Retirement today is different from what it used to be. With longer life expectancies, the traditional idea of retirement has evolved, making navigating it more complex. You might be redefining what this stage of life means for you, and it’s essential to plan accordingly.
Working closely with a financial advisor can make all the difference in ensuring financial stability during your later years. The journey begins by setting clear financial goals that align with your long-term vision. Whether you’re thinking about the age you’d like to retire, the lifestyle you want to enjoy, or specific goals like travelling or leaving an inheritance, it’s important to get these on paper.
Once your goals are clear, your financial advisor will help you create a personalized plan. This plan will cover everything from saving and investing to budgeting, ensuring you build wealth over time. But remember—retirement planning isn’t a one-time task. Life and market conditions change, so you must regularly review and adjust your plan with your advisor to stay on track.
Managing risk is also an essential part of this process. Your advisor will guide you in diversifying your investments and reducing exposure to market fluctuations. They’ll also help you incorporate risk management tools like life insurance, critical illness coverage, or long-term care insurance to protect your wealth and secure your future.
As you approach retirement, you’ll need to think about how to manage your money during this phase. Your advisor will work with you on a sustainable withdrawal strategy, ensuring your savings last throughout your lifetime. This balance between maintaining your lifestyle and preserving capital is critical.
But retirement planning doesn’t stop with finances—it’s also about your lifestyle. What do you want your retirement to look like? Will you travel? Take up new hobbies? How will your healthcare and living arrangements fit into this picture? By working with your advisor to plan for these factors, you’ll enter retirement with confidence, knowing your plan supports your financial security and your personal aspirations.
A New Definition of Retirement
For many, retirement no longer means stopping work entirely. Today, more and more seniors are choosing to continue working past 65. 60% of Canadian retirees and pre-retirees say their ideal retirement includes some form of work. Rather than a single event or milestone, retirement is becoming a time when you can decide how to spend your later years on your own terms.
Maybe it’s time to retire the word “retirement” and replace it with something that better reflects this new phase—your “Freedom Phase.”
The Three Phases of Life After Retirement
Retirement isn’t just one long stretch; it comes in stages, each with its own challenges and financial needs:
- Active Stage: In this phase, you may still have the energy to travel, socialize, or even continue working. These activities can impact your time and income.
2. Leisure Stage: As you spend more time at home, you may want to modify your living space to make it more comfortable and accessible. Home renovations at this stage can be costly but necessary.
- Sedentary Stage: During this time, health concerns may arise. Around 75% of seniors will face significant health challenges, potentially requiring in-home assistance or specialized care facilities.
Financial Strategies for Your “Freedom Phase”.
Planning for your Freedom Phase years involves evaluating your future income needs while accounting for expected and unexpected expenses. With life expectancy reaching into the 90s, it’s crucial to have a withdrawal strategy ensuring your money lasts as long as you do.
The Importance of Lifestyle Planning
While saving for retirement is crucial, so is planning for the kind of life you want to live. Consider your hobbies, travel plans, healthcare needs, and living arrangements. Not considering these aspects can lead to unexpected expenses that could throw off your financial plan.
Redefining retirement isn’t just about financial security—it’s about finding fulfillment and purpose in your later years. By integrating financial and lifestyle planning, your advisor can help you create a comprehensive plan that empowers you to enjoy your “Freedom Phase “ years.
In doing so, you can enter retirement with peace of mind, knowing that you are fully prepared for the next chapter of your life—financially and personally.