“Derek, I’m getting ready to retire, what should I keep in mind?”
In this ever changing market, it is best to do some serious thinking before retiring. Your investment portfolio is only one factor and it is important to consider other aspects you may not have thought of. I’ve helped transition many hardworking Albertans to retirement and I can say that every client situation is as unique as the client themselves. It all depends on your interests and how you envision your retirement.
I have heard numerous stories from clients who have worked for 30 years or more and once retire suddenly realize that their weekly routine is completely changed. In short, they eventually miss going to work every day and the social aspect of being around co-workers and clients.
What we know is that retirement is changing. Canadians are now leading longer, healthier, and more active lives. Many can expect to live two or three decades during their retired years. The average Canadian now lives past age 80, and if you and your partner are age 65 today, there is a 63% chance that one of you will live to age 90. So you need to ask yourself, what am I going to do with all that time?
Most of us expect to spend those two or three decades pursuing some kind of fulfilling activity. Increasingly, many seniors choose to stay active in the workforce. By staying active, they continue to feel productive and enjoy contributing to society – sometimes the most valuable aspect of continuing to work is socializing with others. Recent studies have even indicated that retirees who have remained in the workforce to some degree maintain cognitive abilities and have better physical dexterity than their fully retired counterparts.
Of course, money has a lot to do with the decision to keep working as well. The recent market decline has some people postponing retirement, or perhaps they have suddenly found themselves without a job and wondering if they can retire. You should spend some time with a qualified advisor understanding what you actually need for income in retirement and ensure that money won’t be a concern. In addition, some people are feeling the squeeze of being the “sandwich generation” whereby they are supporting their children and their parents. You may want to consider your family situation before cashing your final paycheque.
My best advice is to know that retirement is an open book. You need to ask yourself some very important questions – how do you want to spend your time? Where do you want to live? What’s most important to you?
One option is to continue to work, but with more flexibility. For example, you might stay on with your current employer, but work part-time, or from home. I know a number of clients who have even stayed on as a consultant which allows them to schedule their own work days and create their own hours – all while maintaining the relationships and paycheque. This decision should not just be about money, consider the social aspect of your job as well.
Perhaps you could start a new business or a new career. Retirement can provide you the flexibility to pursue what you’ve always really wanted to do. Some of my clients have chosen to work at a golf course, others restore (and sell) vintage automobiles, I even know one gentlemen who spends his time working at a ski hill so he gets free lift tickets. The possibilities here are endless.
Many retirees choose to give back to our community by volunteering their time. We all have valuable experience that we can share with various groups. Consider joining a committee, board, or a charitable group that matches your interests. Whatever it is, ensure it keeps you involved and engaged.
Whatever your vision of retirement, the financial foundation is required to make it all possible. When you’re ready, take some time to review your assets and work with an advisor to create a plan – the next two to three decades of your life will thank you.
Derek Fuchs is a Senior Wealth Advisor with Scotia Wealth Management in Red Deer and holds the designations of Chartered Investment Manager, Certified Financial Planner, Financial Management Advisor, and is a Fellow of the Canadian Securities Institute.