Today we welcome the beauty of summertime, most grateful to enjoy it. Two-thirds of Canadians now have at least one vaccination (slowing in recent days) and the second shot is rolling forward with increasing speed. This helps re-open our economy and lets more households participate in the benefits, both financially and personally. We haven’t seen most of our family in a year; we’re hoping to remedy this soon, anxious to celebrate getting together again. Today now, we peak into your opening responses to last month’s questionnaire – huge thanks to everyone who participated! Over the months ahead we’ll dig in and uncover many insights for your financial plans and personal goals.
As you know, I always appreciate your thoughts and anything you may be wondering to strengthen your personal plans and confidence. I know if we gathered around a table to talk about questionnaire results we’d find far more than my notes here can capture. So please reply to me with additional comments and questions or anything that comes to mind for you. You’ll also realize the questionnaire is in no way scientific but helps tease out key areas of comfort, concerns, and confidence whether you are now or nearly retired, or you are still paving the way to your financial freedom.
As a closing treat we have a youtube in which Whitney Hammond – many of you have met her at SWM or client events – shares an illuminating story in her Wisdom To Wealth group, and here also with us. Be sure to catch that – the link is below.
Question #1: RETIREMENT STRANGER.
SORRY, I’VE TRIED SHARPENING THIS PICTURE. I CAN RE-SEND BY EMAIL TO ANYONE WHO ASKS ME FOR IT.
In this and most questions we had 100% response (no skips). Essentially there were 33% who said they feel unsure, like complete strangers to their own future. They cannot bring it into focus. With too many years ahead and any number of challenges or setbacks to face along the way, they feel the future may have to wait. A Facebook page put it this way: “I’ve calculated I can retire … just after I die.” Another mentions “Free at 83!”. That is not the plan. Indeed our planning process ensures – even guarantees – that approach will never be your plan.
Question #1 arises from ‘behavioural finance’ as I shared a few years ago that people even in their 40s and 50s miss seeing how today’s saving/spending will affect their future rewards. Altering a life habit of tiny purchases and impulse spending (countless are the ways) can add an extra $2000 to $5000 per year to your savings … plus healthy tax-refunds, to greatly accelerate your retirement goals.
Sadly, many can’t see skipping a $7 pleasure today so some future stranger (“future self”) can reach bigger and better rewards sooner. It’s a big reason why 70% of North Americans fear the future – in some surveys that’s how many say their retirement will hinge on winning a lottery.
How do we fix this? … by introducing you more intimately to your future self. It’s like the Freedom 55 commercials where a young person on a beach meets the age 55/65 version of themselves, financially secure and enjoying the life of their dreams. It’s a vital discussion that has always been part of our planning: for instance, “to you, what’s most important for your future?” Connecting to our future-self helps us make daily decisions that will pave and prosper all our tomorrows.
People often get stuck with wrong assumptions or questions for their retirement. Like, “can I live for today and let the future take care of itself?” That needs a prior question such as, “Can I find a way now to live on 10% or 20% less income, still enjoying my life today, in order to accelerate and upsize my personal goals and future dreams?” Phrased this way the answer can be “YES”. Regardless what we’ve been doing, thinking, or worrying about, connecting to our future will help it all make sense – and it will be easier. Our plan links your decisions today to the results and rewards you will be living tomorrow.
37% shared that they are already retired and largely enjoy their life and next steps. Hidden in the “unsure” group (as we’ll see in a later question) are several who say they regret losing something they had enjoyed while working. Another time we’ll touch this further as I did in the Halton Retirement Study (free download – enjoy personalizing your own retirement guide / dreambook). Since retiring they’ve come to experience less income, friendship, purpose, sense of identity, and so on.
At least three lessons we can pull forward:
- If you are nearly or already retired, we certainly combine the Financial and Lifestyle part of your holistic plan, to clarify how you can embrace new experiences and values when a career is done.
- You can mentor and share ideas with younger friends and family, encouraging them in activities to enjoy when work turns to leisure. Who can you help? Who in your life is working so hard, paying debt, raising children or paying for education, caring for parents, that right now they cannot see retirement from here? When and how can we share these types of conversations to make their journeys a bit easier and less stressful today, and expand their confidence for future goals?
- At any age we can all learn to expand our interests, leisure, enjoyment, activities, friendships and connection, so life stays forever fresh (because no one wants a dull future).
Near 75% of retirees say they enjoy retirement – or are confident reaching their destination because the “plan” has laid out the steps to get there. All this despite the fearful anticipation in social media and among friends. Most retirees confirm they are pretty happy. They’ve adjusted: hopefully they prepared well in the years before retiring, or otherwise they’ve adjusted life to fit their means.
So we learn that by actively preparing and planning your life and financial future you will be happy with the rewards you achieve. We don’t put money in a wishing well and hope for the best: our path and our plan are vital. We have the compass and the map to reach the summit of life’s rewards, and all you want this to mean for you.
Remember what I’ve asked you many times, the “one more thing” question. When you tell me what’s important for your future, and we’ve worked out how to achieve this along with a healthy buffer for safety and emerging needs, then I ask you, “What is one more thing that, if you could have it, would truly add to your enjoyment and significance in your future – for retirement or family wellbeing?” This easily relates to our Question #1 here as “how I’ll choose to enjoy it” and indeed “shaping next steps” in our Lifestyle and Retirement.
LOOKING AHEAD
- Next month with a mid-year investment update we’ll see more of what you’ve shared in the Lifestyle and Retirement Poll (click to review).
- Whitney Hammond’s video in her Wisdom To Wealth group answers a question of housing values and pensions in the absence of other personal savings. Click the link now for two minutes as Whitney reveals why “You cannot EAT your home in retirement”.
- I look forward to seeing you soon: happy summertime!
Yours in Financial Security for LIFE!
Brian Weatherdon, MA, CFP, CLU, CPCA. 905-637-3500
627 Guelph Line, Burlington, Ont. L7R 3M7. 1-877-937-3500
Brian@SovereignWealth.ca.
Certified Financial Planner, Certified Retirement Coach
Author: A Lifetime Of Wealth — And How Not To Lose It (2013). Protecting Life, Loved Ones, and Future Dreams (2013). Your Business, Your Retirement: Halton Retirement Study (2015).
** This monthly letter touches on key strategies in Canadian and global investing and financial planning. This letter is not an offer to sell any kind of security, insurance, or program. Historical returns and risk measures are not a valid guide to future performance. Returns are from publicly available sources and research from a variety of firms including but not limited to Canada Life, CIBC, Dynamic, Mackenzie Financial, RBC / PH&N, and more. Opinions in this letter belong solely to the author and no other body is responsible for the content expressed here. We value opportunity to coordinate with your legal and accounting advisers to further your financial goals in home and business. We are grateful always to receive your comments and questions.