Rather than downsize, retiring boomers hope to stay put

If you read the headlines, just about every urban boomer is leaving the suburbs behind and moving into condos or lofts in a trendy downtown area. Yet there's little evidence that most Canadians are actually that open to the idea of moving into a smaller residence as they grow older. A majority of Canadians aged 50 and over – 83 percent – said staying in their own homes and paying for home care is the most appealing option for them, according to Royal Bank research. Even then, while the majority of us want to ''age-in-place'', this doesn't necessarily mean that we expect to stay in the same house. Most people are attached less to a particular pile of bricks and mortar than to a local area – to a network of friends, services and familiar places. Among those who were already retired, a decision to move out of their home was most often due to a change in their health – 66 per cent – rather than to cash in on their home equity or get closer to restaurants. Remaining in familiar surroundings – in a home of their own, in their current neighbourhood and close to family and friends – is definitely how Canadian Boomers wish to live when future health changes occur,” says RBC head of retirement and aging strategies Amalia Costa. Then there's the emotional pain of scaling back. Many empty nesters find they lack the stomach or stamina to dismantle their lives. They'd rather hang on. They struggle with sorting through all those boxes in the basement or dread listening to adult children who want to keep the house where they grew up.And isn't always the financial bonanza they expect. With fewer square feet to heat, low and pay property taxes on, many downsizers assume they'll slash their monthly expenses. But unless you're willing to move to a part of the country with a lower cost of living, the savings may prove fairly modest.Do you plan on downsizing in the future or have you already made the move? How are things working out so

RRSP season is nothing to sneeze at

Enough about flu season – it’s time to stop sniffling and start seriously thinking about RRSP season. The deadline date for making contributions to the Registered Retirement Savings Plan for the 2012 taxation year is just around the corner on March 1. An RRSP is a plan that helps you save for retirement while offering you some other great tax benefits. For instance, deductible RRSP contributions can reduce the amount you owe on your income tax or even give you a bigger refund (depending on your income). And, as long as the funds remain in the plan they are exempt from tax as it grows. You don’t have to make one annual lump sum to contribute to an RRSP either. RRSPs can be made easier to carry through monthly payments that suit your budget needs. However, if you are considering making a lump sum contribution before the March 1 deadline but don’t have the on-hand cash, another option is to talk to your financial advisor about an RRSP loan. There is a maximum amount you can contribute to an RRSP based on your income and how much you previously contributed. You can contribute 18 per cent of your previous year’s income, up to a maximum of $23,820 in 2013. But keep in mind, if you didn’t contribute the maximum in previous years your deduction limit will be higher. Also, if you contribute to a workplace pension plan your deduction limit will be lower.You can set up a RRSP through your financial institution such as a bank, credit union, trust company or insurance company. You may also want to consider setting up a spousal or common-law partner RRSP. The bonus to this plan is that if the higher-income spouse or common-law partner contributes to the RRSP for the lower- income spouse/common-law partner then the contributor gets the short-term benefit of the tax deduction while the spouse or common-law partner receives the income and reports it on his or her income tax return. While we’re on the topic of income tax, the deadline for personal income tax is April 30, 2013 while those who are self-employed have until June 15 unless there is a balance owed and then the deadline is April 30, 2013. As with everything in life, make sure you do your research and find out more about Registered Retirement Savings Plans and the benefits. Click on the Canada Revenue Agency link for some helpful information on RRSPs. Will you be considering contributing to an RRSP this

How are you going to save in 2013?

If you’re like me it isn’t always easy trying to save money. It seems whenever I put a little money away into a savings account or a secret stash at home some unexpected expense always seems to arise. Car repairs, home repairs and uncovered medical expenses can pop up at any time. Begrudgingly, I am forced to dig into what little savings I have or choose to add onto my already pumped up credit cards. But I am optimistic. According to a new report from BMO Bank of Montreal, Canadians are planning to save on average about $9,859 this year. That’s an increase of $600 over the previous year. And how do they intend to save? Well, the majority are using a Registered Retirement Savings Plan (RRSP), 63 per cent; chequing account, 57 per cent; Tax Free Savings Account (TFSA), 49 per cent; high-interest savings account, 29 per cent; and Guaranteed Investment Certificates (GICs), 25 per cent. Ernie Johannson, Senior Vice President, Personal Banking, BMO, says it’s encouraging to see Canadians increasing their savings this year. While it's important to pay down debt - particularly high-interest debt - it's essential that households build themselves a financial cushion as well, whether it be for retirement or other goals. And just what are Canadians saving for? Well, the report, conducted by Pollara, indicates the majority are saving for vacations and for purchasing luxury items, entertainment and hobbies. Retirement and emergency savings tied for second spot. Other top things Canadians are saving for include home renovations (29 per cent); new vehicle (20 per cent); education (19 per cent); and a new home (15 per cent). The report also found that men plan on saving a little bit more than their counterparts by hoping to stash away $11,631 compared to the ladies with $8,091. And by province it appears that Albertans plan on saving the most with $18,035; followed by British Columbia, $11,109; Ontario, $10,465; Manitoba and Saskatchewan, $9702; Atlantic provinces, $6,698; and Quebec, $5,477. It’s always nice to be able to put a little away for a rainy day however, the study found that only half of Canadians polled feel they are saving enough to meet their goals. Some of the barriers to increased savings include high expenses (71 per cent); low income (65 per cent); and debt repayment (52 per cent). Now I can relate to that! Check out the full report here.Will you be saving money this