Retirement Readiness – How do you know you’re ready?

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Retirement PlanningBoth men and women are focused on retirement but it appears that women worry more over what is known as the “bag lady syndrome”. This is the fear of running out of money, particularly in old age. You might think that only those with low savings would worry, however, that’s not been my experience. I think, no matter how much you’ve saved, few want to live a retirement lifestyle that is substantially less than what they’ve grown accustomed to during their working lives!

Here’s a book I recommend that will help put your retirement saving into perspective – The Real Retirement by Fred Vettese & Bill Morneau (2013). The authors debunk poverty rates for Canadian seniors. They report, “the poverty rate among Canadian seniors is just 5.9%.” It’s based on the definition of poverty used by the Organization for Economic Co-operation and Development (OECD) and it shows that Canadians are much better off than other highly developed countries, including the U.S. at 22.4%, and Japan at 22.0%.

On an even more positive note, the book’s subtitle, “Why you could be better off than you think, and how to make that happen,” is most encouraging! In a nutshell, the authors show that many Canadians do not need to replace 100% of their pre-retirement income.

My advice for anyone serious about saving for their retirement is to work with a knowledgeable Advisor to prepare a detailed Financial Plan showing projected retirement income. The Plan should be based on your unique situation and needs, your life expectancy, and the various sources of retirement income you can expect to receive. If you’re on track with sufficient savings, you can plan your retirement exit strategy with confidence! If not, there are many options to explore. Work with your Advisor to examine the impact of working longer or part-time, selling real assets (such as a cottage), or saving more before your anticipated retirement date. As The Real Retirement demonstrates, you may be better off than you think!

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