How is retirement changing?

As the majority of the population is moving towards or in retirement typically defined as age 65 or older, we are understanding how retirement is changing. The recent Sunlife 2019 survey offers some warning signals that find retirement is not all that it is cracked up to be.

November 2019 Sunlife survey offers some sobering statistics:

  • Nearly half (47%) of working Canadians believe there is a serious risk they could outlive their retirement savings
  • 44% of working Canadians expect to be employed full-time at the age of 66
  • Nearly a quarter (23%) of Canadian retirees describe their lifestyle as ‘frugal’
  • 72% say their retirement is not what they were expecting
  • Among working Canadians, 75% don’t have a financial plan

The Sunlife survey is an interesting contrast to the recent BMO confidence survey by Canadians on the future of their finances.

Is Investor Confidence Connected To Generational Differences?

A majority of Canadians (80%) feel “confident” about their finances — and yet relatively few are confident about investing, according to a survey from BMO InvestorLine.

The online survey, which polled 1,000 adult Canadians from Oct. 12 to Oct. 22, found that only 29% said they were “very knowledgeable” about investing. More than half of respondents (53%) said investing made them feel “stressed.”

Clearly investment advice is an integral part of a lack of confidence Canadians feel. Investment planning is an integral part of any retirement plan.

Counting pennies: the frugal facts

Is there a connection between the 75% of Canadians who don’t have a financial plan and the 80% who feel confident about their finances? The Advisors at Hampton Securities are disciplined to ensure they have an annual review with clients. The value of this approach is that it significantly reduces the financial stress of their clients and encourages more ongoing engagement in their financial future. If you are nearing retirement or in early retirement the value of having a plan or an investment portfolio review can be helpful however you define your retirement.

Don’t plan for retirement, plan for an encore

Have you planned for your “encore” life? You’ve likely seen these statistics: by 2030, as the last baby boomers turn 65, older adults are expected to reach 20% of the population, and by 2050, 19 million people will be in the 85+ age group. Although U.S. based, these statistics are proportionally the same for Canada, if not slightly older. Marketwatch takes a unique look at how “unretirement” has evolved. Picture your life in overlapping 25-year time spans: birth to 25; age 10 to 35; 20 to 45; and 30 to 55. Consider how much you grew and changed during each of those periods. Now imagine the life you will live between 65 and 90, assuming that much of that time you will be relatively healthy and productive.

Rethink your retirement. Enjoy the full article here

What does retirement look like, really?

Retirement is a process of losing and finding your identities. The financial challenges of preparing for retirement can be managed in many ways. It always begins with a solid and dynamic financial plan. The psychological plan should also be invested in too.

The reality of discovering that within an employment capacity, you are indispensable, is jarring. Most of all, the change in the pace and purpose feels unnerving. A delightful read about this transition by Sydney Lagier from the Wall Street Journal offers a common experience. Preparing mentally and physically for non-work activities can not be underestimated. At Hampton Securities Private Client we have many clients who are busier than when they worked full time. For others it is an opportunity to stop the constant scheduling of tasks and travel and more.

What changes in retirement?

Once you leave your employment you need to “replace your support networks you had through work, spend more time than ever before with your spouse and find new and engaging ways to stay active.” advises the American Psychology Association (APA). Having prepared your financial well-being, what about your psychological portfolio for retirement?

People need to invest as much if not more time in their social or psychological portfolio planning before retirement, to figure out what makes them happy.

Psychologist Jacquelyn B. James, PhD, of the Sloan Center on Aging and Work at Boston College, has found that only those people who are truly engaged in their post-retirement activities reap the psychological benefits. “Retirement is not like jumping off a diving board, it’s a process and it takes time,” she says. “There’s a lot of work people can be doing leading up to retirement to prepare for it.”