Kevin Laliberte
Editor, Smoky River Express

While the vast majority (87 per cent) of adult Canadians hold RSPs, few (14 per cent) have a retirement plan outlining their financial goals and how they plan to achieve them. Even more startling is the fact that less than one-third of people have tried to calculate how much they will need to retire comfortably. Have I got your attention yet? Well, read on because retirement planning is something each of should be taking into consideration to make our retirement years less stressful and more enjoyable. And while an RSP is the cornerstone of saving for retirement, experts remind us that it shouldn’t be confused with a retirement plan. “There’s a growing focus on the changing face of retirement - how people are living longer, more active lives and expecting more from this stage of their lives, but there’s not enough serious goal-setting or discussion about how one’s retirement will unfold,”says Patricia Lovett-Reid, senior vice-president of TD Waterhouse. “A retirement plan helps people answer such questions as whether or not they plan to continue working, where they’ll be living, what their ongoing family responsibilities will be and what activities they’ll be pursuing with their leisure time,” continues Lovett-Reid. “By understanding these key factors, people can then map out their income and expenses more accurately and create a personal retirement income plan.” Although those closer to retirement - aged 50 to 69 - are more likely than their younger counterparts to have a written retirement plan, it’s still a relatively low number who do at 18 per cent. According to the Canadian Institutes of Health Research (CIHR), there will be 6.7 million Canadians over age 65 by 2021, and by 2031 a quarter of the population will be over 65. Canadians also have one of the highest life expectancies in the world. Future retirees will likely spend more in the early years as they travel, pursue new hobbies and help with grandchildren or elderly parents,” says Lovett-Reid. Spending may taper off as they become less active, but with many more Canadians living well into their eighties and beyond, their spending needs will also increase dramatically in their latter years as they require assisted living and other elder care services.” In a recent poll by the company 57 per cent of respondents were able to provide an educated guess as to how much money they would need to retire comfortably. Among this group, the average amount is $727,000. However, experts say there is a huge gender gap between responses, with men saying they need $848,000 compared to women at $532,000. Lovett-Reid says the profound demographic shift taking place in Canada is forcing many of us to rethink how they plan and prepare for retirement. Still, the gap between aspiration, motivation and preparation continues to be wide among most people who intend to retire fully at or before the age 65. The key is to start planning for your retirement as early as possible and remain on track. You may not end up being a millionaire upon retirement but you will at least have peace of mind knowing that you are financial stable and ready to enjoy the golden years.

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