibbotson is author of Don’t Panic: How to Manage Your Finances and Financial Anxieties During and After the Coronavirus and How To Retire Debt Free & Wealthy. She also writes the Moneylady column.