Over the last couple of years, Canadians have been rethinking the target age of their retirement. Back in 2009, more Canadians preferred to retire at age 65 or earlier. That attitude has changed since the pandemic. In 2021, more Canadians are targeting a retirement age beyond 65.
Why the about-face?
In 2020, a global event occurred that initiated events that resulted in great uncertainty. Market volatility ensued, prices of goods and services sky-rocketed, and people began to rethink what was important to them.
A volatile stock market impacts people’s expectation for cashflow in retirement, thus striking fear in their ability to retire comfortably.
An increase in prices means that their money would no longer purchase as much as it once did.
And, major lifestyle changes prompt valuable introspection, which makes the decision to retire much more difficult.
There are things that can be done to help alleviate the above-mentioned fears:
- Trust in your investment plan and speak with your advisor about the fears that you may have.
- Reassess your budget and consider delaying big ticket purchases while inflation is high.
- Prepare for your change in lifestyle. Read books, make plans, and just try new things.
Delaying retirement can also result in many benefits:
- Increased government income
- Improved probability of success for retirement cash flow (i.e. less years relying on investments for income and more years to invest money to grow your portfolio)
- COVID-19 prompted the “Work From Home” phenomena. It gave people a taste and introduction to semi-retirement.
Although there are many benefits, delaying retirement doesn’t guarantee financial success. It requires guidance and the support of an objective financial professional. A survey conducted by the Canadian Institute of Financial Planners shows that pre-retirees and retirees with a plan are far more prepared for retirement financially, emotionally, socially, and physically, than those without one.
If you are a pre-retiree or retiree without a plan, then I urge you to reach out to our office to speak with one of our financial planners at The McClelland Financial Group. Short of that, I invite you to our website. You will find a recording of our virtual seminar on the same topic. Familiarize yourself to us through the recording and contact us after for a deeper discussion.