What will your retirement look like?

BY FAZAAD BACCHUS

I came upon a stark revelation whilst growing up in Trinidad and Tobago. I noticed once per month on a Tuesday morning there were long lines in Port of Spain where pensioners would line up to collect their pension checks from the Government. This in itself wasn’t the revelation; it was looking at the people and noticing certain realities. There were some men well dressed in suits with canes in their hands and sporting two toned shoes whilst there were some others in raggedy clothes and wearing rubber slippers.

I asked myself what the difference could be between these men and there I was told something very profound, it was obvious that the first one was an elderly gentleman and the second a poor old man. They were differentiated by the amount of money they were receiving or had in their possession. And so once per month as I passed by these men, I would watch their behavior and it would dawn upon on me that money in your retirement years in a most significant part of your lifecycle.

Retirement is a very personal and individual experience, and everyone has their own expectations. Almost everyone I have come across would like to at least retire where relaxation and enjoyment is a part of their everyday life. Some are more concerned about grandkids, some volunteering, while others are thinking of hobbies like golfing, cycling etc. However, no one wants to think of going back out to work to make the almighty dollar, but to be in such a position one must have saved enough.

Having saved enough is also being threatened by medical bills and healthcare costs. And if you find that you will need to go to a senior’s home, and then your monthly bill is no less than $2,500 per month, a $30,000 per year bill, yes retirement is expensive. And if the markets are unkind how long until your savings run out? Will you become a burden on someone?

What will your retirement look like is a serious question and should be in your mind as you begin the planning process. Here are some things you should consider, what will be my estimated financial needs during retirement? What do I expect to receive from my CPP, OAS, RRIF and all other pension plans? How much have I have saved right now and how much will it grow to by retirement age? Can I defer my retirement age by a few years if health permits? How long do I believe I will live and am I going to run out of money? Do I want to leave some of my money for my children or grandchildren?

Money in retirement differentiates you in retirement. It may also differentiate you prior to retirement, but you can still put a smile on your face and go to work, in retirement you don’t have this option. Tomorrow’s retiree may not have the benefit of yesteryear’s retiree where you are supported by your children, therefore working adults need to start saving and start planning towards a proper retirement. Tomorrow’s retiree may not have the benefit of Guaranteed Income Supplement if the government’s budget cannot afford it, more than ever we need to start saving. Speak with a financial advisor.