B8 G THE GLOBE AND MAIL | WEDNESDAY, JULY 23, 2025 GLOBE INVESTOR | REPORT ON BUSINESS W hen Alison Mazurek was ex- pecting her first child in 2013, she and her husband were liv- ing in a one-bedroom Van- couver apartment. They asked themselves a common question among expectant parents: Do we really need to buy a house before the baby arrives? As long-time city dwellers who fre- quented nearby parks, beaches, and coffee shops, they decided to stay put, choosing proximity to those amenities over a home with more space farther out from the core. But that wasn’t the only factor behind their decision. Vancouver had become the most expensive housing market in Cana- da, mimicking the unaffordability in major cities around the world. “People in Europe live in tiny apart- ments. People in New York make it work. Like, why can’t we make it work in Van- couver?” said Ms. Mazurek, a small-space design consultant behind the blog, 600sqftandababy. “I think a lot of families wouldn’t want to be in a one-bedroom, but it’s doable and livable,” she said. “We only have one bath- room to clean at least.” Now raising two kids in a one bedroom and den, Ms. Mazurek has inspired others through her blog to reimagine having fam- ilies in smaller properties as expectant and new parents grapple with the rising cost of living. Although many Canadians consider starting a family a precursor to buying a house, experts say focusing on affordabil- ity and financial stability is the best way forward during that stage of life. Laura Bishop, a Winnipeg-based finan- cial planner with IG Wealth Management, says she’s seeing more couples deciding to wait to start a family until they get their fi- nances in order – and even then, many who are expecting children are not buying homes. “Renting is not a delay, it’s a strategy,” says Ms. Bishop. “You got to budget for ba- by first before committing to a mortgage.” While the average age of a first-time homebuyer today is just under 35, the over-35 demographic is rising at a faster rate, according to the latest data from Sta- tistics Canada. Most under that age who are buying have parents co-signing the mortgage, Ms. Bishop says. Since buying a home is one of the most significant financial decisions people make, Ms. Bishop advises her clients who are working toward that goal to build an emergency fund to cover three to six months’ of expenses. She says she’s also seeing her clients making do with smaller living quarters for longer and reframing expectations to stay on budget and on track with their savings goals. Claudia Richard did just that. At first, she was set on buying a two-bedroom home in Vancouver’s sought-after Kitsila- no neighbourhood when she was preg- nant with her first child in 2021. “I desperately just wanted to have a home that I could nest in,” she said. But Ms. Richard was caught in the buy- ing frenzy during the pandemic, and after losing out on two bidding wars, buying a home at peak prices became out of reach. In addition to the upfront fees when pur- chasing a house – including a down pay- ment, closing costs and moving expenses – she and her husband had to consider the costs of baby gear and monthly daycare. “When we had done our budgeting, we were aware of [these costs] but I didn’t quite realize how those numbers are ac- tually real,” said Ms. Richard. The couple resorted to renting in the neighbourhood during their baby’s first year until they bought their current two- bedroom townhome just a few blocks away. Now, after having a second child, they’re planning to convert the basement into an extra bedroom. “I think for a lot of us that grew up in a traditional house and yard, [we think] ‘I’m letting my kids down,’” said Ms. Richard. “But there’s advantages to living close to parks and shops and biking distance from everywhere. I can actually give my kids ev- erything they need.” On the other hand, Vancouver realtor Jason Lim says he’s seeing an “exodus” of young families sacrificing location and convenience for a bigger place outside the city. But what’s often overlooked in mov- ing further afield is the commute to work and proximity to schools, which some of his clients later regret. “I had a client move from the east to the west side of town and [they’re] now having to drive their son 45 minutes in traffic to school,” he said. “They didn’t think about that part.” Ms. Mazurek admits that opting for a smaller dwelling does come with trade- offs, the main one being privacy. “Head- phones go a long way in a really small space,” she said. Her common space-saving tips include removing closet doors to open a foot of space, hanging curtains, or using large- scale art on walls to shift focus away from the kids’ toys sprawled across the living room floor. “I think there’s a shift happening where maybe before, people were resentful that they couldn’t afford a single-family home in Vancouver or Toronto,” said Ms. Mazu- rek. “It’s like we sort of accepted that may- be that’s not going to happen for us [so] I’m seeing a lot more pride in families do- ing more with less. “I can’t fix the housing crisis, but I can still make a beautiful home for my family,” she said. Special to The Globe and Mail Buy a home before baby? Some parents say no Many Canadians link home ownership to starting a family, but experts say it may not fit your finances CATHY MIYAGI OPINION Claudia Richard and James McTurk play with their 4-year-old son, Teddy, and 10-month-old daughter, Rose, at home in Vancouver on Sunday. JENNIFER GAUTHIER/THE GLOBE AND MAIL The more you earn, the higher your retirement savings rate needs to be Your savings rate is higher if you earn more Age when saving for retirement starts. Level savings rate as a % of pay needed (single person) 5 10 15 20 25% 25 years 30 years 35 years 40 years Final pay $60,000 Final pay $90,000 Final pay $180,000 Assumes a replacement ratio of 70% for $60,000, 60% for $90,000 and 55% for $180,000 THE GLOBE AND MAIL, SOURCE: AUTHOR’S CALCULATIONS ASSUMING RETIREMENT AT 64 AND A NET INVESTMENT RETURN OF 5% I t would be handy to have a single, simple rule for how much to save for retirement. I used to think 10 per cent of pay was a good number, but the true savings rate varies enormously depending on pay level and on when one begins to save. The actual rate can vary between 7.8 per cent of pay and 22.5 per cent over and above contributions to the Canada Pension Plan/Quebec Pension Plan. The main reason that the savings rate is higher for high-income people is that CPP/QPP and Old Age Security pensions are geared for Canadians earning no more than the average national wage (about $70,000). The savings rates in the chart below are based on the following retire- ment income goals (including CPP/QPP and OAS). If your final year’s pre-tax income is $60,000, I have assumed a retirement income target of 70 per cent of the final five years’ earnings. For $90,000, the target is 60 per cent and for $180,000, it is 55 per cent. While some readers may think these income goals are too low, they might in fact be a little too high. At least, that is what I concluded in a previous edition of Charting Retirement. The assumed investment return also affects the saving rate. Here, I’ve used 5 per cent a year, net of investment fees. Achieving even this return might be a challenge in the future if interest rates stay low and if price-to- earnings multiples on stocks drop back to their historical mean. Finally, retirement age is an important factor when setting the savings rate. Here, I have assumed age 64. An earlier retirement age would require a higher savings rate, and a later age would lower it. I also want to touch on the situation for lower-income Canadians. Someone earning $40,000 a year in today’s dollars would have about $32,695 in take-home pay (after deducting federal and provincial income tax, employment insurance premiums and CPP contributions). Subtract another $1,700 for employment expenses (such as commuting and meals), and it brings net take-home pay down to $31,000 or $2,583 a month. This is almost exactly the same net after-tax income a 65-year-old reti- ree could expect, assuming the retiree receives $760 a month in CPP pension, $735 in OAS pension and $1,097 a month in GIS (Guaranteed Income Supplement). So someone who never earns more than $40,000 a year (in today’s dollars) might not need to save at all. The main takeaway: Higher earners who are not covered by a work- place pension plan should probably be saving more than they thought, and people earning less than the average wage as they approach retire- ment can probably save less. FREDERICK VETTESE The beneficiary: Virginia is an 81- year-old retiree living in a large Canadian city. After many hard years as a working single mother of two, she retired from her career as a data co-ordinator as she neared 60 and has been living the good grandma life ever since. Vir- ginia has four grownish grand- kids and a ton of very lucky and grateful friends. The inheritance: Last fall, Virgin- ia received a surprise phone call. “They said I was a beneficiary in a will and told me the amount. Thank goodness I was sitting down,” she said. Long story short: Virginia was gifted several hundred thousand dollars from an old (male) friend she met at work. In the almost 25 years since she retired, they stayed in touch via “nice dinners, long phone calls, visits to art galleries and theatres and museums.” (Was it romantic? “Oh, no, no, not at all. Nothing like that. We were just good friends with lots of mutual interests.”) Throughout their friendship, Virginia had no idea he had an es- tate of that size nor any indica- tion anything would go her way after his health declined rapidly during the pandemic. She was just one of many beneficiaries named in the will; her portion – somewhere in the mid-seven fig- ures – was a mere slice of a great big pie. What she did with it: After the initial shock wore off, a few weeks later, Virginia finally told her two children and then made a wise call to her accountant. “The first thing was tax implications and all that stuff, then I knew exactly what I had to give away,” she said. Though she might have made dif- ferent choices 40 years ago, Vir- ginia at 81 – who was “financially comfortable even before this” – decided to give (almost) every dollar of her surprise inheritance away. “I sat down at my kitchen table and made up a list of friends, rela- tives, institutions and charities that I thought would resonate with my friend,” she said. She put a lot of thought into designating each an appropriate amount, from $3,000 to $25,000, and wrote a personal note with each. “I told them each something about my friend and that this money was from him.” What they do with the money, however, is their choice. “I may have my ideas of what it’d be good for, but the money came without caveats or instructions or suggestions.” She didn’t ask, but some have shared how they will spend their gift: One friend is buying a set of hearing aids, an- other has first and last month’s rent to move, and another still is starting a business. Her respon- sible grandkids are putting their money in TFSAs and saving for a home. And did she include herself at all on the list of lucky recipients? “I did a few little renovations around my house that needed to be done,” she said. Day to day, she’s a bit more relaxed with cash and always picks up the tab just because she can. Her friend would have wanted it that way. The revelation: Though suffi- ciently flush now, Virginia’s me- mories of harder times remain all too clear. “When I was young and on my own, I’d sometimes be down to five cents in my chequ- ing account. Literally.” People helped her when they could, and now that she’s in a similar posi- tion, she considers it her duty to pay it forward. Giving away so much money is made easier when you don’t con- sider it yours to begin with. “I think of this money as a trust for my friend, and I use it as I think he would want me to use it,” she said. So just as he gave the money away with discreet dignity, that’s her plan, too. She’s hoping the ripple effect will go far and wide, and that those who benefited will be simi- larly generous when the time comes. What goes around comes around, and Virginia’s been lucky enough to land on the other side, where money isn’t as important as before. “For me,” she said, “the pleasure of giving is worth more than the money.” This retiree was shocked to find herself the beneficiary of an old friend’s will ROSEMARY COUNTER INHERITED [ CHARTING RETIREMENT ]