When it come to your retirement the numbers are important, but they are not the only thing. There is math to it, but there is also the question of what kind of life do you want to live?
People ask how much money they need to retire and the answer is… it depends. It depends on how much you plan on spending, what is your burn rate for the next 10, 20, 30 plus years? Anybody can “retire” at any age, if they adjust their lifestyle expectations. Still, a lot of people will say, what is your number? And the number they are referring to is always that number, the one that once you achieve it, then you will have enough money to retire. Yet, when we talk about retirement, technically, it is used to refer to an event, not a number. It could be the day you leave your job or hand over the reins of your business to the next in line. It is not always the case of being pushed off the demographic cliff. In some cases, the company forces you to retire by the age of fifty eight for example, which does happen, so you might be forced into it earlier than you thought. Alternatively, you may have accumulated sufficient funds to retire early.
Yet Canadians are living longer than ever, the average lifespan of Canadian men and women is 85 and 87, respectively, but the majority of us are not working through retirement. In fact, we are retiring earlier, with the average retirement age in Canada being 60. Despite this fact, 4 in 10 Canadians, 40% of which are over fifty five, say they are falling short in their savings for retirement. Almost half do not have a financial plan.
Whatever the reason, we can confidentially say that retirement is not a number. It is not the amount of funds you have accumulated, it is not an age as you could retire any time and, it is not an event, it is the starting of a new phase in your life. It is transition, not a destination. We hear a lot of people talk about when they retire, they are going to do this or that, and then they sort of see retirement as a utopia. The likelihood is that retirement is just another chapter in your life, in fact the Japanese refer to retirement as your second life. Time to be the best you and focus on things that bring you happiness and inner peace.
Stay happy, stay safe, stay well!
The CM Group