How to invest on autopilot before I'm too old to deal with it or it's left to my spouse? | Page 4 | Investing | Discussion forum

My situation is very unlike what many relate here. I am 70, and have no real estate, family or anyone I would trust with a Power of Attorney, so everything really rests on my shoulders. As for goals, I don't really have any except to not be homeless.

I've never used a financial planner, or trusted one; I'm pretty confident in my ability to learn and understand things. I'm just beginning to research RRSP wind-down, and find it much changed from what I learned earlier as a result of legislative evolution. Taxes are not a big factor for me, but income that will slash my benefits very much is.

I've always been debt-free since paying off my student loans. I'm comfortable now, but my future planning is greatly clouded by having a very low-cost home which I might someday have to leave in the future. I wish I'd been able to qualify for a co-op but singles can only get one-rooms at all the places I looked into. Going to market housing in Vancouver, or a care home, would easily double or triple my housing costs.

I wonder what sort of thinking would help, other than being very conservative and not spend money frivolously. I don't gamble, drink, have a car, cable TV or expensive phone plan. I could spend more on clothes or furniture, but am always very hesitant to spend cash on rapidly-depreciating assets.

The government life expectancy table rates me at 11-22 years. My parents made it to about 63 (nonsmoker) and 79 (smoker). I've had some health problems but seem stable now. When my brain goes is another unknown, but both parents remained lucid to the end.

It's a puzzle, in terms of set-and-forget planning.
RetirEd

RetirEd said
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I wonder what sort of thinking would help, other than being very conservative and not spend money frivolously. I don't gamble, drink, have a car, cable TV or expensive phone plan. I could spend more on clothes or furniture, but am always very hesitant to spend cash on rapidly-depreciating assets.
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Consider spending some on happiness:

Norman1 said

Some of the money could be used to increase one's happiness by eliminating some irritants in one's life. Perhaps, one is not at their best from not sleeping well because of a lumpy, worn out mattress. That could be fixed for under $1,000. That approach to money and happiness is explored in the Maclean's (February 13, 2006) article Money Really Can Buy Happiness, Study Shows.

I don't think autopiloting is a good idea. One can't aim a ship or plane and expect it to arrive at its desired destination with no course adjustments along the way. That's because we cannot predict something as simple as the crosswinds for the next several hours along a route. Economists aren't able to do better as well.

NCC1701Z said

You might want to investigate annuities. Being a male 70+, with no family (assume no need for leaving an estate) you'd get the maximum with no guarantee option. Currently paying $678/month per 100k. That's like getting 8.1% return!
A little less with a 10 year guarantee.
https://lifeannuities.com/articles/2023/2023-best-annuity-rates-canada-20220428.php#male_annuity

For housing I'd consider moving out of the city where rents are much less. Maybe even consider Alberta which may have better seniors' benefits and long term care.  

I won’t classify it as a 8% return. You are getting part of ur principal back and lose 100% when one goes…..

It does not matter what one calls it. The dead are not concerned about residuals while the living care about the availability of more cash flow indefinitely. Annuities are perfect solutions for folks like RetirEd, and the current interest rate environment is the time to consider it for some, if not all, of the portfolio.

@RetirEd: I know you aren't going to tell us the details of your financial situation, so it's impossible to give advice relevant to that.
However, a couple of more generic suggestions:

Look into the wait lists for those co-ops and any seniors housing that is affordable. Likely the wait lists are quite long. In Toronto, the wait list for city-owned 1 BR apt for seniors without subsidy is about ten years last time I heard. Ten years ago it was only five years. Then get yourself on the wait lists. If you fear homelessness, a studio apt could look grand when you are older and creakier.

Yes, "retirement homes" are quite expensive, probably more than you can afford. They are ideal for people who can no longer do the cooking, cleaning etc. and may need staff around to help with a few things, such as medications. I hear that long term care homes akaa nursing homes, are expensive in BC. Check out the situation in other provinces and consider if it makes sense to establish residency elsewhere while you still can.

If you don't appoint a POA, the government will be the guardian of you and your money if you are not able. BC used to have a system of bonded "lay persons" who could do this job but not sure if that is still in place and don't know much about it.

If you don't take any action while you can, you may regret it.

I've no interest in annuities but if your only gaps are income insecurity over time plus desire for autopilot, those truly are your only needs, then 100% annuities might meet the bill nicely. Done, you can spend your remaining years on other than money matters.

One concern to me would be if inflation ends up being persistently high your purchasing power might noticeably decline over the years and then your goal of income security hasn't been met.

savemoresaveoften said

The reason I am against 100% annuties is the loss of flexibility when one needs a bigger amount for whatever reason / emergencies. One never knows.  

It obviously depends on how much one has in total but yes, I would agree that one wants to keep something available for flexibility. Whether that is $30k, or $100k, or..... depends on the individual.

The problem with post #61 is that if RetirEd has no one he can trust to be his POA, he is betting on keeping his mind lucid until the day he drops dead. Unfortunately, few of us are that lucky. In a majority of cases, we have a slow deterioration in physical and/or mental capacities with loss of mental capacity being the worse of the two. We are likely to start making significant errors of judgement without even necessarily knowing we are making significant errors of judgement. It is then too late to scramble around and find someone trustworthy (or not) to pick up the decision making.

RetirEd is going to need to address his situation at some point. Annuities get mentioned here because they are foolproof once they are in place and they will continue to operate until the day he dies.