Campfire Musings On Retirement
With Six 58-Year Olds:
Put a financial / investment guy with an eclectic variety of other professional folks (writer/journalist, university professor, environmental lawyer, shipping / transportation safety expert, cartoonist) and when the conversation turns to retirement, it takes various and (for me) some fascinating twists and turns.
Interestingly, 4 out of the 6 of us have (or have spouses with) very good defined benefit pension plans. Probably higher than normal averages for this group.
Lots of real estate among the bunch, 2 of us currently "renters", 1 just cashed out of Vancouver home ownership.
So plenty of variety and in all likelihood, no one will be struggling (too much) as they move forward.
Anybody have a specific plan?
1 (possibly 2, but I was not convinced).
So, of course I went on about that, as I will do when I encounter anyone without a specific plan: It needs to be very specific.
What will your proposed retirement lifestyle cost you? (So many just have an approximate sense of it, but...) if you have more time on your hands, what will you spend your time on and where? and more importantly, will it have additional costs attached?
If you have a pension, how much of that will cover it?
For those who are relying on their spouses plan, what are the survivor benefits?
At least 1 of us has resolved to work until the end of his time (but what happens if you cannot attain the expected income that you need?).
Some of us won't spend all of our money, which also needs to be considered: Estate planning and taxes that will be passed on to beneficiaries (on real estate or other assets). Wills need to be updated.
Having been an executor only once, I know that I do not cherish the thoughts of that responsibility again, especially the lack of specifics. If you want to be remembered well, don't forget to allocate items individually. Just allotting % amounts can be daunting (especially if there are items that need to be monetized) and can cause even the best of intentions to lead to hard feelings amongst the beneficiaries.
How do you plan?
Don't skimp on "do it yourself" (DIY) stuff. Use the professionals, errors can be costly (for everyone) and hard to fix.
And, most importantly, have a Wealth Forecast prepared: get a picture of what your financial future holds for you, monitor it and update it frequently (at least every 6 months), because life is a very dynamic place and uncertainty is the only thing that is guaranteed. So to protect your goals and aspirations from uncertainty as best as is possible, don't just do the "mental math", but get it down on paper (or the modern equivalent) and know how each of your decisions will impact your total net worth and meeting your future lifestyle needs. It also tells you what your acceptable (investing) risk should be relative to your needs and helps to determine how to properly structure your portfolio (for balance and diversity).
It is not an easy process to go through, but like any difficult accomplishment, it will definitely have its rewards.
I am happy to be back after some thrilling whitewater adventure in Canada's beautiful Yukon wilderness, very appreciative of the new technology of rain gear and light "quick dry" materials as well as durable canoes.
Happy to take your feedback, questions and ideas...
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