By Colin J Campbell

You have heard all the clichés about retirement: Freedom 55, Money for Life, etc. But what is the reality? For many, retirement planning often begins and ends with the purchase of a lottery ticket.  It’s more like freedom 75 or 85! The good news, “It’s never too late to start, you are never too young or too old to begin planning for the future.” Today is the first day of the rest of your life and you don’t get a prize for finishing first, taking action now means you can control your future.

There are a few myths that need to be dealt with.

First, it’s not just about the money, having enough to retire may be essential but having a fulfilling life is far more important. We see a lot of our clients who have worked diligently to save, and within months of retiring are back to work. Why? The number one reason, they found out that having nothing to do is boring, having nothing to do is repetitious and it becomes work without the reward.

The second myth – retirement age is 65. There is no rule that says you are redundant at age 65. The reason 65 is considered the universal retirement age is directly related to life expectancy over 100 years ago. At the time actuaries were creating the first old age security programs average life expectancy was less than sixty, choosing 65 to as the starting point for benefits reduced the number that qualified. Politicians knew it was politically beneficial to provide a retirement benefit, they just didn’t want to have to pay for it. Today average life expectancy is age 85. It is conceivable that someone 65 today could live 15 to 20 years longer than their parents. Retiring at 65 could mean being retired for 35 or 40 years. That is a long time to be doing pretty much nothing productive. It goes against human nature to do nothing.

Taking a holistic approach to retirement planning that includes lifestyle, and avocation as opposed to occupation and determining what you want to do for the rest of your life makes excellent sense. Having a discussion with spouses and family about these issues before you retire can make for a much easier transition.

Here are some suggestions to start the discussion:

Vision and Values – Do you have a long-range goal?  What is most important to you going forward?  Can you define your vision and values?

Health –  Essential to any long term plan, know your health, take action to get fit.

Work –  What do you want to do? How much time? Can you do what you want and be flexible?  Will it be working for someone else, doing contract work or being self employed? Key questions that will make it easier to prepare in advance. The opportunities are endless, you probably have skills that will be in high demand in the future.

Family – What is your family status? Where are your children, grandchildren. Do they need your help? Will they be involved in your business? These questions will help to define how you will spend your time. Having these discussions will remove the surprises that always come up unexpectedly.

Leisure and Lifestyle – No matter what you do, you need to plan for fun, for R&R.  Planning in advance means that you can put it in the calendar, which makes it easier to make it reality rather than taking a chance and letting it happen without a plan.

Home – Where do you plan to live? Will you stay in your present home or move? This is essential; often people pack up and move to an entirely different community only to find they have no friends.  The move may be predicated on being closer to the children, then they get transferred and there is no one close. Very important discussion topics to make sure you are doing the right thing for the right reasons.

Financial comfort – Will you have a sufficient income to meet your needs and allow for the lifestyle you envision? What can be changed today that will improve the outcome later?

There is no easy answer to these issues; there is no retirement plan in a box you can purchase for $49.95 that will solve all these issues. The only way to achieve your plans and objectives is to start writing down your goals, vision and values, ask the questions and reach a consensus. Write down the results and begin to formulate the plan. It isn’t necessary to make it a comprehensive detailed day-by-day plan but rather several key long range objectives. The key is to clearly define them and to write them down.

Planning for the future, which to begin with is a unknown, requires discipline, if you want to just depend on government benefits fine do nothing but if you want to be in charge of your life you have to take action and that action requires commitment. As mentioned in the opening paragraph today is the first day of the rest of your life, you are choosing the path you take, how it turns out is entirely up to you.

Need help, get your financial advisor involved in your discussion, he or she will act as your quarterback to help you move forward to the ideal solution.

– Colin J Campbell CFP,CLU, CH.F.C. is the managing partner of Guidance Planning Strategies in Cranbrook. Established in 1995 GPS helps families create wealth that last for generations.  [email protected]  / www.gpsbc.ca

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