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Are you ready for retirement?

When people think about retirement, money is top of mind. A survey from Nielsen found that 70% of Canadians worry they’re not saving enough. Finances are important, but aren’t the only thing that matters around retirement planning. Here are six ways to look at being retirement-ready.


1. Answer the two big questions

First, how much should you save? It depends on your mix of expected income: RRSPs, other personal savings, government pensions, employer-sponsored pensions, etc.

The Nielsen survey said the average Canadian thinks $700,000 is enough. Financial advisors often recommend much more, like $1 million-plus. There’s no magic number. So much hangs on the answer to question #2. How much will you spend?

Financial experts say you’ll tend to reduce some major expenses, like commuting, housing, taxes, child-related spending, and savings for retirement itself. On the other hand, certain expenses could rise, like travel, hobbies and health care. Whatever your current spending, the experts suggest you might spend 70-80% of that after retirement.

2. Look at the big financial picture

As you get closer to retirement, you’ll have a better sense of your goals, assets and possible expenses. Talk to your financial advisor about how to think longer-term. That includes discussions about RRSP withdrawals, re-allocating assets and paying off debts (like a mortgage balance) so you’re not carrying them into retirement.

Your home is another consideration. Selling it can be a windfall, but you still have to live somewhere. Will you downsize? If so, when? Own another home? Rent? Stay in the same place, or move to where housing costs are cheaper (or maybe more expensive)? Check in with your financial advisor to discuss all the implications.

3. Seek advice widely

Go beyond your financial advisor to “test drive” your plans. Attend retirement seminars, and pick the brains of friends or family who’ve already retired.

Rick Atkinson, author of Strategies for Retiring Right, advises to create a thorough vision of a balanced lifestyle. How will you maintain your physical, mental, emotional and spiritual health? What will make you happy? Run that vision by a trusted circle.

4. See if work still fits in

Retirement used to mean leaving the work world entirely. Not true anymore. Many “retirees” keep working. A 2019 Maru/Blue survey of Canadian retirees revealed that 23% have tried re-entering the labour market. Of those, 59% did so for the intellectual stimulation. Just over one-quarter of respondents (27%) said they regretting retiring.

You could end up working part-time in the same field, exploring opportunities in an entirely new area, becoming self-employed, consulting, etc. Play around with scenarios, and factor in the income and spending. It will illuminate what retirement can look like, and if you might want to delay retirement.

5. Fill the void

Employment has meaning. Plan to pursue what else fulfills you. You’re not just retiring from something but to something.

That can be work in some capacity, but it can also be physical activities, a favourite pastime or volunteering. Volunteers give back, but get something back too, from a sense of purpose to new skills. (Some surveys show that volunteers even live longer!)

When people leave the workplace, they lose a built-in social network. Studies tell us that retirees who are social active are happier, and receive physiological benefits: lower risk of illness, and better cognitive abilities.

It’s not always easy to flip a switch to a new retirement lifestyle. The transition can be stressful, but is less so if you’ve prepared while you’re still working. So think about what you’re doing now to stay active, motivated, engaged and healthy.

6. Plan for distinct retirement stages

Retirement isn’t static. You should account for changing lifestyles, driven by your interests, abilities, and financial and physical health. As you age in retirement – hopefully one that lasts decades – you’ll go through phases. Some people describe three chapters.

1. Go-go phase.

The early, most active time of retirement, when you can still do it all (including work), and stay busier than ever.

2. Slow-go phase.

Retirement has gone on awhile and you’re in a rhythm. You’re still enjoying retired life, and perhaps are seeking more stability and predictability.

3. No-go phase.

This is where your abilities and activities could become more limited, and you might need more support than in the past.


Ken Dychtwald, a gerontologist and the author of books including Age Wave, Healthy Aging and What Retirees Want, breaks down the stages differently. He describes five: imagination (saving and planning for retirement), anticipation (the period right before), liberation (the honeymoon phase), reorientation (transforming to a new life) and reconciliation (enjoying and accepting that life).

Your planning and spending should account for all stages. Think about where you are now and where you’re going, and you can better map and enjoy the journey.