Will I be Okay?
Considering the US presidential race and climate change predictions, this could be a pretty existential question. But in my line of work, I most often hear this question – “Will I be okay?” – when my clients are thinking about retirement.
Most people slip into retirement having worked for 30 years or more, and they are looking forward to enjoying a permanent vacation. Some of those people leave the workforce because their pension was topped up and they were working for what they perceived as decreased dollars.
By that I mean, they could retire and get a pension of, say, $50,000 a year or they could continue to work and earn $75,000 per year. While $75,000 is more than $50,000, the perception is they are working for $25,000. When you take off taxes, UI payments, RRSP and Pension Contributions, CPP payments, that gap is even narrower, so why not retire?
Of course it makes sense to consider this, but it’s just one element of the decision.
Over the years we have prepared several plans for people entering retirement. Here are a few of the questions we ask our clients to consider before we start in on a plan:
- How long am I going to live?
- What major expenditures am I going to make for travel, home repairs, automobiles etc. over this duration?
- Have I planned for the time I may no longer be able to take care of myself? Can I afford the type of retirement home that I want?
- Do I expect an inheritance? If so, how much?
- Is my income likely to change during this time period? How secure is it?
- What’s it costing me annually to live right now, not counting the extra expenses outlined above?
Questions like these, and more, help you determine the answer to the question: am I going to be ok?
And then we can get started answering our clients’ question like:
- When should I start taking money from my RRSP?
- Do I draw my CPP now or delay it to the Max?
- Same question for OAS? Also, how can I avoid the OAS claw back?
But money isn’t the only consideration. Now you have no weekends, no weekdays. Most people can fill these up with projects, hobbies, volunteering, maybe a part-time job. What’s your plan? If you don’t want to regret the decision to retire five month or five years down the line, it’s important to consider these details.
One of the worst aspects of retiring is isolation. We are social beings and unless we keep in contact and conversation we get old sooner than we should. Judy retired almost 10 years ago and she keeps herself active in all those things above, with family, and helping me in my work. But every now and then she talks about missing her store and the people she got to know as her customers and friends.
For me the choice is easy. I enjoy my colleagues and clients. My work allows me a great deal of flexibility. (Usually, anyhow – it’s Saturday morning and I’m in the office writing this). My business continues to grow because my clients value my work and refer me to their friends and family.
So when I look at my own career, I ask myself three questions:
- Am I healthy? Most definitely. And for those of you who were worried from my previous post, I’m in the best shape I could be in. My resting heart rate has been as low as 54 bps over the last year.
- Am I happy? When you have great people as clients, when you are challenged with coming up with solutions, when you work with a group of intelligent, hard-working people and when you can enjoy time off for family pleasures, why wouldn’t you be happy?
- Am I continually learning? Yes – new skills, new software and new colleagues are part of what make my days exciting, and they all contribute to our ability to provide you with the support, atmosphere and solutions you deserve. I go on some pretty intense conferences every year so I can stay current. On-going education is a necessity in our industry and a requirement in our office.
As long as the answers are yes, I’m working. What about you? How do you answer these questions?
So what’s new for 2017? The world is changing and people in the financial services industry need to stay educated on the latest trends and solutions, or retire. To that end, I’m working on implementing a new professional development program in our offices that I know will challenge all of us and bring great benefits to our clients. (More about that in a future post).
In the interim, if you are looking at retiring and would like an idea of how your retirement would look give me a call. The first meeting is at my expense and then we can decide how to go forward.
Did you miss Life of Pi when it came out to great fanfare in 2001? I really enjoyed this adventure story about life’s choices and I’m in good company – President Barack Obama loved it, too. Get it from Amazon.ca or your local book shop.
About Michael Caldwell
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