John Stapleton talks planning for retirement on a low income
Metcalf Innovation Fellow John Stapleton has found that the fundamental assumptions we hold about retirement don’t apply to low-income retirees.
For one, their incomes tend to increase after retirement due to government pensions. And as their new benefits are taxable, they often pay higher rates of tax than they did when they were working.
“It’s almost as if potential low-income retirees live in a different world, where their situation is the polar opposite to what is faced by most retirees,” Stapleton has said.
Yet the advice that these retirees receive from mainstream sources is often solely designed for higher-income earners. To address this gap, Stapleton runs ongoing information sessions at Toronto libraries and help low-income people plan for retirement.
Stapleton provides a snapshot of these library presentations in a new series of short videos with Globe and Mail personal finance columnist Rob Carrick — noting some of the issues facing low-income retirees and his advice for mitigating them.
He explains the increasing rate of Canadian seniors living in poverty, how the RRSP can actually hurt low-income earners’ ability to save, and why the Tax-Free Savings Account offers up strong benefits for savers of all income levels.
Stapleton has released several clear language resources on low-income retirement planning. They are available to read on the Open Policy website.