Expectations of what retirement means for Canadians have done an abrupt about-face over the past 50 years or so. The idea that someone would find a job and stay with the same employer for 25 or more years and then start collecting from a pension plan is no longer the reality for the majority of working people. According to a report released by Fidelity Investments, just over half of pre-retirees (51 percent) stated they expected to continue working and 28 percent said their vision for retirement may include a new business.

Longer life spans for Canadians mean the biggest challenges retirees face is they will outlive their savings. Fifty years ago, the main concern for retirees was much different: they would have had to contend with the fear of dying too young.

While most Canadians know they should be preparing for retirement, they find it challenging to save enough money to reach their retirement goals. Most financial experts recommend putting away 10 percent of net pay for retirement, but many people are putting away five percent or less in a long-term savings plan.

Picture What You Want Your Retirement to Look Like

For many people, getting a picture of how they want to spend their days in retirement is challenging. This is an essential exercise, however, since it will form the basis for developing a solid financial plan. Working in retirement should not be your long-term goal, even if you enjoy keeping busy.

Choosing to stay in the workforce because you still feel you have knowledge to contribute or you enjoy interacting with your colleagues is a better reason to continue collecting a pay cheque. Working to supplement your other sources of retirement income (Old Age Security, Guaranteed Income Supplement, Canada Pension Plan benefits) because they do not pay enough to support you is not the kind of choice you want to be faced with, especially if you had assumed you would be able to leave the workforce when you were ready.

Plan Now for Phased Retirement

If phased retirement is turning into the new normal for many Canadians, you will need to plan for it. Start thinking about a longer lifespan and what that means for your savings and income needs, as well as living well in retirement. Instead of picturing leaving the workforce entirely at age 66, you may need to look at what your life would be like if you were continuing to work to age 71 (or older in some cases). Even the best-laid plans don’t always work out the way we hope, and a good financial plan for retirement also considers what would happen if you became ill or disabled and had to leave work sooner than you originally thought.

As an experienced financial advisor I can review your current financial situation and goals to develop an individualized plan for phased retirement that will be right for you. Contact me for a personal consultation.