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Rob Carrick from the Globe and Mail recently wrote an article “Why Advisors may not set you on the right retirement path.” and my favorite line in the article is “This column has been around for more than 10 years and never once during that period were people said to be saving enough for retirement. If anything, retirement savings anxiety is worse than ever today.”
Over and over again every study I read about says no one is saving enough for retirement. I’ve all heard this message so much that even I am starting to become desensitized to it. Is anyone else feeling the same way?
The truth is I am tired of hearing this message especially when I see so many people retire happy and successfully without having millions and millions of dollars in their RRSPs.
The Consumer Reports National Research Center recently surveyed 24,270 online subscribers age 55 and older about finances and satisfaction with their lives and found some common keys to peace of mind that had little to do with big salaries or high living. Half of those with less than $250,000 in net worth were highly satisfied in retirement.
Ironically I have had the privilege of meeting lots of retirees who have found a path to a happy retirement despite the doom and gloom in all the messages out there.
A simple cure for retirement anxiety
Anxiety is created because of the unknown. Your financial future is one of the biggest unknowns so it’s no wonder why we worry about retirement.
The cure for retirement anxiety is simple: Start planning for the future. Many studies have suggested that 6 out of 10 Canadians have no plans for retirement. Are you one of those people? It’s no wonder there is so much retirement anxiety out there. If you think about the word planning it simply means looking into the future to make your future as predictable as you possibly can. It’s all about figuring out where you stand, where you need to be and how to get there. Planning is the start of reducing retirement anxiety.
Retirement is personal
There is no universal definition of what retirement means. Retirement can be anything you want it to be. You simply need to figure out what you want it to be. Figuring out how much is enough should not be intimidating. There is no shortage of information, tools and resources to help you plan for your future.
Don’t let these studies cause you to give up on your future. Stop making excuses and start taking action.
Principles of planning
Here’s the deal. I suspect happiness is important to you. Don’t assume retirement will be happy, depressing or something in between. Plan for it. You’ve heard the old saying “people don’t plan to fail, they fail to plan”. That’s a big reason for retirement anxiety. So stop listening to all the “noise” and the studies that are telling you that you are destined for Kraft Dinner, day old bread and poverty.
Get off your butt and start taking the necessary steps to plan for your retirement so you take control of your future.
Just remember, when it comes to planning, it’s never too late to start. Even if your retirement plan does not leave you with the most desirable outcome, at least you know and more importantly you can do something about it.
Do you have retirement anxiety?
Planning is not the only way to reduce retirement anxiety. You can reduce your debts, save more money, increase your income, watch your spending, etc. Although these are great ways to feel more confident and financially secure, you still need to prepare for retirement to cure retirement anxiety. It all starts with planning. How would you know how much to save for retirement if you don’t have a plan?
Do you have retirement anxiety? If so, what are you going to do about it? If not, why not? Help others get rid of retirement anxiety by sharing your retirement planning successes.
Jim Yih is a Fee Only Advisor, Financial Speaker on wealth, retirement and personal finance. He is the author of 10 Things I Wish Someone Told Me About Retirement. Currently, Jim specializes in putting Financial Education programs into the workplace. For more information you can follow him on Twitter @JimYih or follow his blog at www.RetireHappyBlog.ca.
Hello JIm,
Very well written and useful article on post retirement life. Even I am agree to your point that saving is very essential to get a better retire life. A secured financial background will give you happy retirement life, And a retired person can lead a anxiety free life! There are so many retirement plans in market. So I would like to suggest some plans such as, IRA concept (Individual Retirement Arrangement) .IRA is an account plan, here a person can fixed money for future. There are many other IRA plans like : IRA Pension for Employee, IRA Roth System, Elementary IRA , Conventional IRA . This are very effective retire plan both a person and for his or her life partner. Apart from this there are so many online pension calculators are available, So you can easily calculate your all total savings in a better way and can lead a tension free life. So no need to anxiety, start thinking today and make a good planning for future !
Hey Thanks for the comment Jason and pointing out some different accounts. Here; in Canada, we have the RRSP, pensions and TFSAs.
Cheers!
Jim
The big problem with retirement anxiety is that steps aimed at dealing with it make it worse! It’s not that retirement planning is hard. It’s that most of us put it off. Then, when we are reminded that we should have been doing it for some time, we feel worse. So we become even more determined not to think about it! There’s a very dangerous cycle of growing desperation that can kick in here.
One thing that I think can help is to encourage people to save for life goals that can be achieved in less time than an old-age retirement. People feel better able to get about saving $10,000 than they do about saving $1,000,000. When they achieve success with the $10,000 saving goal, they get to see how much fun saving can be and feel emboldened to tackle bigger projects — like retirement!
Rob
Thanks Rob, I like the idea of breaking the savings down to more manageable goals. Instead of saving 2.8 million for retirement, saving $5000 in a RRSP this year might be more manageable!
Jim
Jim asks an excellent question with, “How would you know how much to save for retirement if you don’t have a plan?” Everyone’s vision of retirement is different and we need to spend some time considering what our vision is. This is an essential first step before determining how much is enough.
After making my plan, I realized that I need much less than I had anticipated. As a result, my retirement anxiety has significantly decreased.
Thanks for sharing Kim. I find it amazing that once people actually do the RIGHT planning, they realize they do not need as much as they think. I’m glad planning has helped you to realize that!
Jim
Well, I’m just planning to work until I’m 75. That would make me happy. Well, at least, on some days I think it would . . .
David . . . more and more people are planning to work in retirement. That’s not a bad thing if you love your work. If that’s the case, maybe you can consider yourself retired today!
Don’t we all hope we are able to work until 75? The fact is that most of us will lose at least some of our physical and mental abilities by that age. Shouldn’t retirement planning include the unforseen? Medical expenses, long-term illness of our spouse, parent, children? I may have not have planned for my retirement, but what keeps me up at night is the unforseen.
You are absolutely correct. Part of retirement planning is dealing with contingencies and risk management. That’s also why it is important to enjoy because you never know when your health might deter you from living the best years of your life.
It’s important to have a will, power of attorney and personal directives in place. That part of retirement planning. too!
Jim, you are aboslutely correct that planning is essential. Only you are to kind speaking about anxiety and not the issue that many want to just stick their heads in the sand and not deal with the issue and hope it magically goes away.
Rob and Jim above at least took the step, but their anxiety increased after taking that step. I understand their sentiments. But at least they can now attempt to plan to make for their shortfall, be it working longer then anticiapted or drastically cutting costs.
Not liking the potential result is not reason enough to not plan, planning and the resultant action are the key, even if you can only take minimal steps in regard to the action, sticking your head in the sand only makes it worse when you pop your head up.
Thanks Mark. One thing I have found is that after working with people to do proper planning, people are surprise that it looks better than they think. It’s better to know one way or the other than not know at all!
Cheers!
Jim
Great article Jim! I believe you are correct when you stress the ‘importance of planning’. Financial planning is important, but don’t forget to plan non-financial life goals that you wish to achieve in retirement. Do you want to work with a charity, go on that big trip, have more time to exercise, eat proper, etc. You really need to look at the ‘big picture’. I would like to see the word ‘retirement’ done away with, and that we refer to this period as ‘transition’ or ‘new chapter’. I believe this time should be the most exciting time of your life if you take the time to plan it right! Take the time to plan both your financial future and your life goals.
Thanks Yvonne, That is an interesting comment. Many people have suggested that the word retirement is not appropriate. I think the the word can mean anything you want and the word retirement still means positive things to people. Thanks for your input on the fact that retirement is about more than just money.
Jim
For persons at or approaching retirement, the anxiety of their new freedom may be met with joy, or dread. Men are especially prone to feelings of loss when a lifelong career and the contributions they made on a daily basis suddenly end. The usual workday routine filled with scheduled activities is gone, and for some the wife may be losing patience with the 24/7 closeness.
Women who retire may suffer these conflicting feelings, as well. I can only write from a male perspective, so this article is mostly aimed towards advice for men. As a man shifts gears and approaches retirement, it’s time to get out of the house, interact socially with peers, and find an outlet to share your worldly expertise and lifelong lessons. If you’re married, your wife may offer encouragement to allow herself a well deserved break adjusting to having you constantly around and underfoot.
Years ago as a summer camp counselor, I learned the best technique for handling homesick children was using distraction to help them focus on all the fun things to do at summer camp. The results were amazing and immediate, and if you are retired or nearing retirement, finding your distraction could help you discover a broad range of senior activities as a retiree, too.
I recently encountered a prolific writer who has published works on a variety of topics. Granted he has a Ph.D. and is comfortable writing, yet he is 75 years old, married 52 years, and has 32 grandchildren. His outlet is writing, and he certainly is not bored. I should mention he owns a dozen websites going back as much as 10 years. The mindset that the elder generation is technologically challenged is obviously a myth. If you have avoided computers, it may be time to reconsider.
OVERCOME THE ANXIETY
The key to overcome male anxiety approaching retirement is finding outlets for your leisure time and ways to share your expertise with people who will listen. Here are some suggestions:
- Volunteer in your community to lend a helping hand to those in need
- Find peers with similar interests to bond and share leisure time
- Consider blogging on a topic of interest or expertise
- Get creative with a new hobby and build something unique
- Explore your artistic side and take up painting or sculpting
- Learn the methods for tracing genealogy and become a history detective
- Take field trips within 50 miles of home and encounter wonders of nature
- Write articles like this one and self-publish online to make new friends
The internet is filled with do-it-yourself advice and tips for managing your newfound leisure time as a retiree. Each item in the activities listed above can be done for free or minimal cost regardless of age or gender. While not all are outdoors, each provides a means to learn and grow while feeling a sense of accomplishment.
EXAMPLES OF ACTIVITY
Let’s take a look at just two items on the list, and some advice from a personal perspective. I’m within 10 years of retirement, so the timing is not right for me for all the options listed, yet I already do at least half of them.
Genealogy has been a hobby for 10 years. My surname could be traced back 100 years before I began researching it online around mid-1990. The internet was in its infancy yet I was able through contacts in Sweden to get my paternal line back to the year 1560. Despite improvements in the amount of information online, one source for studying genealogy that cannot be overlooked is oral history.
Consider making genealogy a hobby, and start with documenting known oral history from the living members of your family. It’s too late once they’re gone, and as a senior you can contribute to this project today to the benefit of future generations. Remarkably, I met a great aunt in 1996 that lived some distance away in a nursing home. She was born in 1900 and at age 96 she filled in many missing family history details like identifying the names of 2 horses in an old family photo of her parents and siblings on the farm.
A more recent example of activity comes from a long time friend with a hobby that you could learn easily, and then build something unique. My friend happens to be an expert fisherman and mechanical engineer who designs and builds custom boats for fun. Imagine buying the materials for a custom made kayak for around $50 USD, and then spending a few weekends with your child or grandchild building this boat. My friend offers instructions including the blueprints, and the job could be finished in just a few weekends.
In conclusion, these and the other examples of activities for senior citizens provide a starting point of what you might want to do in your spare time. Read the list again and then add your thoughts as you expand the list with unlimited possibilities. The opportunities to overcome male anxiety approaching retirement are endless, so let your imagination wander as you come up with ideas to spend your time enjoying leisure and helping others.
Wow Carl! That’s a post on it’s own. Thanks for sharing. I think you have a lot of great stuff in this post that can help people plan to be busy. I also think it’s good advice for men or women.
Cheers!
Jim
Planning for retirement…interesting concept. Between family committments, a full time job, numerous sports to coach, friends to spend time with (most of whom I owe more time than have)….I will fit planning my retirement somewhere between finding time to read a book and handmaking a canoe in my garage.
Or maybe I will just take what I have when I retire, go to Vegas, put it on Red and hope for the best.
Hey Walt, I think anyone reading this can relate. We are all busy and the world constantly throws ‘noise’ in our face. It’s tough to get everything done but at the same time the future also comes faster than we think. There’s an old saying that any road will take you somewhere. But is that somewhere, where you want to go?
Living with the author of this blog leaves me no choice but to think about retirement often. I/we bounce dreams and ideas about what retirement looks like for each other all the time. The more we talk about it, the clearer it gets. I save a little everyday and feel lucky to have started at a younger age, planning what to do and saving here and there. Retirement and retirement planning needs to be taken seriously and it is never to late to start planning and saving. The sooner you start the less stressful it is and the clearer that part of your life becomes.
Even if your plan changes , the sooner you start, the firmer the ground will be to make what you decide feasible.
Thanks Babe!
I went to a bank to get some help with a retirement and ended up walking out with a mutual fund. No wonder we all have retirement anxiety!
Buck Five! I’m sure many people have had the same retirement plan as you. When will the financial industry figure out that a retirement plan is not a financial product!
Jim
You took the words right out of my mouth! Actually, you didnèt because I would not have put it so well!!
Planning always helps with anxiety. Thanks for the advice.
Me too Stacy. I might be a nerd but I really feel inspired after some good planning.
Jim do you have any solid tips on where you start your planning ???
Great question Grant. I think I will tackle that in a post of it’s own. Watch for it on RetireHappyBlog.ca. Thanks for the great idea! Do you have any to share with others?
Retirement Anxiety is good – at least one is cognizant of the fact. Worse are those who are oblivious or are in denial b/c they are not willing to give up something now for the future. “Want (no nec need) now to keep up with Joneses”:
Mr Ham! What a fantastic perspective! Hopefully a little anxiety motivates others to plan. It’s true ignorance and and denial that is truly dangerous. I never thought of retirement anxiety as a good thing if it motivates change.
Cheers!
I grew up in culture of saving for a rainy day. So much has been lost on our youthful generation. It’ll be a sad when someone wakes up one day and say, “hey, I got nothing”.
Thanks Mrs D.
I know lots of people who save for a rainy day like my dad. One thing I encourage people to do in retirement planning is to save for the sunny days so you can make retirement the best years of your life. Either way saving and planning is important. Thanks for sharing.
Jim
I like the idea of growing some investment properties as part of a retirement plan. I was speaking with a top Canadian financial advisor who thinks its a bad idea he likes to buy funds or bonds to lock in low interest gains over time. I personally can’t stand the thought of trying to gain 3-5% with the small amount of savings I have. Right now things are different from the boon and people tend to believe liquidity is the key, or Cash is King. Thinking about this, what if we get inflation?
if a retired person has 300,000 in savings, and we get into an inflation situation, it could seriously drop the value of that money. meanwhile your hard assets value should inflate.
I also love to invest in pork bellies.
Real estate, mutual funds, bonds, cash and pork bellies. You covered a lot here Carl. Good retirement planning not only helps people deal with retirement anxiety but it also helps people know how much risk they need to take in their investments. Different strokes for different folks.
Also, all retirement plans should factor some assumption for inflation.
Thanks for the input!
jim
retirement will happen whether we want it or not (at least to some degree). A holiday will happen only if we make it. Why not look at retirement as a holiday and save enough to enjoy the time and plan each detail like you would your trip.
We really do spend more time planning 15 day vacations than 15 years of retirement. It agree with your point that retirement will happen for everyone but not everyone has a retirement that is happy and successful. As the old aying goes … any road will get you somewhere. But is that somewhere the place you want to go. Planning is not just about reducing anxiety and how much is enough. It’s also about setting a direction or destination. Planning is also a process which is the journey to your destination.
Great advice Jim! I’m feeling better about retirement now that the economy seems to be back on track and our investments are increasing in value. One year ago our RRSP’s had not gained any value beyond our investment throughout the past 15 years, which was very alarming!
Thanks for the comment Lara. Interest rates have changed retirement planning. There was a time when retirees could invest 100% of their money into GICs at double digit interest rates. Those were the good ol’ days when you could live off the interest and keep your capital guaranteed. Today more and more people have their retirement savings exposed to the markets and other non-guaranteed investments which in itself has created anxiety. There will always be times when your portfolio does not work in your favour and creates anxiety and stress. The closer you get to retirement the greater the impact this risk has on you. I encourage people to re-evaluate the portfolio the closer you get to retirement. http://retirehappyblog.ca/perspectives-on-why-retirees-need-to-be/
Cheers!
Jim
Hey, Jim! Another way to look at it is not saving for retirement, but saving for your life goals.
I started saving aggressively in my early twenties because I wasnèt quite sure what I wanted to do with my life. I loved the sense of freedom it gave me — to move, go back to school, switch careers, work less when I had kids, etc. Its made a huge different in my and my familys lives, knowing that we can live in relative comfort without much financial worry no matter what. (You know something about this too, Im sure!)
I think sometimes by calling it retirement planning, peoples eyes glaze over because they dont want to think that far ahead. I tell my younger friends (the twentysomethings) to think of it as freedom planning.
I like that Lily. I think you are correct that just the thought of retirement planning can create anxiety. I think it goes back to the comments earlier from Rob where breaking down savings and financial goals makes it less intimidating and more manageable.
Jim
I agree that retirement has nothing to do with how much money you have in the bank. But the attitute about the future.
You can have anxiety about the future in your 20s, 30s, 40s, and proper planning may help to give you a piece of mind.
On the other side of the specturm there are people who don’t worry at who live with the attitude of “flying by the seat of my pants”. And these people make me anxious as well.
These are the people who max out their credit cards, with minimin payments. Buy the largest house/car then go out to the food bank during x’mas.
For example building a 2 million dollar house in your 50s with 2 children in university doesn’t make sense to me at all. You are tying up all your net worth, and posibly having an empty nest soon.
We will be baring the responsibilty of bailing these “rich” boomer guys out in the future.
So in the mean time do you choose to live your life like you are “rich” on the surface? Or do you choose to reevaluate whats missing in your life and plan it around what you can do with or without a large nest egg in your “retirement”. Will “retirement” be even possible or many will have to work till they are dead in the ground? Only you can decide how to view your values around money…..
This makes me think about the book, the millionaire Next Door which talks about unasuming wealth. It’s the difference between actual wealth vs the perception of wealth. Hopfully good planning helps people to distinguish the difference. True wealth is the best way to reduce anxiety and stress. Sometimes the perception of wealth actually creates more anxiety. thanks for sharing Zoronqueen!
So I guess my “burying your head in the sand” approach to retirement isn’t the best approach. Thanks for the wake up call!
Hey Brian, It’s definitely and approach but just remember to come up for air from time to time. And when you do, don’t just take a breath and stick your head back into the sand. Look around! You might be pleasantly surprised at what you see!
Enjoy your new view!
Jim
Your article has truly planted a seed of both excitement and anxiety. My husband and I just recently had a baby boy and it is clear just how much more important it is to manage your money well in order to meet your life goals/dreams. I am anxious because it is obvious that I have so much to learn about the many investment and savings options out there but also excited because we have at least started saving for retirement.
I can honestly say I have not really taken the time to plan what I want retirement to look like. I am now planning to spend more time learning about my options and I am going to start with going to your website!
I love all these comments. I think all these comments because anyone that reads not just my article but all these other insights can’t help but benefit. I really appreciate the sharing that has happened on this post! As Mr Ham said earlier … a little anxiety is not a bad thing especially if it motivates you to change and improve.
Retirement Anxiety, what a great topic. I took early retirement after a family illness and didn’t have time to think too long about it so maybe suffered the anxiety afterwards. lol. When you’re blindsided by illness you really can really be glad for the planning done earlier in life so your ideas on planning ahead are terrific! With planning one can relax into the process that retirement is.
Having the money and time to explore what you want to do in this next “chapter” ( as Lizzy suggests the plans often change) can make your current dreams a reality.
Thanks for the advice Jim. I am certainly getting my young daughters to start thinking now.
Thanks for sharing Linda. The best teachers are the ones that have lived the actual experience. Despite the circumstances, I am happy that planning ahead served you well. I also love that you want to encourage your daughters to plan ahead as well.
Jim
Jim…I like this blog and feel your thoughts are well founded. In my opinion, retirement is defined differently by each individual. And, a comfortable retirement has an even more personal definition. Balance is key…enjoy the “now” while determining what you want your future to look like. A plan is never a bad thing….and being “present” in an evolving plan is a really good thing.
Well said Allison. The irony of it is people who plan know that the present is part of the plan. Balance is key but so is planning. they are also not mutually exclusive. You can have balance without planning. You can have planning without balance but you can also have both balance and planning.
Cheers!
Jim
Love the idea that retirement is personal and that planning is key. Once the ball is rolling, one less thing to worry about.
Thanks Jen. The other way to look at is once the ball is rolling the momentum makes it easier to keep going. Retirement planning is a process and not a one time decision. It’s important to enjoy the journey. I think retirement planning can be fun and positive instead of stressful and scary.
The biggest problem is all the uncertainty on the spending side of retirement. How much (and how long) are the kids going to need for post-secondary tuition and living expenses? Will I be a fancy restaurant every other night guy, or just a Swiss Chalet once a week senior? Of course, working is a great way to limit spending too (no time for shopping or travelling). For now my strategy is to stay on the hamster wheel as long as possible.
Hi Rufus (I love that name).
The future is scary and tough to predict. Here’s something I often suggest: rather than worry about what spending might look like in the future, look at your spending now. Are you a fancy restaurant guy now or are the closet Swiss Chalet lover? I’m neither. My idea of an indulgence when it comes to good is a great sushi dinner with my wife or a small group of friends.
I think you are who you are and your habits and patterns today will tell you more about what you should plan for in the future. I said it in a comment earlier . . . for most people, retirement is an extension of the life you are already living.
Cheers!
Jim
I think knowing I have a decent pension helps with the anxiety. However, I have taken different paths in my career because it will make my retirement income higher. and things can happen that completely change your plans, Be prepared the best you can, thanks for the column REally enjoyed reading it.
I like it! Be prepared! That’s what retirement is all about . . . looking into the future to make the future as predictable as possible.
As for your pension . . . I see this day in and day out! People who retire with a pension have more success and stability in retirement. For most people, their pensions are significant because they were a form of forced savings. I often ask people if they would have saved that money if it were not mandatory and the employer did not put part of the money in for them?
Thanks for sharing Cynthia!
Jim, planning is a given. The problem is that one has to take into account that expenses are rising faster than ever forseen. My mother, for instance, is a point. We figured that if she had $4,000 a month, she would be fine for as long as she lived. This, in fact, isn’t going to happen and she is 89 this month. Her monthly expenses are more than the $4,000 now and she is in a seniors home. Gosh only knows how much she will need when, and if, she goes to a nursing home. I look at what I have and really wonder if it is going to be near enough.
Thanks Sherry, Inflation is very topical and very real. Every retirement plan needs to incorporate inflation as a key assumption. It’s important that assets and income are structured with some form of inflation protection. Inflation is one assumption in retirement planning. Here are some others to think about:
http://retirehappyblog.ca/things-you-need-to-know-to-plan-for/
Jim,
I have been lucky, forced to save. Some ware around 5 or 6 I was made aware that one should not steel and should save a portion of everything earned. That stuck with me until I graduated to the now generation, some where around the time I got married. Instant gratification is what I wanted, a house, a car & children.
Now as I said I am lucky, but society doesn’t do enough to stress about retirement planing. I one is all alone and their expectations low it is a cake walk. There is CPP @ $9,900 and OAS @ $6,200. You won’t starve but you are not leaving on vacation.
Spread the word.
bOb
Thanks bOb and congratulations on saving since the age of 5. I’ve started my sons at that age too.
What do you think society need to do to help people plan for retirement? Government programs like CPP and OAS are a start but what else should the government be doing? How much of this should sit on societies shoulders vs our own shoulders? Thanks for help us each to ask these questions.
Jim
Jim, I always appreciate how you present retirement planning. Practical, simple, and to the point. Planning does ease anxiety and is definitely worth our precious time. My parents planned for their retirement and are now living a life I am envious of….winters away and cruises every couple of years. I hope my planning will allow me to do the same! By the way, my first blog post ever!
Congratulations on your first blog comment. Hopefully it’s the start of many.
I appreciate the nice comment. Sometimes I think we complicate things too much. I believe simple is better and that common sense is not common enough. Sounds like you have good role models to look up to!
Thanks to everyone who has commented on this post. It’s been a lot of fun hearing everyone’s thoughts. I am truly amazed at the quality of comments posted. I hope it inspires others to share their thoughts on retirement planning.
Spread the word and let others know about this post and encourage others to share!
Sincerely,
Jim
Great article and discussion Jim!
I started saving and dreaming of retirement as soon as my student loans were paid! I love the idea of a simple low-cost-of-living senior life, but recently I’m realizing the reality and unpredictability of family life. Will my parents outlive their savings and need our help? How long will we be supporting our kids? Will I be demented by age 55?
I will continue to plan and prepare, but not worry, because whatever will be will be. You’re right, the anxiety comes when we do nothing.
Thanks Aalo! I think it’s great you started early. That in itself goes a long way.
I think watching our parents has a great influence on our own perceptions of retirement and how we plan for the future. I know when I look at my dad at 80 years of age, I actually get inspired at how content and secure he is.
Thanks for sharing!
Hi Jim,
This is a great article that really got me thinking.
I’m enjoying a great book right now called “Thou Shall Prosper” by Rabbi Daniel Lapin and in his chapter entitled “Never Retire”, he explains that humans are potentially more useful and profitable as they age (barring of course, major health challenges or dementia) and counsels us to think of “transitioning” to our next career rather than “quitting work” at age 65. This is certainly what I plan to do. I envision myself in business and doing consulting, writing and teaching in my golden years.
Your point is well taken that retirement is personal, and that we should all plan and save for the future, no matter what that will look like for us (and sometimes we just don’t know). I personally hope that I don’t have to touch my retirement savings and that I can pass it all down to future generations.
I look forward to reading more of your great insights on this topic. Keep up the great work!
Hey Christy,
Thanks for the comment! I’ve always said – if you can’t see retirement as better than the life you are currently living, then why retire.
Work is very fulfilling for many people. I see myself working in retirement as well.
As for passing money down to future generations, I think that’s great, just make sure it’s not the RRSPs because they won’t get as much as you think. The worst thing to do is die with too much RRSPs.
Yes, I understand that estate tax can be quite a bear! Have you addressed this topic of passing on wealth in another post? I look forward to hearing your advice on this subject.
Great article Jim! I think you make a lot of great points about the importance of planning and from my own experience, the big concern for our clients is the unknown. Most people really have no idea if they are doing the “right” things. They just keep working and saving without any idea where it will eventually get them. I find that even if I have to tell people that they are not saving enough or that they have to work longer to reach their goals, they are just relieved to know.
Thanks Shannon. It’s great that you emphasize the reality that anxiety comes from not knowing. Once you know, you can then take the necessary steps to make retirement the best years of your life!
Hello Jim,
Great article.
I have always been a “planner” and have been saving and investing since high school. My father, an accountant and businessperson, made financial security and calculated risk a regular part of our world.
As a result of the information and inspiration that I have found in articles, presentations, and educational seminars, such as yours. I look forward to retirement and I am just having a difficult time narrowing down the list of places to travel to and experiences to have!
I also have no illusions that I will ever quit working entirely, and with four children around, plan to be busy visiting them whenever they will allow me to.
As a comment to all, I enjoy hearing you present and find your message inspiring. Having a plan certainly does lower the stress and anxiety! In today’s world we could all use a lower dose of anxiety.
I enjoy reading your work find your approach more realistic and honest than much of what is provided today.
Thanks Jim!
Thanks for the really nice comments Tamara! I really appreciate it. It sounds like you have perfect role models in your life. From my experience, that make a big difference too!
Jim, I want to say that I like your common sense approach to this sometimes very confusing world of finances. I look forward to attending some of your seminars. I don’t subscribe to Twitter or Facebook but you definitely have my vote.
Thanks so much Delores. Common sense sometimes is not common sense enough. I really appreciate the nice words and hope to see you at one of my workshops!
Jim
Re: “Planning is not the only way to reduce retirement anxiety. You can reduce your debts, save more money, increase your income, watch your spending, etc.”
Indeed, this is an effective prescription for “retirement anxiety”… and perhaps the most important.
Throughout our married life (now enjoying year 34) we have tried to implement all four of these strategies – and not surprisingly, the “planning” (structuring of our portfolios, insurance, wills, etc.) followed quite naturally. We were very happy to continue to live – and raise our family – in our original 980 sq.ft. “starter house” (although we did add on a modest renovation five years ago). We chose to purchase nearby recreational property (which has appreciated substantially) rather than join many of our peers as they travelled to sun destinations. Our credit cards have always been paid in full every month, and we never took on more debt than we were sure we could handle – and then proceeded to pay it off as quickly as possible. The RESP that we contributed to since our son was a child, has completely paid for a 5 yr. university degree, and our son has been able to start his own adult life, debt free – with savings/investments that he has initiated on his own.
Were we employed in highly lucrative careers? No. Have we lived frugally? No… just mindfully. We enjoy going out for dinner every Friday night, drive nice (but not new) vehicles, buy few “stuff” – but do buy quality when we do (because it is going to be with us for a long time). And now that we are transitioning into life after work (in our late 50′s), we feel confident that we will be able to maintain our current standard of living, with few modifications. Oh – except we are going to travel more, and spend more time at the lake!!
Even when our financial circumstances clearly indicated that we could “move up” into that dream house, travel abroad, buy that shiny new sports car etc. we were fortunately disciplined enough to step back and evaluate what those things might mean to our overall (and future) quality of life. Really… when you objectively evaluate things by this measure, there are relatively few things that remain as “must do’s/gets”.
It has been very gratifying to see that our son has also benefited from our family’s approach to not only finances, but to a more personal examination of quality of life. Perhaps we are not as aware as we could be, how our own planning – or lack of – affects much more than just our own “retirement anxiety.” It certainly raises the stakes.
Much thanks for the important work that you continue to do, Jim.
Wow! What wonderful words of advice. I could not agree more about all the different ways to reduce retirement anxiety. I aspire to be a role model like you to my four boys. I think about that a lot in my life so I really was touched by your comments. Thank you
Jim
Hi Jim, thanks for this post. Someone very close to me is suffering from retirement anxiety, and it is affecting their every day happiness. They’ve recently started a 16 month program and have likely pushed their retirement back a year to complete said program. But its impossible to go back in time to save and plan differently. Is there a “when” time to start planning for retirement? I am in my 30s but am still working towards an actual job or career. I keep thinking I can start saving whenever that happens.
Great article Jim! I think retirement planning is like a lot of things in life – we fear the unknown, because it is an unknown. Once we start working on the issue and learning – that can really help reduce stress.
Thanks Mike. You rock! It’s great to have sites like yours (MoneysmartsBlog.com) to help people reduce and cure retirement anxiety!
Great article Jim! I guess I should start to focus on the big picture, instead of just thinking about the next year.
Almost all retirement planning articles and tools/calculators assume (1) will get CPP/OAS and (2) married and (3) years of RRSP contribution. What about retirement planning techniques for those immigrants who will be getting only a small percentage of CPP and OAS and who are single and had a limited number of years to contribute to RRSP? A single person doesn’t live on 50% of a couple’s expenses …!