Author: Maurie Backman

It’s always a good idea for married couples to be financially aligned when it comes to saving for retirement— even if there’s an age gap in the relationship and one spouse has a higher income or more savings.

Let’s say you’re 53, five years older than your spouse — you may have more savings because you’ve been in the workforce longer and have extra years of investment gains. And you may have higher earnings at this point in your career.

But you also plan on retiring sooner than your spouse. How do you ensure everyone’s financial needs are met? What happens if the marriage crumbles? It’s important to take a fair and strategic approach to saving for retirement in the coming years.

Prioritize the right accounts

Since the goal is likely to maximize your retirement dollars, figuring out which accounts to prioritize is an important part of a smart savings strategy. The first question to ask yourselves is whether each of you is eligible for a workplace retirement plan like a RRSP) that comes with an employer match.

Employer matching is essentially free money, so it’s important to maximize them when you can. Your first goal should be for each of you to contribute enough to your workplace plan to snag your employer’s match in full.

From there, you should aim to contribute the maximum each year to any tax-advantaged accounts like RRSPs and TFSAs. You can prioritize which accounts to fill up first based on past returns, portfolio fees or investment flexibility.

That said, TFSAs have lower annual contribution limits than RRSPs. They currently max out at $7,000 while RRSPs max out at $32,490 or 18% of your annual income.

Either way, if your income or personal retirement savings are far ahead of your spouse’s, then you may want to cover more of your joint household expenses out of your paycheque to allow them to pump extra money into their retirement accounts. This assumes that you’re on track to have plenty of money to retire a few years ahead.

In case things go awry

You might feel good about your marriage now, but it’s important to keep in mind that things change, and divorces can happen at any age.

Gray divorce — sometimes called silver divorce — refers to couples over the age of 50 deciding to end a marriage, and it’s on the rise.

Laws vary by location, but absent a prenuptial agreement, assets acquired during marriage are typically considered marital property in many jurisdictions across the country. That means each spouse could have rights to a portion of contributions or gains to retirement accounts made during the marriage.

So, even if you end up getting divorced where one spouse has a much larger retirement savings balance than the other, the assets could end up being split — whether equally or equitably. Couples may be able to decide how to divide their assets within a divorce settlement agreement, but it must be agreed to by a judge.

Even if you plan to spend the rest of your lives together, it’s never a bad idea to cooperate now and create a plan that’s fair to both of your futures.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

When people think about their retirement years, their primary concerns tend to focus on financial matters.

In fact, Allianz Life recently found that 64% of Americans are more worried about running out of money than death. It also found that 70% of Gen Xers worry about depleting their nest eggs.

Given that many of them are in their 50s and rapidly approaching retirement, that’s not exactly a surprising statistic. But while you might expect retirement to throw you for a financial loop, it could also mess with your mental and emotional health.

Here are some things that could catch you off guard during your first year of retirement — and what to do about them.

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Fighting off boredom

A 2024 MassMutual survey found that 67% of retirees are happier than when they were working. However, 8% report feeling less happy, and boredom could be a significant factor.

In fact, 16% of older Americans say retirement is more boring than they expected. If you’re struggling to fill your days, you may want to consider getting a part-time job, volunteering or easy side hustles that could get you out of the house.

Unexpected health issues

In retirement, it’s easy to fall into a more sedentary lifestyle when you don’t have to leave the house for work.

The National Library of Medicine states that "physical activity and sedentary behavior are major risk factors for chronic disease. These behaviors may change at retirement with implications for health in later life."

The research further states that, while retirement can be associated with both positive and negative changes in physical activity, the latter can lead to a steady decline in health.

If you find yourself falling into an idle pattern at home, start adding physical activities to your calendar. It could be anything from a 15-minute walk each day or taking up tennis lessons with a friend once a week.

Travel may not be as much fun as you’d anticipated

While 63% of older Americans say travel is an important retirement goal, many find it less fulfilling than expected. According to Merrill Lynch and Age Wave, more than 40% of retirees travel less than planned — often due to health limitations, fatigue, or the unexpected stress of logistics.

Flight delays, crowded airports, and the physical toll of navigating unfamiliar places can turn a dream vacation into a draining experience. Even changes in diet, climate, or sleep routines can take a toll as we age.

That doesn’t mean you should give up on travel altogether — but it helps to adjust your expectations. Start with shorter trips to test your stamina, and build flexibility into your plans. You may also find that low-key destinations or trips centered around comfort and routine are more satisfying than chasing constant adventure.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

A lack of purpose

In a recent Transamerica survey, 79% of retirees reported having a strong sense of purpose in life, which means roughly one-fifth of older Americans may be struggling in that regard.

If you feel lost in the absence of a job, you may want to dedicate some time to volunteering for a cause that’s meaningful to you.

And it’s worth trying, as researchers at Columbia University found that volunteering greatly reduced the odds of depression among those who are struggling.

It can strain your relationship

Some couples find themselves less happy in their relationship during retirement, mainly because they’re not used to spending so much time together without a break.

According to Psychology Today, there is a trend of decreasing marital satisfaction after people retire. So, if you and your spouse seem to be getting on each other’s nerves, it may be time to find some hobbies you can pursue separately.

Discuss your feelings and work together to support each other through the transition to retirement. Retirement can be a major adjustment for couples — but open communication and a willingness to adapt can help turn the challenge into a new chapter of connection.

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Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

At 60, if you have $1.2 million saved for retirement, you have more than double as much as most of your peers, according to Statistics Canada.

But even though that’s a lot of money, it’s important to manage your sizeable nest egg carefully. You could try to live off of dividend income from your portfolio, or draw down your total portfolio over time.

Living off of portfolio income alone

A 2024 CPP Investments survey found that 61% of Canadians are more worried about running out of money during retirement.

The nice thing about living on portfolio income in retirement is that you aren’t touching the principal, meaning it should, in theory, hold steady or grow rather than shrink.

But it takes a lot of principal to generate sufficient income to live on, especially when dividend yields are as low as they are today.

The average S&P 500 dividend yield is currently just 1.27%. Even if you assemble a portfolio of individual stocks with higher dividend yields, you may only be looking at 5%.

For a portfolio worth $1.2 million, that’s $60,000 in annual income, which may or may not be enough to maintain your lifestyle.

Of course, it’s not a good idea to keep your entire portfolio in stocks. A safer bet is to split your assets between stocks and bonds, which could produce a little under a 5% return. It is doable, but whether the income suffices depends on your income-related needs.

Keep in mind you’ll have CPP benefit, as well. With the average retired worker collecting about $808 per month or up to $1,433.00 if you delay receiving it, you could be looking at up to $17,200 in benefits annually.

When you combine these government pension earnings with your investment portfolio income that works out to just over $77,000 in retirement income, each year.

But there’s one big caveat: While living on your portfolio income allows you to preserve your principal investment portfolio, to a degree, neither growth of that portfolio nor income generated from the portfolio are guaranteed.

Market volatility means your stocks could fall in value, eroding your principal. Stock dividends aren’t guaranteed the way bond interest and principal are guaranteed, assuming you hold the bonds to maturity.

The other risk of an income-only approach is that you could lose purchasing power over time due to inflation, which drives living costs upward. Assuming the income you earn from your portfolio holds steady at $60,000 per year, this may be adequate when you start retirement, but find it doesn’t stretch far enough a decade or two into retirement.

The “total return” approach

Another option is to live on income and principal from your portfolio — the “total return” approach — as you whittle down your principal while enjoying dividends.

This is a more flexible approach. You can sell principal assets and take advantage of market gains. As your portfolio grows, a total return approach gives you access to more annual income, making it easier to keep up with inflation.

Here’s how this might work. Say you have $1.2 million and you decide to follow the 4% rule, drawing down 4% of your principal annually to ensure your savings last 30 years. In your first year of retirement, you’d receive $48,000 of annual income. If inflation then rises 2% the next year, you’d withdraw $48,000 plus another 2%, or $960, for a total of $48,960.

As your portfolio gains value, you can keep adjusting your withdrawals for inflation, making it easier to keep up with the cost of living.

The 4% rule is just a guideline. There are other factors to consider as you determine your withdrawal rate: market conditions, your investment mix, and your life expectancy.

For example, Morningstar found that a 3.3% withdrawal rate was optimal for retirement savings in 2021; 3.8% in 2022; and 3.7% in 2024.

This means that while the “total return” approach offers more flexibility, it requires an ability to constantly adjust to market conditions and your personal needs. It’s a good idea to enlist the help of a financial adviser who can help you adjust your withdrawals as needed.

In this approach, too, if your portfolio loses value, you may have to withdraw less temporarily until the market settles. It’s wise to have one to two years’ worth of living expenses in the bank so you can leave your portfolio alone for a period of time if need be.

It’s also important to have income-producing assets in your portfolio that help it gain value from year to year. Dividend and interest income could help offset market losses.

So all told, no matter which approach you take, the right investment mix is crucial.

Sources

1. Statistics Canada: Assets and debts held by economic family type, by age group, Canada, provinces and selected census metropolitan areas, Survey of Financial Security (Oct 29, 2024)

2. Y Charts: S&P 500 Dividend Yield

3. Government of Canada: CPP Retirement pension: How much you could receive

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

The U.S. fertility rate may not be as weak as in other developed nations around the world, but nevertheless in 2023 it reached a historic low, according to Pew Research Center data.

It figures: the economic case for having kids has maybe never been harder to muster, as inflation — housing and child-care costs, especially — has pushed parents to their financial limits.

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But not having children carries its own risks. The Pew data finds that 26% of child-free Americans aged 50 and up frequently worry about who will care for them as they age. And 19% worry extremely about being lonely.

If you’re nervous about aging alone, here are some steps to take now.

1. Ramp up your savings

Being child-free has a major benefit — you don’t have to take on the expense of raising a child. The USDA puts the cost of raising a child from birth through age 17 at $233,610 for children born in 2015. Given recent inflation trends, it’s more than fair to say that that figure has grown exponentially since it was last calculated. The money you aren’t spending on child-related costs is money you can save and invest in a retirement account.

And remember, even older parents continue to provide financial support to their children. A 2024 Savings.com survey found that 47% of parents with grown children provide them with some form of financial support. And almost shockingly, the average amount comes to $1,384 per month.

If you’re 50 or older, you’re eligible to make catch-up contributions in an IRA or 401(k). Not having to worry about helping grown children pay their bills could make those catch-ups far more feasible.

2. Establish a social network

Aging without a support system isn’t easy. But one thing that may help is surrounding yourself with people of a similar age who can provide you with the company you need.

Put some focus into creating a network, whether through volunteer work, writing clubs or community events. You’ll want to be well established with relationships and a social routine long before you retire.

If you’re looking for convenience as well as community, you may consider a 55-and-over community. Many of these facilities are loaded with amenities that include fitness centers, tennis courts, swimming pools, and more that are instrumental to helping retirees keep busy.

Of course, one drawback to these communities is the cost, which can range from a more reasonable $1,500 a month all the way up to $4,000, according to AssistedLiving.org. But it could pay to prioritize this expense in your budget if you know you’ll be entering retirement without grown children to lean on.

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3. Reduce the hassle of home maintenance

Aging alone could mean facing mobility and health challenges. One big source of stress for seniors is maintaining their homes. You may not have the physical ability to mow the lawn, remove snow, and do other types of upkeep once you’re well into retirement. So to that end, it pays to eliminate as much home maintenance as possible.

Again, a 55-and-over community could be an attractive option to avoid this expense. Often, these communities feature condo-style living so that you’re only responsible for maintaining the interior of your home, while your monthly HOA fee goes toward exterior maintenance.

If one of these communities isn’t what you want, consider downsizing out of a larger home and into a smaller space that requires less work. It could also be a good idea to buy a one-story home in case climbing stairs becomes an issue down the line.

4. Buy a long-term care insurance policy

One of the scariest things about aging alone is reaching the point when you simply can’t perform daily tasks without assistance. In the absence of having grown children to step in and help, it’s important to be prepared for long-term care. One way to do that is by putting insurance in place to help defray the often-astronomical cost.

Genworth reports that the average annual cost of an assisted living facility is $64,200, while a home health aide costs $75,504 per year. A semi-private nursing home room, meanwhile, has an average yearly price tag of $104,025.

Meanwhile, the median retirement savings account balance among Americans 65 to 74 is $200,000, according to the Federal Reserve. Costs like these have the potential to bankrupt a retiree with just the typical savings, so it’s important to have insurance as a backup plan.

The ideal time to apply for long-term care coverage is in your mid-50s. This makes it more likely that you’ll qualify for a policy with premiums you can afford. It’s possible to secure coverage beyond your mid-50s, but the older you get, the harder and more expensive it might become.

In addition to these specific tips, consider sitting down with a financial adviser and talking through your retirement concerns. They may be able to make the process of aging alone easier from a money-related perspective.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Personal finance expert Suze Orman didn’t grow up wealthy — she worked her way through a number of challenging jobs and learned how to invest before becoming the success she is today.

Orman is a firm believer that everyone deserves to live without financial stress — both during their working years as well as in retirement. To achieve that goal, Orman is a fan of living below your means, always having a financial safety net, and working toward financial independence.

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But doing that takes time and effort.

As Orman says, “Financial independence is not something we snap our fingers and have materialize right then and there. It is the result of a process that we create and then commit to seeing through.”

If your goal is to achieve financial independence to the point where you’re able to retire early, the right tools could set you up for success. To that end, here are three accounts Orman recommends putting in place as soon as possible.

An emergency fund in a high-yield savings account

You never know when you might face a surprise expense or a period of financial hardship. That’s why it’s important to have an emergency fund — money in savings to cover unplanned bills, or to take the place of your paycheck for a while if that becomes necessary.

Unfortunately, an early 2025 U.S. News & World Report survey found that 42% of Americans do not have an emergency fund. In addition, SecureSave, a fintech Orman co-founded, reported in August of 2023 that 63% of workers do not have enough emergency savings to cover an unplanned $500 expense.

At the very least, it’s a good idea to save enough money in an emergency fund to cover three to six months of essential bills. However, Orman would prefer that you save more.

“You know that I want you to have far more than three months of living costs set aside. One year is my sweet spot advice for being prepared for major financial setbacks,” she said.

An emergency fund could also be an important component of your early retirement strategy. If you retire before you can access your IRA or 401(k) penalty-free, you can potentially dip into your cash reserves to pay bills (though ideally, that money should be saved for unplanned expenses).

You can also use your emergency fund to cover expenses during periods when the stock market is down and it’s a bad time to tap your portfolio.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

A retirement account

The number of Americans who are nearing retirement without savings is alarming. AARP found last year that 20% of Americans 50 and older don’t have any money socked away for their golden years.

In addition, the Federal Reserve puts median retirement savings among Americans 65 to 74 at just $200,000 as of 2022.

Orman says the key to building a strong retirement nest egg is to start saving when you’re young — ideally, in your 20s. The sooner you fund your retirement account, the more time that money has to grow.

Orman also thinks people should save at least 15% of their income for retirement when they’re younger (and beyond). And if you want to retire early, you may even want to aim higher.

If you have access to a 401(k) plan, it can be particularly advantageous to participate — and max out if possible. This year, that means contributing $23,500 if you’re under 50, $31,000 if you’re 50 or older, or $34,750 if you’re between the ages of 60 and 63.

One easy way to boost your 401(k) savings is to claim your employer match in full. If you’re not sure what that entails, ask your benefits department.

You should also know that your employer match won’t count against your contribution limit. So if you’re 29 and want to contribute $23,500 out of your paycheck, and your employer matches your first $2,500 in contributions, you can put in $26,000 this year.

An investment portfolio

The nice thing about retirement plans like IRAs and 401(k)s is that they give you a tax break on your money. With a traditional IRA or 401(k), for example, your contributions go in tax-free and investment gains are tax-deferred.

The problem with these accounts, though, is that you’re required to wait until age 59 and 1/2 to take distributions. If you take an earlier withdrawal, you’ll typically face a 10% penalty. And a penalty like that could easily eat away at your savings.

That’s why it’s important to invest in a taxable brokerage account if you think you’d like to retire early — though you won’t get any IRS benefits, your account will also be unrestricted. You’ll be able to take withdrawals whenever you want and contribute as much as you want in any given calendar year.

Orman says it’s important to be strategic with your investments — and to be mindful of your asset allocation at different stages of life.

"For many people, as they near retirement, it can make sense to reduce their reliance on stocks if they want a smoother ride," she said. "But just because you had 80% or more invested in stocks when you were 40 doesn’t mean you need or must keep that much invested in stocks when you are 65 or 75."

To be clear, you shouldn’t reduce your stock exposure at a certain age so much as at a certain point before retirement. Generally speaking, the five-year mark is a good time to start moving out of stocks and into bonds, which tend to be more stable.

This doesn’t mean you should dump your stocks completely as retirement nears. But you may want to limit your portfolio to 50% or 60% stocks so you’re not overly exposed to market volatility at a time when you’re ready to start tapping your investments for income.

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Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

It’s not uncommon for couples to have different financial goals. But when they’re excessively nice to one another about their disagreement, much like the goofy gophers from Merrie Melodies, it can become a source of conflict.

That’s the case for newlyweds Arie, 30, and Athena, 31, who have been married for nine months. The couple spoke to financial guru Ramit Sethi about their dream to buy a house during an episode of I Will Teach You to Be Rich. But the albatross around their necks is that Athena isn’t ready.

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It’s not as if the two are constantly fighting like Disney’s Chip and Dale. Quite the contrary — much like Warner Brothers’ Mac and Tosh they’re almost too polite about it. And Sethi thinks that’s a problem.

More than a matter of conflicting goals

When Arie and Athena discuss their disagreement about money, their respect for one another is palpable.

Before coming on the show, Athena wrote to Sethi saying, "I don’t see how we will ever be able to buy a house and have kids, our dream, and travel — my dream. We can work hard, but I’m not sure what we need to do to make both dreams a reality."

As Arie explained to Sethi, he sees a house as a place to raise a family: "It represents freedom, privacy, a safe place," he said.

Athena admitted she wants to support Arie’s dream, but doesn’t want to be house-poor.

"Sometimes when you buy a house too early, you feel so restricted in every other area," she explained, adding she’s worried that owning a house will mean making sacrifices.

Along with the house-poor fears, Athena has debt and does not earn a stable income. But her husband is confident that buying a house is attainable once she nets a more stable income, and he helps her pay off her debt.

Even though they’re married, the couple does not have a shared bank account. When pressed, Athena told Sethi that while she thinks having combined finances would make life easier, she admitted that financial independence is comfortable because then they’re each empowered to manage their own money.

Sethi wasn’t convinced. He said he felt Athena wasn’t truthful on the topic of combined finances.

"What I’m seeing is agreeableness taken to an extreme, where you rewrite your own needs to fit someone else’s comfort," Sethi said, adding that Arie and Athena are overly polite to each other. That’s good for some parts of the relationship, but it’s not going to resolve their financial woes.

Instead, he said he’d like to see them be more honest and allow for conflict so they can get their finances in sync.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

Reaching a compromise

A recent Ipsos poll found that 34% of Americans say money is a source of conflict in their relationships. Additionally, almost 25% of couples say money is their greatest relationship challenge, while 45% of respondents say they argue occasionally about money, according to a Fidelity survey.

It’s important to discuss those conflicts respectfully and arrive at a compromise. And it’s also important not to err on the side of caution out of respect for one another. That’s something Sethi said is unhealthy, as it could lead to resentment.

If you find yourself in a similar situation with your partner, start by identifying your goals. In this case, Arie wants a house as soon as possible, while Athena wants to travel. But their shared goal is to start a family.

First, they could track expenses by making careful spending decisions together. They can set up three buckets, with one being focused on a down payment for a home, a second for travel and a third bucket for child care expenses. Along with that, couples can do regular check-ins to assess their spending habits and ensure they’re sticking to their goals.

Couples can also turn to a counselor or financial advisor if money is a source of excessive conflict. It’s good for partners to treat each other with respect when there’s a financial disagreement. But don’t confuse being respectful with casting your own needs aside.

As Sethi warned, that’s not going to do either spouse any good and if anything, acting overly polite like the goofy gophers Mac and Tosh might impede reaching your goals.

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• Rich, young Americans are ditching the stormy stock market — here are the alternative assets they’re banking on instead

Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

A 2024 CPP Investments survey found that Canadians think it will take $900,000 to retire comfortably, a 29% increase from the year prior.

But a 2024 Statistics Canada report revealed that the median nest egg that Canadians have saved for retirement is $573,040. So clearly, the typical retiree has a large gap to overcome.

If you’re retired with a $3 million portfolio, you’re clearly ahead of the curve. Not only do you have way more assets than the typical Canadian senior, but you also have more than the $900,000 per person that’s supposed to make for a comfortable retirement.

But you may be wondering if it pays to hire a financial planner to help manage your retirement portfolio. And the truth is, there are pros and cons to getting financial help.

Using a financial planner

If you have $3 million in assets, a paid-off home and no other major financial concerns, you might assume that you don’t need a professional to get involved. But there’s a reason 25% of Canadians have a financial adviser or planner, per research from CIBC and FP Canada.

The upside of working with a financial professional is that you’ll have an expert who isn’t emotionally attached to your money offering advice on how to manage your assets. That could be invaluable, especially if life ends up throwing you a curveball.

Things may be going well for you financially right now. But what if your life circumstances change, or your health declines and you wind up needing long-term care?

If you’re uninsured, you could be looking at spending anywhere between $3,500 to $30,000 per month for a home health aide, a Scotia Wealth Management report found. A financial adviser or planner can help you not only prepare for these types of costs, but manage them as they arise.

Also, while you clearly have a decent understanding of saving and investing to have amassed $3 million in time for retirement, there may be some blind spots in your portfolio. A financial professional can help address those and make sure your portfolio is set up to not only produce income, but withstand a major market event or a period of rampant inflation.

Furthermore, if you have $3 million, it’s feasible that you may be in a position to pass on an inheritance, and the value of $3 million today is not the value of $3 million in the future, especially if inflation soars. A financial adviser can guide you on estate-planning options so you’re able to make sound decisions for the type of legacy you wish to leave behind.

Finally, working with a financial adviser could help you feel more secure as you navigate your senior years; it takes the pressure off you to be the expert and to stay current.

Managing your finances solo

The obvious downside to working with a financial professional is that there is an additional cost involved. And that cost can vary depending on who you use, where you’re located and the fee structure your adviser employs. If you manage your finances on your own, you won’t have to pay a professional any fees.

Let’s say a financial adviser charges you a fee of 1% of assets under management. For a $3 million portfolio, you’re paying $30,000 a year for help you may not need.

Granted, because many financial advisers get paid as a percentage of assets under management, they’re motivated to grow your portfolio so they get paid even more. But once you’re retired, you may not need portfolio growth so much as stable income. And if you’re already getting that, there may be little sense in bringing in an adviser.

If you’ve been able to comfortably build and manage your portfolio all of these years, then you may be perfectly equipped to continue doing so — especially if you’re a savvy investor with a pulse on the market who understands the importance of diversification.

Furthermore, while a financial adviser can offer guidance on estate planning, you’ll typically still need an attorney to create a will or trust (or whatever tool you use to pass down an inheritance). So while a financial professional can perhaps steer you toward your ideal option, you’re probably going to be looking at a separate attorney fee anyway.

Before you make your decision, it could be worth sitting down with an adviser or two and seeing what they have to say. But if you’ve gotten to $3 million and are managing this well, you don’t necessarily need to hire someone for extra help at this point. Just be sure that before making any major money moves, you’re as informed as possible. You’re essentially your own adviser.

Sources

1. CPP Investments: Nearly 2 in 3 Canadians worry about retirement savings: survey (Oct 30, 2024)

2. Statistics Canada: Assets and debts held by economic family type, by age group, Canada, provinces and selected census metropolitan areas, Survey of Financial Security (x 1,000,000) (Oct 29, 2024)

3. Cision: Most Canadians are going it alone when it comes to financial planning: CIBC and FP Canada™ Poll (x 1,000,000) (Nov 27, 2023)

4. Scotia Wealth Management: Why aging at home is unlikely for many — and how to change that (Jan 9, 2024)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

On June 18, NBC 10 reported that prosecutors are investigating a Burlington County, New Jersey car dealership.

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Autosmart on Route 73 in Palmyra was served a search warrant and investigators took license plates from the company’s garage and boxes and computers from the office.

Prosecutors could only confirm that the dealership is under investigation and did not speak to specific charges. They did, however, tell the news station that they’d received several complaints that customers were scammed at the dealership.

What’s interesting, though, is that NBC 10 was already looking into Autosmart after a viewer reached out with a problem she is facing. And the recent investigation could be related to it.

What happened?

Susan Noble asked NBC 10 to investigate an issue related to a car she bought and financed last September through Autosmart.

"I bought a used car from Autosmart in Palmyra," Noble told NBC 10. "They said they would work with me to get the monthly payment that I wanted at the price I wanted … they said, ‘You can buy the car and in a couple of months you can refinance with us.’"

Noble said she financed the purchase with American Credit Acceptance (ACA) and went back a few months later as planned to refinance.

“They said they sent the payoff check to the first company that I financed with,” said Noble. Payoff amount is the total needed to satisfy a debt, including interest and fees.

But then ACA started texting Noble saying her monthly payment was due or late. She also couldn’t get the title to her car.

Noble said ACA told her they never received the payoff payment for her loan from Autosmart.

“They didn’t actually do it, but they continued to make monthly payments on my behalf,” she explained.

That left Noble with two car loans in her name totaling over $50,000.

This, she said, is hurting her ability to buy a home.

"They know how hard I work. They know that I’m a nurse, they know I’m a single mom … for them to do this to me is just unconscionable," she told NBC 10, getting emotional.

NBC 10 reached out to Autosmart to find out why Noble’s original loan wasn’t paid off when she refinanced through them. A representative from SmartSource, who said they were a consultant for Autosmart, responded and blamed the financial institutions involved.

On June 3, that representative said the payoff payment would be processed and take 10 days to be paid in full. But Noble said that didn’t happen.

"I would like to see them, you know, held accountable," she told NBC 10.

The news station was not able to get an answer about that or the investigation into Autosmart. ACA and Autosmart also did not respond.

The Burlington County Prosecutor’s Office issued a statement on the Autosmart investigation saying, "No charges have been filed. Members of the public who wish to speak with an investigator concerning their experience with this dealership should contact us at [email protected]."

It’s worth noting that Autosmart also has an “F” rating on Better Business Bureau with over 30 complaints filed against the business.

One complaint from April 2025 says, "I traded in my 2021 Kia Seltos in December of 2023 and that car loan has not been settled. We signed a contract stating the they would pay the loan off. The company has been paying monthly until January 2025. I have been calling and seeing why that loan hasn’t been paid. The loan has defaulted which has severely damaged my credit score along with the loan company seeking the vehicle and or payoff."

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Auto loan refinancing scams

What Noble says happened to her may be an honest mix-up or a sign of a serious mismanagement of funds and fraud. Auto loan refinancing scams are common enough for the Federal Trade Commission to have a page dedicated to them.

Scam refinancers either promise they’ll get you lower payments on your auto loan, but ask for an advance payment, or they tell you to make your loan payments directly to them and say they’ll pay your lender for you while they negotiate a deal.

“In reality, scam refinancers aren’t negotiating with your lender or anyone else,” says the FTC. “If you make your monthly car payments to the refinancer instead of your lender, those payments will likely go straight into the scammer’s pockets — not to repay your loan. You may only find out about the fraud when your lender contacts you about missed payments, or your car is repossessed.”

These scams hurt borrowers and can make their financial situations even worse. For one thing, falling behind on an auto loan could put you at risk of having your car repossessed. It could also damage your credit score, making it harder to borrow money the next time you need to.

For this reason, it’s important to be careful when dealing with refinancing companies.

Dealer tactics to look out for

Auto dealerships have different ways of luring in credit-challenged buyers. They can promise low vehicle prices and low financing rates only to hit you with surprise costs.

One good way to avoid getting taken for a ride is to read the fine print on your loan documentation. Sometimes, auto dealerships will offer a seemingly attractive interest rate on an auto loan but hit you with hidden fees that drive your costs up.

Another popular tactic is the yo-yo scam, where you’re told your auto loan is final and you’re allowed to drive the car away. Then, days or weeks later, you’re told that your financing didn’t come through, and that your only option is to sign a new loan with less favorable terms or give back the car.

You should know that any time you’re pressured to sign a car loan quickly, it should be considered a red flag. Another thing you should know when you’re shopping for a car is that you do not have to finance it through or from the dealership.

It pays to shop around for your own auto loan to compare rates and there may be advantages to dealing with a lender directly.

It’s also a good idea to research dealerships before moving forward with a car purchase. Look at the Better Business Bureau, as well as sites like Yelp, to check for complaints and reviews.

However, if you do get scammed, file a report with the FTC as well as your state attorney general’s office.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

If you’re worried about a near-term recession, you’re certainly not alone. According to an April survey conducted by business outlet Chief Executive, American CEOs revealed their take on the current economy, and it found that 62% now anticipate a slowdown or recession in the next six months — up from 48% in March.

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If you’re worried about a recession and recently came into, say, a $10,000 inheritance, you may be wondering whether you should use that money to pay off a $9,000 credit card balance or put the money into an emergency fund.

The truth is that paying off debt and boosting savings are both smart moves at a time like this. Let’s dig into the pros and cons of paying off debt versus increasing savings so you can decide what to do.

Paying off debt

The longer you carry debt, the more it can cost you. So, if you use your $10,000 inheritance to pay off your credit card balance, you’ll potentially save yourself a boatload of money on credit card interest.

Plus, if a recession hits, it could result in more widespread layoffs. And if you end up losing your job, not having credit card minimums to meet could make that situation a lot less stressful.

On the other hand, if you use your $10,000 inheritance to pay off $9,000 in credit card debt, you’ll only be leaving yourself with $1,000 for savings purposes.

The fact that you owe $9,000 on credit cards means you may not have much in the way of savings to begin with. But a mere $1,000 cushion isn’t likely to get you very far if you lose your job and are unemployed for months. So, while paying off your credit cards solves one problem, it could open the door to another.

Keeping the cash as an emergency fund

A $10,000 emergency fund could be extremely handy if you were to lose your job in a recession.

Generally speaking, it’s a good idea to have at least a three-month emergency fund to get through a layoff without having to resort to more debt. If you keep that $10,000 in your savings account, it could spare you from having to add to your credit card balances and rack up even more interest charges.

Also, it happens to be that savings accounts are paying generously right now because interest rates are up.

If your $9,000 credit card balance happens to be on a 0% interest credit card with a good number of months until that 0% rate goes away, you could keep the money in savings for a bit, earn some interest, and see how economic events shake out.

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Of course, the downside of this approach is that if you’re not looking at a 0% APR on your credit card debt, keeping the money in savings could mean racking up extra interest needlessly.

If your credit APR is 24% — which is roughly the average APR on new credit accounts these days — and it takes you three years to pay off your balance, it could cost you around $3,700 in interest alone.

Plus, the reality is that even if a recession hits, you’re not guaranteed to lose your job, so you may not need the extra emergency savings immediately. On the other hand, you know for a fact that your credit card balance is there, and that the longer it takes you to repay it, the more money you stand to lose to interest.

Taking a balanced approach

A $10,000 windfall gives you a lot of leeway to better your financial situation ahead of a recession. One thing you could do is split that money between your credit card debt and your emergency savings.

The upside of this approach is that you get more protection in case your job disappears, but you also whittle down your credit card balance to a point where your minimum payments should shrink and your interest charges should be reduced.

The downside, though, is that you may feel like you haven’t fully tackled the goal of paying down your debt completely or building your emergency fund completely.

Putting $5,000 toward your debt still leaves you with a $4,000 balance, which is not a small sum. And while $5,000 is a nice emergency fund, it’s probably not enough to float you for three months either.

Then again, 40% of Americans can’t cover a $1,000 emergency expense from savings, according to U.S. News & World Report. With $5,000 in savings, you’re in a much better place than people in that boat, even if you don’t have a “complete” emergency fund.

Ultimately, all of the choices above are financially responsible ones. You’ll need to think about how vulnerable your job and industry might be to layoffs in the event of a recession. You’ll also need to consider what your credit card debt is costing you before you can make a choice that’s right for you.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.