Retirement not the end

Your time horizon stretches beyond retirement, so make sure your financial plan does too. Developing a savings plan for retirement is easy; it’s figuring out what to do after retirement that’s difficult.

Why do I say that? Let me explain.

Investors often think of retirement as the “finish line” they are working toward, and have a relatively simple goal in mind: save as much possible so it will last as long as possible. But retirement is not an end point, but rather the beginning of a new – and hopefully long – life stage that requires all sorts of new considerations and begs new questions that need to be asked and answered.

Simply put: your financial plan can’t just take you to retirement, it has to take you through retirement, and that can be the tricky part.

Many Canadians could see a retirement that stretches 30- plus years. With that comes a need to evaluate your financial plan at and in retirement, in consideration of different scenarios, wants and needs.

Some of these considerations include: How long do I expect to live? How should I spend my money? Should I be concerned about my long- term health needs and do I need to set aside a nest egg for this? How much money do I want to set aside for my children? Should I travel and when should I do so? Do I want or need to keep working part time?

Seeking professional financial advice and planning is highly recommended, even if you are taking an active role in managing your finances yourself. As you approach retirement, look at your portfolio and figure out your time horizon. Is this a five- year plan or a 35- year plan? You plan has to continue to evolve with your lifestyle and changing goals. Look for planning tools, or people who can help you figure out those “what if” scenarios.

I know first- hand the stress investors feel in trying to predict the future. The most vital thing to help alleviate this stress is to realize is that while retirement might be the end of your working life, it isn’t the end of your financial one. Make sure you have a plan. Retirement isn’t a finish line – it’s just a stop along the way.