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Limited life expectancy and Pausing RRSP contributions
Climbing
218 Posts
I am a young woman, 41. I have limited life expectancy now, with metastatic stage 4 breast csncer. One doctor mentioned 1 to 2 years maybe. Who knows really? That is all a guestimation, as we all know. There could be advancements in medicine or I may remain stable for more years than anticipated. (or less..)

I currently have a good pension and good chunk of RRSPs that I deposit into on a monthly basis. In also have some company stock RRSPs. For my personal RRSP contribution of $400 per month.
I went from working full time to being on short term disability at my company. My disability has just now dropped to 80% of my prior wage. In August it drops again to Long Term Disability, which I anticipate will be even less but not by much more.

I'm wondering if it makes sense to pause my $400 per month RRSP contributions due to the fact that I don't anticipate that I will be retiring at age 65.. I don't think that I will be alive that long, however it don't know if it is foolish to cancel this contribution. Or does this make the most sense because I can ensure that I have enough money for my mortgage and daily cash flow and bills while now receiving less income due to my decreased wages from LTD.
13 Replies
Climbing
218 Posts

I am also looking into getting Critical Illness Insurance. Does anyone have experience with this type of insurance? Is it worth getting a plan due to my health diagnosis?

JenG
257 Posts

@Climbing Ugh, those are some tough decisions! I don’t have any answers. But I would recommend a financial planner, if you don’t already have one. Obviously it’ll have to be someone special, who is comfortable talking about death, so maybe ask family/friends/colleagues if they have good suggestions?

Based on some other members experiences, you may not be as near to death as you might think. But we don’t ever really know, I guess. Maybe you could halve your contribution and see how that feels? The financial planner we work with always talks about personal comfort around money. So if it feels better to you to have x dollars always available (cash) then do that.

take care,

jen

Climbing
218 Posts

Thanks. It's a tough decision. I just don't want to screw myself over somehow. I've already booked a consultation with my financial planner. I really want to get my finances sorted so I feel better. I'm thinking that I'll somehow work a way out to have a bit of extra cash flow for now to make up for the loss of income due to being on disability. If I am able to make some wise decisions now it will help me.

DMT
208 Posts

@Climbing I would be asking about taking money out of the RRSP. As long as it doesn’t mess up your disability payments. Great that you are meeting with your financial planner, they should be able to help you figure it out, especially if you are struggling to make mortgage payments etc. Another good resource would be an accountant.

S2020
1401 Posts

@Climbing

Yes, it is a tough decision. On one hand, there is the doctor’s prognosis which, as you said, is a guesstimation, because no one really knows. On the other hand, there are the people here at Cancer Connection and in day-to-day life who have surpassed the prognosis given to them, and are living full and productive lives with or without physical limitations so there is reason to hope that those of us who have been given a short prognosis will surpass it, too.

At the same time, there are the financial matters to consider and the uncertainty makes it difficult. JenG and DMT have given helpful suggestions. I will add two resources that may be helpful:

Financial Planning After A Cancer Diagnosis

https://wellspring.ca/online-programs/programs/all-programs/be-well-talks-financial-planning-after-a-cancer-diagnosis/

Money Matters-Ontario Program

https://wellspring.ca/online-programs/programs/all-programs/money-matters/

I hope you find something useful there, Climbing. We are here for you, too.

Climbing
218 Posts

Thanks everyone. I've got some time to look at the best possible options. For critical illness insurance what I have to check with the company is if it will even be eligible for a preexisting condition. Its offered through both my bank and employee work company. But don't know about the preexisting thing, it may disqualify me possibly.

Possibly I could take a lump sum off my exisiting RRSPs. My other thought was reduce or pause my monthly 400 contribution to my RRSPs. I have a debt from legal fees that is under $10,000. I don't want to burden my partner with this debt so paying this off is important to me. I also want to look to make sure my partner is set up to be able to manage our mortgage if I were to pass away.

So many things to consider. My priority is paying off that amount of debt and having some cash flow to make up for my reduced wages and ensuring my mortgage will be managed.

Kuching
459 Posts
Climbing‍ It’s a tough decision. If the extra money will save you from stressing over monthly bills, I would go for it.

When my husband died 2 years ago, I sold our house, and that’s basically what I’m living off. I have stage 4 lung cancer, so I figured I had 5 years absolute max. So I budgeted for 10 years, just to be safe. That way, I can relax, and know how much I can spend each month without going over budget. If I’m still alive after 5 years I’ll have to come up with a plan B, but right now I don’t see any point in scrimping and saving for a nonexistent future.

The bank hooked me up with a financial planner (although I really didn’t want one), but she didn’t seem to get the concept of short-term investment. She kept trying to talk me into stuff that would pay off in the long term, and I kept saying “I don’t have a long term”. I hope you have better luck!
Climbing
218 Posts

@Kuching, thats exactly it, so much. I don't see the point of any significant long term investment. If I can finagle a bit of funds here and now it will do me better than having all this money socked away. I just have to come up with a plan. I view it the same way you do. I could plan for more years than what I expect.

BellaBlue
52 Posts

These are hard decisions with multiple variables so talking with a financial advisor is key. There are some that don’t sell any products they just provide advice on your situation.

You mention that you have a good pension and already have invested a lot into your RRSP. Have you considered how much you will really need in retirement?

I hope you can put some of your financial worries aside and enjoy your life now. If you were to stop those payments for a year and spend them on yourself, would it make much of a difference 20 years from now? If your prognosis changes or there a new breakthroughs you can always start saving again.

Climbing
218 Posts

I agree completely. I think I need to adjust my mindset a bit with regard to spending and saving and just how to do this is what I'm now really thinking about. For example I have a tight spending budget. This has allowed me to contribute a lot to my RRSP savings but now that doesn't make as much sense. I want to have a bit more “fun money” for spending now and enjoying life. I want to be able to take my kids out for dinners more often and not be so tight about spending. I need to shift my thinking a bit, and my spending. Still be responsible, but roll with the changes and do what makes sense.

Hi there Climbing,

I recently had the exact same conversation with my oncologist… I basically asked him to tell me what his computer program says when he puts my statistics into it… and the result was that I am not going to make the 5 year mark. He agreed that I should retire but cautioned me to not be frivolous because he doesn't want me to be washing windows to make ends meet.

Having said that I am now drawing enough money to make sure my monthly bills are covered. The very last thing you need (or any of us for that matter) is stress we can avoid.

You need someone to help you with the math here and I would suggest that you have a chat with your financial planner and your HR people from where you work. Find out what that magical number is and go from there.

I am not particularly worried about having a ton of money left over for when I am not able to enjoy it… you should not as well, take care of yourself.

A&L

Puffin
60 Posts

@Climbing Perhaps you can redirect into a TFSA for the time being. The money would be easily accessible to you if you find you have need of it and you would still be saving.

I took out Critical Illness insurance before I got my cancer diagnosis. It paid out a reasonably large sum of money (although I guess what is large is relative) and covered travel expenses for appointments up to a limit of $1,000 - which I've used up within a year with two rounds of 5-day-a-week five weeks of radiation but it was welcome as every bit helps. I don't think it will cover a pre-existing condition, however you can check.

Hope you get some good information to help you make decisions and hope you will be around (much) longer than expected!

Puffin

Climbing
218 Posts

Hope for the best, and prepare for the worst is what they say! 🙂

Thanks everyone for your advice. I am going to talk to a financial planner soon. At the very least I'd like to free up a bit of extra cash flow for my budget so I can enjoy some of life's finer details 😁 and not be such a stickler for spending, lol. I'll look into the TFSA also. I'm sure there's some kind of arrangement I can make to figure out my financial needs.

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