The right plan isn’t about money, it's about life.
For working Canadians, espeically those starting families, financial planning is about saving money and otherwise making the most of what we have. As retirement approaches, that changes. In retirement it's less about saving than it is spending in order to create and maintain the life that we want to live.
True financial planning for retirement is a complex issue with many variables including (but not limited to): investments (i.e. stocks, bonds, funds); real estate; debt; taxes; cash flow (income and expense) analysis and prediction; insurance and defined benefits (e.g. OAS, Canada pension benefits, employer plan benefits, etc.) There are various dynamics that will always be difficult to account for, notably health care requirements and changes to markets such as real estate, investments and the cost of living.
1. Gather the right tools
There are several worthwhile retirement planning tools and tips from around the web:
- The government of Canada provide a retirement income calculator. Keep in mind that predictive tools such as these are quite limited.
- If you are approaching retirement or know someone who is, the online Canada Pension Plan application kit makes it easy to apply.
- You can also learn about the benefits of and issues related to retirement abroad.
2. Make some decisions about you
In retirment, you are faced with more choices than you've ever had before, and a greater range of freedom to make them. Where do you want to be? You don't have to be close to work, soc maybe it's time to move out of the city. Do you want to be close to the grandkids, or ... not? Do you want to be busy, or spend more time relaxing? Is travel important, or are you more interested in staying put? All of those things, and more, will necessarily provide input into how to allocate your resources. It's not about money, it's about how you want to live. So, ask those questions first, then look to allocate resources in order to support the choices you've made.
3. Think of today, plan for the future
It's important to remember that many senior citizens will eventually require care to one degree or another. While retirement homes might seem costly, living in a home significantly reduces many other costs such as daily transportation, home maintenance, and restaurant meals. There are other benefits, too, including those down the road. Moving now, in many instances, may mean that you won't need to move again.
Some advice on planning for a retirement home: