Are you surprised that people with higher income and significant business experience would be worried about money for their retirement? Two greatest worries in this group focus on money (life-income) and health (personal and family). Don't assume by the house, car, or lifestyle that people are set for life! Nothing could be farther from the truth, and they know it! Under the successful veneer is a suspicion that life can be fickle, health can turn, unforeseen needs arise, and we need prudent planning to protect our later years.
Continuing our 9-part pension series from recent surveys and interviews we've been discussing: (i) LIFESTYLE ... (ii) PURPOSE... (iii) LEISURE.... (iv) TIME... (v) IDENTITY AND ROLES.... Now moving ahead to question 6 we talk about the chief anxieties we can address now to more successfully enjoy our future.
Your response to Survey Question #6:
Two Greatest Anxieties I could have for Retirement.
I smiled as someone noted with their survey, “I don’t have anxieties – in fact I look forward to embracing all of the above” …by which I assume they mean the fullness of a happy and fulfilling retirement.
Surprising perhaps for a higher-than-average income group, fully 60% say their greatest anxiety is about having enough money. These are the successfully employed, or a few are successfully early-retired, and nearly half own or manage business. If responses to the earlier questions suggest these are successful people who look forward with a high level of resourcefulness and options for their future, the present question uncovers the persistent insecurities that accompany their forward journey.
When Q.5 showed 15% expecting to identify in the role of “caregiver”, Q.6 here now doubles that to 32% who put “Caregiving for parents, spouse, (grand)children” as among their two greatest anxieties.
Many of the written responses add their concerns about personal health. Is retirement the doorway to the END of the road? Will we suffer an ongoing decline in our health? “Being healthy enough to do the things I enjoy” …is certainly a core value we all would embrace.
What may this mean for our pension choices?
First to say, reviewing your pension options and deciding between the Flat or Flexible approach will be a vital part of your own process, and you should do this with someone who is highly qualified and able to demonstrate their ability to provide independent counsel on this matter. You want to clearly see both sides, the advantages and risks, whether you select the flat or personalized approach.
If the pension plan is suitably funded and you feel comfortable and confident getting a fixed allowance for life, this can be an easy and suitable choice for you. Some however want a more FLEXIBLE INCOME through earlier and later years, while also perpetuating a higher estate value for family. Don’t bury the risks or blind yourself to what lies beneath each choice; make an informed and conscientious decision as to how your pension can offer the greatest value and fulfillment for the life you want to enjoy.
Second, consider if health-benefits may or may not accompany the pension design that you choose. Some employees are fortunate in having health coverage for life; others perhaps for a few years or an unguaranteed duration. Commuting a pension could suggest you have benefits through a spousal plan, or you’ll be paying out of pocket for health coverage. Be sure this is all considered in your choices.
When illness hits ourselves or a close family member, you know the expenses may rise sharply. Insurance can cover all or part of such costs (including critical illness; long term care insurance). Or perhaps you’ve designated some other saved assets specifically to cover such emergencies or prolonged chronic decline. A recent figure I saw put such costs on average at $84,000 /year … or where I live we could say that “reasonable” in-home or facility care may be arranged for $5000 to $7500 per month depending on the care that is needed.
How this affects you and me is vital, and it’s something we will most likely face in our years to come (so would you agree, it’s best to plan and prepare ahead now).
As it concerns our parents of course, their health costs could easily shrink a family estate by $100s of $1000s. Have this in the back of our minds as we review pension-choices: (i) were you expecting an inheritance? (ii) are you expecting to pay out of your pension for your parents’ (or children's) health costs? (iii) and considering these things, could personal and family health-costs be among the decisive factors for your pension decisions?
Our other anxieties are to avoid particular losses in the following areas: (i) purpose and significance to enjoy each day, (ii) being with our family/friends, (iii) enjoying time and leisure experiences. If we could share the stories, if you could hear the individual voices behind each of these replies, it would be a colourful and rich testimony to what retirement can become for us ….if we manage to avoid key losses.
Pension choices are part of the financial fabric of permitting ourselves the life we choose ....now in good health, and eventually also to reduce anxieties when declining health would impact our comfort and happiness at a time of life that is more tender than ever! Pension is about all this: things to do, people to be with, activities and support that can enrich our experience each day through the rest of our lives.
Is now the time to get professional support - to discuss these areas and what is most important to protect and enjoy your life forever? Phone or email me today ...Brian Weatherdon, MA CFP CLU CPCA CRC, MDRT. 905-637-3500 x 223 627 Guelph Line, Burlington, Ontario. L7R 3M7. 1-877-937-3500 FREE x 223 Certified Financial Planner. Certified Retirement Coach. brian@SovereignWealth.ca