All these beautiful ads showing retired people happy and in great shape, shorts and polo scratched on white sand beaches, a sunny golf course or in a motorized fully equipped have something to dream! We all aspire to this kind of retirement, right?
Whether the retreat seems far away or is fast approaching, there is a strategy to your measure to prepare it. Because we must not be deceived, these beautiful ads are realistic … to the extent that you have taken the right steps to get there.
An ideal world
In an ideal world, preparation for retirement begins as soon as you enter the job market. In other words: from the entrance, watch the exit! Thus, the financial effort will be much less important since it will spread over the duration of your working life. Those who are slow to prepare financially for their retirement will have to work hard.
The main question to ask is not “will I have enough money to live in retirement? But “will I have enough money to maintain my standard of living when I retire?” “. Two very different things given that expectations are generally very high for the “blessed” period of retirement. And people are wrong to believe that they will spend less on retirement. Expenses will change, money will go elsewhere, but the level of spending will remain essentially the same. By the way, do not we spend more on weekends than on weekdays? Free time is expensive! The decision to dispose of a car may make a difference, but the budget items that have a real influence on the total expenses are not legion.
Are you prepared?
While some people are adequately financially equipped to achieve a comfortable retirement, the vast majority of people I meet (public administration employees) rely on their pension fund for retirement. For those with 35 or more years of service, it is quite possible that this pension plan, combined with the Québec Pension Plan, is sufficient to meet their needs. But it is essential for people who do not have this maximum of years of service to supplement with another financial vehicle such as RRSPs, TFSAs and non-registered investments.
And thanks, do not make the mistake of confusing the budget aspect and the financial aspect! Because financially, from the moment you reach the maximum number of years of service allowing you to have your full pension (now 38 years old), the additional years worked are only for the employer’s advantage … while you have lost your beautiful years of well-deserved retirement.