With an emptying nest, years of hard work – and maybe even some financial blunders – behind them, many Canadians in their fifties and sixties are either entering retirement age or get close enough to ponder serious retirement questions.

BNN spoke with three Canadians, in between the ages of 50 and 65, to get a sense of their financial situation, how they think rising interest rates might impact them, and what money worries are keeping them up at night (after all, Bank of Canada Governor Stephen Poloz isn’t the only one losing sleep).

Kathryn Shortt, 65, retired as a high school teacher a decade ago. While she was only in her fifties, Shortt decided she and her husband were in sound financial shape after working their way up in their careers. “I had taught for 31 years. I said to myself, ‘I have the rest of my life to live, so let’s go for it,’” Shortt says.

A few years later – with all three of her children moved out of their Oakville, Ont. house – Shortt and her husband downsized to a condo in downtown Toronto. “We were one of the first of our friends to actually take the leap and sell our big house, and even think about moving into a condo,” says Shortt.

Now, Shortt says that after years of being conservative and disciplined with saving their money in RRSPs and investments, they have been “a bit more gutsy in our old age.” The couple bought an 800-square-foot, two-bedroom condo just east of downtown Toronto as an investment, which Shortt says she expects to make at least $200,000 if the real estate market remains robust.

“That will put us in good shape,” Shortt says. “We’ve always done well on our own property that we lived in, but we’ve never bought one as an investment property. We’re really excited about it.”

Another big purchase Shortt is excited about? “We ordered a Volvo. We’re spending more money on it, but we thought, ‘What the heck, we deserve it.’ And why leave everything to our kids – they’re doing okay.”

How will higher interest rates affect your financial situation?

“They do affect us, especially because we have a home equity line of credit, which varies based on the bank’s rate. So, just recently, the rates went up and I noticed there was about $10 to $15 more that I had to pay in January, compared with last month. It doesn’t sound like very much, but it adds up. So we’re very much aware of interest rates. We don’t have to worry about a mortgage, where our kids’ generation does. We’re also concerned about our investments and how they’re doing if rates keep going up.”

What financial concerns are keeping you up at night?

“Nothing keeps me up at night. I worry more for my kids, for [their generation]. My son is renting a room from a friend in our building, because he can’t afford to pay $2,000 a month for a place himself in Toronto. Our daughter turns 30 in March, and she is married and having a baby in Vancouver. It’s even worse out there. They live right downtown [Vancouver], but they’re looking at moving to Squamish where they can get a three-bedroom townhouse for about $1,500 a month. Right now, they’re paying $1,900 for a one-bedroom, first floor unit. It’s ridiculous. It’s not me worrying about my life – it’s worrying about my kids’ generation and the kids I taught. How are they able to afford these places, even if you do have a great career? It’s hard.”

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Kimeiko Hotta Dover, 51, is a college professor who has been teaching for 27 years. The Markham, Ont. resident calls herself “blessed” not only because she has a full-time faculty position that comes with a defined benefit pension, but also because her spouse earns a high income.

“Together, we’ve also been saving in RRSPs, and we hope our Canadian pension will be there for us as well. And, we have Toronto real estate, which is holding up nicely,” Dover says, adding that they recently bought a condo in Ottawa where her eldest son attends university.

Dover says her original plan was to retire in her early 60s, but in the last few years she’s had a change of heart. On top of her full-time job as a teacher, Dover has started a side business teaching and treating clients with Reiki - the Japanese touch therapy technique for relaxation and pain relief.

In the next few years, after her two youngest children have finished high school, Dover says she may reduce her full-time teaching hours or retire early to focus more on her reiki practice.

“This passion of mine is generating real income, and I’ve started to think I can retire from the college sooner than I originally thought,” Dover said. “I love teaching but I don’t have as much flexibility right now. With reiki, I can teach from home, travel to a retreat - I can do it anywhere. I can choose my days and times and hours.”

How will higher interest rates affect your financial situation?

“It will affect us in terms of the mortgages that we are carrying. We have done well on variable rate mortgages, but we still have some principals remaining on both mortgages … I’m not presently worried, though. Seeing the difference in markets and how much more affordable homes are in Ottawa, if we don’t have to be in Toronto for employment we could cash out of our Toronto home. We could afford a nice property in a more central, urban location in a place like Ottawa, which would still be a multicultural, vibrant city to enjoy. We don’t want to be slaves to our house.”

What financial concerns are keeping you up at night?

“We have three children to get through higher education. So far, because we contributed to RESPs, we haven’t felt much pressure with the first one, who is in university now. But with two more coming along, we may notice it more.

“My husband and I have been so blessed because we have secure employment. I actually worry more with my children and younger colleagues and students. Everything seems to be more difficult ... That makes me really sad. I look around and see our younger colleagues work so hard - working contract to contract - and they aren’t able to carve out the same security that we have. How can people buy homes or commit to childcare, or have any kind of stability or future planning under those conditions? My husband and I are okay, but to what extent will we be called upon for our children, if they have tenuous employment?”

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Bernice Smith-Horne, 60, works in sales and marketing development at a Brampton, Ont.-based logistics company. She and her husband Ian are in a well-positioned for retirement, but Smith-Horne says she wishes they had started saving for their golden years earlier.

Smith-Horne’s savings plan was partly delayed by moves between Canada and the U.K. – where she was born. She moved back to the U.K. and didn’t start seriously using RRSPs until she returned to Canada at age 40 and spoke to a financial planner about getting a mortgage for her first home.   

"I never really believed in RRSPs. Now I really do believe in them, and I wish I had never taken money out from my earlier RRSPs," Smith-Horne says. "At 40, when returning back to Canada after a few years in the U.K., it was like, let's play catch-up."

Smith-Horne says she's benefitted from working with a financial planner, as well as being disciplined about regularly maxing out her TFSA and RRSP contributions. When Smith-Horne's mother-in-law passed away, the couple used their inheritance to top-up their RRSPs, she says.

“We worked with our financial planner to figure out a way that, when we retire, we can have the same lifestyle we're living now – and pay ourselves from our savings," Smith-Horne, who lives in Cambridge, Ont., says.

"We feel we're in a good position. We could retire now but then the question becomes, what will we do all day?”

How will higher interest rates affect your financial situation?

"If anything, it will benefit me because our spare cash will be making more money. We're done with our mortgage, and we never borrowed money other than for the mortgage."

What financial concerns are keeping you up at night?

"I don't want to reach 75 and [stock markets] all go down and - after I thought I had everything for my pensions set up - suddenly, my money is not worth that. I don't think anybody can predict that. We're trying to put as much money as we can into cash. Obviously, we don't keep it under a pillow, but we keep it for a rainy day and have at least a year's worth of money available to us. Whether that's right or wrong, I don't know, but that's my security. The world's not going to end - and if you look at history, things go up and down, but they will come back. How bad can it really be? I don't think the world is as gloomy as the media makes it out to be."