Retiree factors to consider
Time management, home, lifestyle are priorities
The word retirement is everywhere. You see it on TV, in the newspapers, on billboards and in social media advertising.
We seem to all be trained to plan for it, expect it, long for it and take it for granted that it’s coming.
Many have a vision of what that means. However, there are three major factors we all have in common that affect everyone’s retirement: time management, your home and the protection of a long-term lifestyle.
Once you stop working and truly enter retirement, there is a big difference between time filling and fulfilling time. If you worked a 40-hour week, 50 weeks a year, you spent 2,000 hours a year working. That’s a lot of free time in retirement.
For the most part, retirees have very little difficulty filling their time. They revel in not working for a boss but, after a while, some feel they no longer do the kinds of things they find meaningful or inspiring. Perhaps their career made up a large part of their identity and, for these people, it is important they find pursuits they can enjoy.
Activities that are meaningful or inspiring tend to flow from our key values and help enrich our lives. A leisure pursuit is best if it fulfils and defines you. This should be something you think about, something you do often and is absolutely one of the key traits that will ensure your happiness.
Retirees who have many core pursuits are statistically happier than those who retire with only one or two things they like to do outside work.
Let’s look at the main focus of a retiree’s life: their home.
Home is a place to store memories, entertain and is somewhere familiar and safe. Over the course of an average retirement, there are usually one or two moves to a home better suited for different stages of life.
I know many feel they are in the home they will be in for the rest of their life. However, that sentiment does indeed change over time, when you have trouble getting up the stairs or get tired of cutting the grass or shovelling snow.
If you live into your 80s or 90s, you may want to use your primary home to provide the proceeds to fund an assisted living residence arrangement. You should always want your independence and security as you age without the reliance on a child or the government, and your home can provide this as long as it is kept free and clear.
Remember, for most of us, our home is our largest tax-free investment.
As we age, we all tend to have less risk tolerance to change and our desire to keep the status quo grows stronger.
You certainly want to be able to sleep at night without the worry of outliving your money. For this reason, it is imperative you have an adviser to assist you in converting your assets into a sustainable income. You want to create a monthly income you can count on.
Your withdrawal rate must be future-focused and it is always advisable to set up an annual income as a percentage of your total retirement savings rather than withdrawing random amounts as needed.
Retiring successfully is now more about continually planning, identifying possible gaps and making efficient use of the financial resources you have to help ease the life transitions you will go through at every stage of retirement.
Remember to keep things simple and seek professional advice if needed.
Your main focus should be enjoying your time. You made it. You finally have a 30-year long weekend, free from the demands of a job, and you can pursue your own interests without anyone’s permission.
Christine Ibbotson is author of How to Retire Debt Free & Wealthy and Don’t Panic – How to Manage your Finances and Financial Anxieties During and After the Coronavirus. If you have a money question, visit askthemoneylady.ca, and check out the Money Lady’s podcast at Saltwire.com.