Plan a tailor-made retirement plan!

Des grand-parents jouent avec leur petit-fils

Your retired neighbour just flashed by on a morning jog. As you watch her run off, your own future retirement comes to mind. Do you realize that this stage of your life will possibly last as long as your career? That right there is one sure-fire reason to properly prepare for this next step.

We have put together some tips to help you plan a tailor-made retirement plan. Let yourself be inspired.

Back to your future: identify your expectations

Some dream of walking on the shore, practicing yoga, travelling in Europe... Yes, they are plans. The fact remains this is not enough to fill your retirement days!

You have to visualize your future more specifically. To do so, ask yourself:

  • What do you envision your daily activities, interests and hobbies will be?
  • Is anyone close to you planning to take their retirement at the same time? Will you have company for some activities?
  • How much energy do you expect to have at that time to perform certain tasks (e.g., shovel your driveway, garden, watch grandkids, etc.)?
  • Will it be more convenient to stay in the country or downtown? Do you think the suburbs will suit your needs if you decide to drop the rush hour drive?
  • What would be your reasons for getting out of bed in the morning, your main sources of motivation?

And know that no standard retirement exists, there is no one-size-fits-all model: it’s up to you to best define your ideal mix.

Ask yourself every question you can think of and write down all your answers. Review them every year and ask yourself (tell the truth now!) if your vision has evolved. You change over time so it’s important to be flexible. Your interests, health or hobbies can go in a different direction.

Consider the three phases of retirement

Average life expectancy in Canada is around 80 years. A thousand and one factors influence it but either way you can expect to live longer because it’s only increasing over time.

Retirement can be broken down into three phases. Consider each phase in your planning as they all come with varying expenses.

The active period

During this stage, you can stay at home if you wish and schedule a variety of activities based on what you want to do. These hobbies and plans can cost money or not. Make a note of them in your reflection.

Concrete cases: 2 retirements, 2 distinct lifestyles

Mary spends a few days every month with her grandkids. Every week, she participates in a reading club and walking group. She also does a lot of volunteering, including greeting blood donors. Her activities come with few expenses.

As for Gabriel, he’s crazy about golf. In addition to his golf club membership, he loves travelling at least three times a winter to practice his favourite sport under the sun. Gabriel needs a certain level of income to pay for his hobbies.

The slowdown

In this phase, your state of health will determine your daily choices. You may have to move if your living space no longer suits your needs. This has to be considered in your planning.

The advanced phase

During this phase, your activities will be more limited and that will result in fewer costs. However, if you do experience a loss of autonomy, you may need daily help. That situation will undoubtedly put a dent in your budget.

Find out the cost of renting in a seniors’ residence. The amount of money you need to budget will depend on your future health status and will vary depending on what you are looking to do. Consider these expenses in your future financial projections.

Planning your retirement budget

You will be able to better establish the budget you will need once your vision of retirement is clearer.

They say for example that the financial goal to achieve is to earn 70% of your working income. Take this wisdom with a grain of salt. The amount you need will instead depend on:

  • your plans and values
  • age you begin your retirement
  • average salary during your career
  • debts (mortgage, loans, etc.) that you have to pay off, or not
  • target lifestyle
  • your intention to work occasionally (as a freelancer, etc.), or not
  • how inflation affects your standard of living
By the numbers

From 1960 to 2021, in Canada, the inflation rate rose by an average of 3.8% a year. In other words, a mattress or washing machine that cost around $100 in 1960 would go for around $920 at the beginning of 2022.

Would you like to provide occasional financial assistance  to your children or grandchildren? This is another factor to consider.

Ask the professionals to run the numbers

Financial security advisors play an important support role. They can crunch your retirement numbers quite accurately.
To do this, they base their calculations on:

  • your current (RESP, TFSA, etc.) and expected savings
  • your investment profile
  • pension funds, if applicable
  • provincial and federal programs
  • your marital status (for tax saving strategies)

Do you get enough return on your investments? Is there a gap between your retirement dreams and future earnings? Advisors will spell it out for you. They could clarify the age at which you can request your pension funds and how to withdraw your investments to pay less taxes.

To better meet your goals, the specialist you speak with will help you create a plan, a strategy to bring you closer to your ideal retirement and maintain your standard of living for as long as possible.

Keep learning, advice that pays off

All kinds of information sessions (and usually free!) can help you learn more about retirement-related financial and investment products. Find out more!

Take care of your “you 3.0”

Retirement planning involves more than just the money. To make the most of this chapter in your life, get to know yourself better and better - and take care of yourself as well.

You know what they say: eat healthy and keep active every day... The most important thing is to make a resolution and follow it up by taking action. Best to do it now to put all the chances on your side for a rosy future. Healthy aging can help ward off or lessen the severity of chronic disease or disability.

In closing, here are some ways to help yourself now and in the future.

  • Get regular physical activity (e.g.: walking, swimming, gardening…)
    A Canadian health study found that 67% of seniors who get regular physical activity at least three times a week are in good health, compared to 36% of those who are rarely active. In the event of illness, the fact of being active promotes recovery.
  • Work on flexibility and strength
    Getting some regular weekly exercise can help prevent falls, a common occurrence among seniors that often leads to chronic pain and loss of mobility.
  • Eat well
    This is key to maintaining vitality and preventing weight gain. Eating enough fruit and vegetables every day is one of the most effective ways to stay healthy.
  • Cultivate and maintain social connections
    Belonging to a group (friends, family, community) boosts your level of happiness and helps keep mental health issues at bay.
  • Quit smoking
    Tobacco is associated with several illnesses that reduce the quality of life and also negatively impact longevity.
  • Regularly consult specialists who will help you take care of yourself: doctor, dentist, optometrist…
    The impact of an unresolved issue, gum inflammation for example, can come back to haunt you later.

Rise to the challenge of planning your progressive retirement, eyes set on a few goals at a time. You’re doing it for you, for your quality of life (current and future), and also for the people who care and will care about you.

All this together can really reshape your retirement experience for the better!