The Effect Of Serendipity On Retirement

By Guest | April 25, 2013 |

This is a post from reader Eric as part of our retirement series.

When Robb first broached the idea of submitting a write-up relating to retirement preparation and its post-implementation offshoots, my first reaction was that, if he’s looking for an example, I can probably qualify for the role of ‘bad example’.

While I, (rightly or wrongly), don’t consider myself particularly capricious, ‘planning’, (such as that practiced by those with a more analytical inclination), has never been my forte.

Related: How My Retirement Plans Got Derailed – Big Time!

At 70 years of age I tell people I’m retired; which from the viewpoint that I hope I never again have the need to be subjected to the drudgery of employment, is essentially true.

The fact is though, the longest ‘serious’ job I ever had lasted for thirteen years, over half of which was spent in Saudi Arabia, and when my late wife & I returned to Canada, (having accumulated sufficient funds), I up and quit at age 46.

But perhaps I’ve started the story at the penultimate chapter.

The Beginning

I was born, at the height of World War II, ( I don’t remember any of it, although I’m sure, as a baby, I attempted to drown out the noise of air raid sirens), in London, England.  I qualified, through a nationwide classification examination at age 11, to attend one of the better schools in London.

Not too long thereafter, having been identified as a malcontent, I added truancy to my resume.

End result – expulsion.

Too young to be inflicted upon the world, I was ‘demoted’ to a lower level school; on the first day there I was introduced to another guy, with a similar background, who had also just transferred in.

End result – expulsion.

My ‘schooling’, (if one can call it that), was essentially curtailed at age 12, and I was introduced to menial labor before I was 15.

Not the most auspicious beginning, perhaps.  Ah, but things were different then.

From England to Australia

At age 17 I emigrated from England to Australia sans family, whereupon, due to my relative youth, I was nominally declared to be a Ward of the State, (which was the last contact I had with any State representative until I had to apply for a passport a couple years later).

In the interim I (ineffectively) picked grapes, skinned kangaroos for pet food (lasted half a day at THAT one), worked as a butcher in a plant making a ‘Spam’ like product, and saved money as a laborer on a dam in the middle of nowhere in the north east part of Western Australia.

I went around Australia by car, thence England by ocean liner on a six week voyage across the Pacific.

Related: Escape To The Countryside

I didn’t like England any better upon my return, so after working as a butcher to garner a little cash, I took off overland with a couple of Australians back to OZ.

The Long Journey To Canada

I travelled across Europe, through the Middle East, Pakistan and India.  I stayed in Sri Lanka, (then Ceylon), for a month, celebrated my 21st birthday there, then bought a black market ticket on a small French ship as far as Singapore, with an ongoing flight to Darwin.

I worked in Melbourne driving truck.  I saved some money and caught a Greek liner to Athens……..overland London……applied for Canadian immigrant status in London, and within a couple days was on my way to Montreal.  That was April 1965.

I landed a job with Westinghouse in Hamilton.  A year later, three of us drove around the U.S., down to Mexico, back to the States, and I flew back to OZ.

I stayed there for three weeks before deciding I preferred Canada.  I caught the very same Greek ship back to Athens and on to Toronto.

Circa 1969, after a sojourn in Europe, I went back to Toronto, and back to school where I was ‘awarded’ a piece of paper in Business Administration that enabled me to land a job that I could have done without acquiring it.

Related: What If You’re Not University Material?

Serendipity

A while later I was promoted and offered a position in Saudi Arabia, (serendipity), where I stayed seven years plus, (the first three on single status).  We saved our money; this was at a time of high interest rates, and as a designated ‘non-resident’ I paid no income taxes.

We had R&Rs five times every two years.  My late wife and a friend sold tickets on our compound for Air France, so our travel was free, and generally upgraded to First Class.

When the Saudi contract ended we bought a place on Salt Spring Island, B.C. and I severed my connection with the workaday world.

At the time we returned to Canada, 5-year GICs were paying in the region of 11.75%.  Yes, there was inflation, but as savers rather than spenders we found its impact to be minimal.

Retirement!

I’ve frequently said, (without being asked, oftentimes), that the only reason I worked in the first place was so that I could stop.

We sold our house, (at a profit) and took to full-time RVing after eight years on Salt Spring Island.  But in 2001 my wife was diagnosed with cancer and she died in early 2002.

Related: How This Couple Spends Their Retirement Travelling

A couple years later I was fortunate enough to meet the lady to whom I am now married – my ‘child bride’, (10 years younger than me) – a software developer then, and a retiree now.

We were in Botswana three years ago, (obligatory package trips to Mexico/Costa Rica in between, thank you TD Visa Travel Card), and next month we’re off to the Czech Republic.

Final Thoughts

We live off less than our interest income and CPP/OAS combined, and hope never to touch our principal (if those in our wills get the lot, then good luck to them).

Related: Are You Counting On An Inheritance?

We’re not spenders, we prefer to cook our own meals and almost never eat out unless we’re away from home.  We’re happy and satisfied.

If there IS a point to relating this story it’s just to indicate that you never know how a turn left or a turn right will alter your life.  You’re going full circle regardless, so take the turn – either one.

Senior Discounts Vanishing From Our Banks

By Boomer | April 23, 2013 |

When my husband turned 60, being the cheapskate that I am, I was eager to check out what senior discounts we could expect from our TD Bank.  I wasn’t expecting a whole lot – and that’s exactly what was offered, not a whole lot.

Related: Free Chequing Account Comparison

When I worked for the bank the seniors plan – Plan 60 – offered:

  • Unlimited transactions
  • Free cheques
  • 0.5% bonus interest on savings accounts and GICs
  • No charge for money orders, drafts and travelers cheques
  • $5 discount on safe deposit boxes

To my surprise this plan was eliminated in March 2012.  The new seniors benefits are:

  • 25% discount on selected accounts that offer unlimited transactions, but with fees of $14.95 – $29.95 and minimum balance requirements of $3,500 – $5,000.
  • 0.25% bonus interest on two savings accounts, one of which calculates and pays interest (.05%) semi-annually.  Both of these accounts are no longer for sale.

I’m sure the other major banks are not far behind in eliminating their seniors’ perks.  For now, RBC and BMO offer free basic accounts to seniors and they’ll automatically apply a $4 seniors discount once you turn 60.

Related: Why More Banks Are Opening On Sunday

CIBC and Scotiabank customers must ask for senior discounts, it won’t be automatically applied to their bank account.  Scotia offers seniors one free booklet of 50 cheques per year, however CIBC no longer offers free cheques to seniors.

It seems like we’re a lot better off staying with what we already have.

Seniors are too wealthy (?)

In a Globe and Mail article written by Rob Carrick last year he gives this quote from David McVay of McVay and Associates, a financial services consulting firm:

“Why are we discounting banking services for what turns out to be our wealthiest customers?”

In the same article TD spokesperson Barbara Timmins says:

“We have to balance (diverse situations) with the bank’s longer term needs for continued growth.” 

Considering the bank has almost all of my money, I’m quiet and cause no trouble, do the majority of my transactions on-line so I don’t require personal attention, have signed up for e-services so the bank saves on postage and envelopes, and I use my own paper if I need to print a statement, it saddens me that they think it will greatly impact their profitability and growth to give me a free chequing account.

Related: Using Epost To Manage And Organize Your Bills

There are alternatives

We also have accounts with PC Financial.  My husband likes the unlimited debit transactions as opposed to the ten I have with TD.

I’m sure he was fed up with me always stating “Let me know if you need to withdraw money because I only have one more available debit this month.”

By contrast look at what I get with them:

  • Free cheques
  • No fee chequing account with unlimited withdrawals (plus at least .05% interest)
  • High interest savings account paying 1.35% vs 1.1%
  • 5-year GIC at 2.081% vs 1.85%

Plus these accounts are available to everyone, regardless of age.

Concluding thoughts

Some of the perks of reaching our “golden years,” besides life experience and age defying wrinkle creams, have always been discounts offered to seniors.

Related: How CARP Benefits Aging Canadians

Thank goodness for the merchants that still offer them:

  • I can shop at The Bay and get a 15% discount on the 1st Tuesday of each month.
  • The last Thursday of the month saves me 20% at Shoppers Drug Mart.
  • I can eat at McDonalds and Dairy Queen for 10% less.
  • Alas, I will have to wait a few more years to get the 30% discount at the Cineplex (65 years)

Otherwise I might suspect that businesses no longer have any respect for their elders.

Aeroplan, Avion, Avios, Adios

By Guest | April 21, 2013 |

This is a guest post by reader Charles Newell, who has recently done some extensive research on redeeming travel rewards.

Much has been written on these pages about rewards cards but little with regard to what you can do with the rewards once you’ve got them.

In October of 2009 we switched from two CIBC Aeroplan Gold cards, that we used to accumulate Aeroplan points, to one RBC Avion card.

We decided that since neither of us was working it made sense to only have one reward credit card, save some fees and have one account.

Related: Best Travel Rewards Credit Cards

Avion Points

RBC offered 15,000 get started points for their Avion program so off we went with a card costing $170 per annum for the two of us.  It’s a Visa Infinite Avion Card.

We’ve now built up a total of about 98,000 points.  Avion allows you to book with any airline and 65,000 Avion points will buy an economy ticket price to anywhere in Europe costing up to $1,300.

The rest of our banking is with HSBC and we have an HSBC Premier MasterCard which is used by other family members for our family business.

It builds up points at the same rate as the Visa Avion card, one point for each dollar spent.

Related: Scotia Momentum Visa Infinite – Cash Back King In Canada

Redeeming Points: How Much Are You Really Saving?

We are planning on a trip to Europe from September 2nd to Dec 2nd.  We’ll start off in northern England, move to London then go to the South of France from London.

We decided to price out flights as follows:

Vancouver to Manchester returning to Vancouver from Paris, a multi-city or open jaw trip.  Using Lufthansa and 65,000 Avion points one ticket will cost $609.80.

Using the balance of the Avion points will reduce the single ticket cost to $276.90.

If we buy a second ticket to match it will cost $1840.80.  The base price is $1,231 and the balance is $609.80.  The 65,000 Avion points cover the $1,231 base price.

Related: How This Couple Spends Their Retirement Travelling

We found $1,840.80 a bit expensive so we decided to check out return flights to London.  Flights from Vancouver to London can be had from Air Canada via Calgary for $1,219 – that’s $622 less than the multi-city Lufthansa flight.

That cheaper flight booked through the RBC Rewards program costs $628.87 – that’s more than the expensive multi-city flights!

It’s because the base flight, which uses the 65,000 points, is only worth $590 – not $1,231 like the Lufthansa multi-city flight.

We also tried on a ticket starting in one city in Canada and returning to a different one, that is not eligible for the much touted $1,300.  Either you must come and go from the same place or just use the points at 10,000 point per $100.

That’s a huge variation in the value of those points – $590 to $1,231 – with up to $1,300 being available and being advertised.

Values are far less complicated with the HSBC program, where they simply compensate you at the rate of 10,000 points for every $125 spent.

Related: How To Profit From Loyalty Programs

The London return ticket would cost roughly 97,500 HSBC points.  Using all the Avion points (98,290) the same ticket comes in at $295.

RBC is not encouraging or rewarding cheap travel.  Avion points rewards are $100 for 10,000 points.

Avios Points

Avion also offers a conversion to British Airways Avios program.  That allows you to switch Avion points to British Airways Avios points.

There are occasionally bonus rewards offered.  I called Avios and asked what availability they had under their point system, and there was nothing for flights to London until the end of October.

Final Thoughts

So, in summary, if we choose the less expensive route, we will save money and Avion will save money.  We’ll save a few hundred dollars on the ticket price and they will only have to pay $590 instead of $1,231.

Related: Air Miles Travel – Redeeming For Flights

That free ticket cost $170 annually for the rewards cards.  $170* 4 = $680.  It’s that or buy an iPad mini with the points……also not worth that elusive $1,300.

What’s been your experience when it comes to redeeming travel rewards points?

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