How Do you See your Retirement?

Whether you want to collect passport stamps abroad or do sudoku puzzles in the comfort of your home, your retirement is worth preparing for, especially if you want it to live up to your desires and lifestyle.

Does retirement make you anxious? Would you rather not think about it? Don’t worry – you’re not alone. More than half of Canadians aged 50 or older (56%) still don’t have a retirement plan, according to a study commissioned by the Ontario Securities Commission.

Turn “Retiring? Good luck.” into “Retiring? Lucky you!”

What if we helped you join the 44% of Canadians who have prepared for retirement? Ready? Take a deep breath and centre yourself… before asking yourself the first question: what do you want to do when you retire?

“That’s the first question you should ask yourself, because the answer will influence a good part of your planning,” reveals Mohamed Wakkak, financial planner and senior advisor, investment and financial planning at the National Bank.

Your financial means will, of course, shape your retirement, but so will your dreams and aspirations. There are as many types of retirement as there are people!

For example, some people opt for phased retirement to have more free time, while others look for a part-time job to stay active or make a little more money. Others still choose to volunteer while travelling the world.

Other variables factor into your unique situation. Are you a homeowner or do you rent? Will you still be paying off your mortgage? Do you plan on selling your property once you retire?

Don’t want to retire with champagne taste on a beer budget?

Saving today with your future in mind isn’t always easy. While that’s true, you can still find a balance between living comfortably today… and in the future! Here’s how.

• Get a handle on your current budget: Make a list of your expenses and eliminate the ones you think will no longer apply once you retire. For example, you may pay off your mortgage by the time you retire, or you may decide to keep just one of your two cars. These are all parameters that influence your cost of living.
• Determine the budget you will need to meet your goals upon retirement: Keep in mind that when you retire, you will have new expenses for things like travel, entertainment and healthcare.
• Take stock of your planned income upon retirement and the amount that will be available to you in your current savings plans. When will you apply for the Old Age Security pension? How about the Quebec Pension Plan or the Canada Pension Plan? Will you qualify for the Guaranteed Income Supplement? Do you have a pension fund? If so, how much will you receive? What kind of investments do you have? What is your investor profile, and does it match your retirement plans?

Find a clear path instead of hitting a wall

Some aspects of retirement planning, like those mentioned above, are up to you. But that doesn’t mean you have to figure things out by yourself: talk to experts in financial planning and retirement. They will be able to share their advice and provide support throughout the retirement planning process.

“The benefit of meeting with an expert and making a retirement plan is that you can see where you’re going. It’s the moment of truth,” says Mohamed Wakkak. “People who are afraid they won’t have enough when they retire may realize that they have more leeway in their current budget than they thought. Conversely, people with big dreams who haven’t started planning and saving enough will realize it, allowing them to start an action plan to reach their goals all the same.”

If you want to grow a garden when you retire, make sure to cultivate your finances

“It’s never too late to prepare for your retirement!” Mohamed Wakkak reassures us. “There is an exception: when one reaches a mature age (over 50 years old) with no assets, savings or pension funds, it’s difficult to plan a very comfortable retirement. Even in this case all is not lost, but it becomes necessary to lower expectations and adapt one’s goals to one’s means.”

Of course, unexpected events in life require you to review your retirement plan regularly. Your circumstances and aspirations may change. Nothing is set in stone! The closer you get to retirement age, the closer the more specific your plan will become.

In sum, if you prepare with the help of retirement specialists, your chances of achieving the retirement of your dreams, while living comfortably today, will be bigger. How about you? How do you envision your retirement?