Wired and a Talk With My Money Guy

Yesterday was the day to go down and get wired for my 24 hour heart monitor. They attached five sticky pads and electrodes to my chest and plugged them into a small pager size device that hangs on my belt. I was instructed to carry on as usual and return the device at 3:00 today (Friday).

Well, how do you "carry on as usual" with a bunch of wires hanging off your chest. Sleep was very difficult as every time I turned I had to deal with the wires and device. After about four hours sleep I was awake and reading news sites on the computer. I napped a bit more before finally getting up and making breakfast at 8:30. Now I am "acting normal", whatever that is.

Wednesday I went down for my semi annual chat with my money manager. He proudly showed me he was averaging 5.8% for me on my investments which is actually pretty good in today's financial climate. He also pointed out that I would be turning 71 in 2016 which is the year I will have to start taking minimum payments out of my tax deferred savings (called RRSP's in Canada). These payments will of course become taxable income in the year they are taken out. This money is what I have been calling my "Rainy Day Fund" and we have dipped into it a few times. $30K to buy the first motorhome, $40K when Norma had her dental implants and much smaller amounts several other times to cover unexpected or unusual expenses. The balance of this fund has not come down too much over the years because the fund has done fairly well as an investment. The problem with these deferred tax plans is that you can't defer them forever and eventually you have to pay tax on the principal as well as the amount they have gained within the fund. The hope is that your tax rate will be lower when you sell them than it was when you bought them and in theory this works but tax still has to be paid and that is always a pain. If I had to do it all over again I might seek out a better way, if there is one. Adding these payments to my pensions means I am bringing in more now than I ever did when I worked so in my individual case the theory does not work as well. Who knew? The only thing that saves me a little is "Income Splitting" between spouses in cases where one spouse earns more than the other. This little gift from the Canadian Government could be taken away at any time but if they did, they would have millions of old people waving pitchforks, canes and walkers at their gates.

I can take the money out monthly or annually, my choice. I guess I will take out the full annual amount in March and use about 30% of it to pay the increased income taxes in April. I don't know what I will do with the balance. Spend it foolishly, I guess.