Evaluating Your Retirement Readiness

Although we all plan with the best of intentions, lurking in the back of most Canadians minds is that nagging doubt: Will I outlive my resources? Careful planning, monitoring and periodic adjustments may be necessary in your pre-retirement years to ensure that you are on the right path. Considering the importance of this undertaking – it is the rest of your life we’re talking about here – it is wise to hire a financial planner or investment specialist to guide you along the way.


Even with professional help, the responsible investor understands at least the very basics of their investment portfolio. Knowing how much you are paying in fees, which investments are earning substantial returns, how your portfolio is being taxed and more will help you stay on top of the game. Too many Canadians reach retirement age only to find that the lifestyle they had planned on living out through their golden years is now out of reach. Worse, health problems and a lack of insurance can cause a major change of plans.


The basics of retirement saving are pretty well known – decrease the amount of risk in your portfolio as you approach retirement age, minimize your taxes, decide how much you will need per year to live the lifestyle you want. But what is a person to do when they realize, five years out from retirement, that their nest egg is sorely lacking?


Be creative! More and more Canadians are considering a “working” retirement; finding part time or self employment to supplement their investments. Find ways to decrease your costs of living without seriously hampering your lifestyle; perhaps you and a few of your friends could invest in a large property together and each have a room. While some would turn their nose up at the thought, others see this as financial common sense. Sharing the costs of home heating, energy and other expenses is a good strategy for everyone involved.


Consider alternative methods of transportation; when you no longer need to commute to work, could you get by with public transit and a heart-healthy bicycle? These small things may seem inconsequential, but when your retirement savings might have to stretch over 30 or 40 years, every bit counts.


The best strategy, of course, is to begin planning and saving as young as possible. But for those who missed the boat, it’s never too late to evaluate your situation and implement changes to make your retirement as comfortable as possible.