May 2021 SWM Letter: Flexible Retirement — Any Age

//May 2021 SWM Letter: Flexible Retirement — Any Age

May 2021 SWM Letter: Flexible Retirement — Any Age

Wonderful springtime:  nature is alive and beautiful all around us.  Our letter today celebrates progress on covid, also a note on inflation as people have been asking me.  Mainly we’ll take a mountain pathway on the subject of designing your own mini- or flex- retirement (ie. freedom to shape your own goals and plans) while ensuring an enduring reservoir for life-income and retirement dreams.  As well I will ask your help for a moment with the “Lifestyle and Retirement Poll”.

This is for you as we include:  (i)  people in any stage of career wishing to mini-retire for study or travel,  (ii) anyone in their final laps 5-10 years pre-retirement, also  (iii) current retirees who after covid restrictions end, are eager to fully resume their chosen retirement activities and lifestyle.

Covid News.

Canada has seen the fastest rate of vaccinations in recent weeks, speeding ahead in global rankings from #50 and now #6 (Our World in Data).  Ahead of us are Israel, UAE, Bahrain, and UK … and as we gain #5 we’ll push U.S. to #6.  Then it’s Europe, Turkey, China, Brazil, Mexico, etc.   Next week we’ll reach a new milestone:  50% of Canadians having their first jab.

  • With vaccinations and health cautions we will enjoy new openings and freedoms this summer and fall, wherever people gather for work and leisure.
  • Getting to 75% and beyond will be tougher than the first 50%.  Many have anxieties and fear getting the shot.  “Herd immunity” needs nearer 80% vaccination and eventual boosters – especially due to variants.  It’s an open question therefore whether our neighbours coast-to-coast will reach full immunity.
  • Any untreated population in the world is a petrie dish of unpredictable variants.  We have three or four main variants among others, and while any population remains at risk we’re only a day away from potential new infections.  Every effort is vital:  tracing and containing current cases, vaccinating against new infection, and providing vaccines to people everywhere worldwide.
  • Pictures can be fuzzy but this much is clear from the WHO at May 9th.  Canada’s third-wave of covid has been exceptionally hard, yet deaths have been amazingly lighter than earlier waves (see the dark blue line).  We are more grateful than words can express, to all our leaders in health care and medical services, vaccine development, also our legislators who try their human-best to win this global war against covid.  Patient persistence will prevail against our unseen enemy.

Questions about Rising Inflation.

This worry is odd to me as we’ve known since last summer, inflation would rise from last year’s artificially-low base.  Here are three key reasons for rising costs today, and how they will slacken again in due course.

  • Laws of supply and demand:  eg. no one bought gasoline last spring so the price plummeted.  Everyone bought lumber for decks and other home renovations, lifting prices 250% to 400% in the past year.  When lifestyle changes dramatically, spending changes to match that.  Naturally we’re seeing higher costs in what people want most (think of leisure-wear, home-renos, technology) and lower costs for anything we’re postponing (formal-wear and business trips).
  • Financial stimulus to homes and businesses.  Governments had a choice between opening the taps for massive stimulus even though it would in many cases be too generous, or determining in advance who most needs support and only spending money there.  Our auditor general reports how billions could have been saved, but a more frugal approach could have left countless families wintering on parks and sidewalks, businesses falling bankrupt, and markets tumbling 2x more and 3x longer.  Stimulus funding prevented massive devastation. Homes and businesses as able have spent and invested to lift our economy.  No worries as inflation hits 3% over last year’s downswing;  this helps sustain the “2% average inflation target” for seasons ahead.  In fact even now, inflation since this season 2019 is predictably 2%/year … just where the Bank of Canada has been aiming.
  • Labour shortages, but not quite as seen in the news.  Canada in early May had regained 90% of lost jobs (compared to U.S. at 63%).  There remains however a lack of skilled applicants, besides how social isolation has hurt travel, entertainment, and restaurants.  Two major fronts are vital:  (i) healthy openings to lift public-facing jobs,  (ii) skills development for trades and “STEM careers.”


Now an energy boost:  with the three thoughts below, and a confidential poll, please tell me your thoughts, what comes to mind for you!  Doing this together we can enrich this discussion for everyone with their unique goals and dreams, now and for the future.  As promised, here is our anonymous poll: explore and enjoy it here please,  Lifestyle and Retirement Poll.

Adopt a Stranger.   Two years ago I shared how some would buy their favourite at Starbucks while starving their RRSPs, figuring a brief treat today is better than a the future rewards of your desired retirement.  This pictures the “future me” as a “stranger” to myself today.  If you recall the marshmallow experiments (awesome video here) you’ll know people are more or less willing to delay today’s rewards to gain far more in the future.

Our goal of course is that you enjoy a highly rewarding life today while also securing and expanding your future rewards.  Our planning lets you do both.  If life’s work is sometimes too crushing today, or illness could rob our future, then you certainly deserve your rewards now today.  … yet planning this properly this doesn’t mean losing your future and the hopes/dreams you hold dear for retiring.

Behavioural psychology says it depends on how we see our future-self.  Do we see the “intimate connection of myself today and in future” or act as if our later-self is a complete stranger?  One who enjoys reasonable treats now, believing also to gain a stronger future, can identify with and magnify their future self.  Like the old Freedom 55 ad on TV, you’d see that it’s YOU on the tropical beach or wherever you will be enjoying richer rewards for retirement.  (Someone who cannot so identify may starve their future self and be left lamenting their losses.)  More to come on this:  with your results from the poll above, we’ll share how budgeting for retirement can fit very well with your current needs and goals.

Mini-Retirements.  As my financial career opened in 1995 I met a woman near 50 who was retiring for a year to sail in the South Pacific.  This was a temporary retirement.  I have younger clients today eager to live in Europe for a time after covid passes, blending a partial/mini-retirement with work-while-traveling.  I’ve done this myself a few weeks at a time but some push the envelope much farther, 6-12 months or more.

What could a partial- or temporary retirement look like for you or your family?  In an era of flexible/gig careers without traditional pension plans, it’s all on you:  how you work, how/when you retire, and how to save and invest for the life you choose all along the way.  Let’s talk about FREEDOM TO LIVE and work as you want, and how we can together fit the financial puzzle-pieces for your personally designed lifestyle.  … Along with boosting happiness and satisfaction, we’ll review flexible approaches to financial- and tax-planning that can make this possible for you.   (Be sure to click “done” at the end of your poll responses.)


Retirement Seasons.  I often speak of “retirement horizons” picturing the landscapes and mountain ranges of our future.  We are designing and defining the different seasons of our future aging, and how to enjoy the best in each of those seasons.  Many of our clients retiring in recent years have enjoyed “upsizing retirement”, expanding their experiences in the first 5-15 years.  Afterward they ease into a less costly lifestyle by 80 or 85,  … keeping savings safely intact for later costs of personal care, comfort and dignity as they age.

This approach lets you spend more in early retirement as health and strength allow the most vigorous bucket-list activities.  Eventually, activities and spending ease, helping preserve a healthy nest egg for costs of comfort and health as the years lengthen.   (If you missed the poll, please click now and add to this discussion.)

We’ll offer more in upcoming letters but first I want to hear from you.  You can add richly to this discussion.  Have fun with the poll – I’m eager for your responses.  Mark your “best or closest answer” in the multiple choice.  If you have a moment also call or reply to me about this experience and any stories it brings to mind for you.

As we each consider our personal retirement plans (partial-, mini-, or full) and the seasons of life in front of us, my role and that of our SWM team is aligning every wish and every financial detail to protect, achieve, and secure your goals and dreams.

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 

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.

2021-05-20T11:03:57-04:00May 19th, 2021|