“We’ve been saving since we were just starting out. But life is so expensive, I’m worried we’ll never have enough to retire!”
I could feel the frustration emanating from this lovely new client Heather, who was about to turn 50. Her husband Rob, on the other hand, seemed a lot more relaxed. “I’m not worried,” he said. “Everything will fall into place when it’s time. Hopefully sooner than later!”
His attempt at a joke fell flat as Heather’s frown deepened.
“This is serious” she said. “How will we know when we can retire?”
When I meet with a couple, I often discover that they have very different views on spending, saving, and financial strategies. Even when they’ve been together for 25-plus years, like Heather and Rob!
As they both approached their 50th birthday and their daughters were on the verge of striking out on their own, they were starting to look towards the next stage of their lives, but they had no idea what that would look like - or when it would be feasible.
Heather was nervous. She knew they had a sizable nest egg put aside, no consumer debt, and were close to paying off the mortgage on their family home. Would it be enough for them to live comfortably in retirement? Could they travel often, like she had always dreamed?
Rob was a lot more confident. They’d been doing all the “right” things. He wasn’t really sure how, but it would all work out.
Retirement was no longer a distant eventuality. It was getting closer, and Rob was more than ready. He’d seen his parents’ plans for an active retirement go down the drain when they were handed unexpected health issues. He wanted to enjoy life at a slower pace while he could.
I quickly realized that although Heather and Rob seemed to be on different pages about when and how they would retire, they shared a common vision for their future. That made my job a lot easier!
By conducting a thorough analysis of their situation and goals, I showed them a number of different scenarios. They could clearly see the pros and cons of each, and were armed with the knowledge to move confidently forward.
They had a lot of things working in their favour. They had amassed a nice nest egg, and were able to take yearly vacations. They had an RESP to help their daughters pay for their education, and an emergency fund to cover them if needed.
But - they were surprised to learn that they had been missing out on some lucrative tax credits. They hadn’t reviewed their insurance coverage since their children, now in their late teens, were born.
And that emergency fund was sitting in a savings account - losing out on valuable earning potential.
Over the years, Heather and Rob had diligently contributed to their RRSPs and TFSAs, but they hadn’t thought strategically about maximizing their savings. Their “set it and forget it” approach meant that their savings were doing ok - but there was potential to do so much more.
I identified opportunities to increase their projected assets in retirement by diversifying their investments while also accomplishing a new goal of theirs – leaving a greater legacy to their children. This meant moving some of their existing savings into complementary asset classes like annuities and whole life insurance.
I also showed them some different approaches to drawing income during retirement. This aspect of planning can often be overlooked, but can make a significant difference in how long your money will last you.
At the end of our session, Heather and Rob had a 20+ page report that outlined 8 scenarios for their retirement, allowing them to consider the pros and cons of each. Heather felt like a huge weight was lifted off her shoulders. She could clearly see what was possible for their future, how they would get there, and most importantly, when!
And for Rob, it meant that they could slow down and enjoy life in alignment with their values, with a clear understanding of the impact of their choices.
As you’re nearing retirement, do you know:
- Whether you’re on track to have enough to live your ideal retirement style and if not, what you need to do to get there?
- All the ways to get you there faster, and
- What changes you should be making now that you’re entering this new stage of life?
These are just some of the questions that can be answered with a retirement strategy session. Book a quick call to see if it’s the right fit for you!