Let’s talk retirement strategies. There are generally three stages to retirement; they are the “Go-Go” the “Slow-Go” and the “No-Go”.
Listen today as Senior Financial Advisors Rob McClelland and Mike Connon discuss a new phase they are considering and why you might want to also.
Transcription
Rob (00:00):
Hello, this is Rob and Mike from The McClelland Financial Group of Assante Capital Management. And this is Think Smart with TMFG. Today on Think Smart with TMFG, Mike and I are going to be discussing strategies to enjoy your retirement.
Rob (00:20):
Mike, I’ve recently been away as you know, I was away in Ireland and over the course of a couple of weeks, we had three clients that passed away and it was all the men. All of them were men and all of them were at different stages in their retirement but the one thing they all had in common is that they were all in early stages of their retirement.
Mike (00:46):
Yeah, you never know how long retirement’s going to be. It’s one of those things where you can trigger the date when you retire, but you can’t trigger the second half of it so it’s a bit of a tricky number to figure out.
Rob (00:58):
Well, some people can’t even trigger the initial date of when they’re going to retire, but a lot of people have choice in that. And we’ve always talked about the three phases of retirement and they’re typically like this, you’ve got, what’s called the Go-Go stage and that is typically someone in their 60 to 70, maybe to 75 years of age and then the next stage would be the Slow-Go stage. And that’s in that 70 to 80 time period, where you’re you still maybe going and doing things but you’ve slowed it down a bit or you’ve slowed down how far you’re going, how often you’re going for, and just how many activities you’re doing when you’re gone. And then finally the No-Go stage.
Rob (01:45):
I want to rechange that because I always struggle with those who have retired and they’re in the Go-Go stage and suddenly they pass away and I’m going to rephrase it and I’m going to call it the Must-Go stage. If you have any objectives of traveling around the world, you have to go early in your retirement. You have to get out there and do it whether COVID’s going on or whatever’s going on or the market’s down, you got to take those trips.
Mike (02:23):
Yeah, remember when we were in a room with a bunch of our Client Advisory Board, and we were talking about the fears about retirement and the biggest fear everyone had was that last paycheck. The fear of the last paycheck was huge and it’s important, but what’s worse, the fear of the last paycheck or the fear of not being able to enjoy any of your retirement? You got to weigh those two so when you’re worried about I’m going to have my last paycheck, you should all worry about what if I don’t get to enjoy that last paycheck too. So you got to take both those in consideration.
Rob (02:53):
To me, what’s difficult is the client and the spouse, and it’s often the women are left dealing with the repercussions of what’s happened. They’ve lost their lifelong partner and along with that, a lot of the dreams that they had going forward, and they have to almost restart their life, but with a different vision and it’s tough and you see it and often hidden in what’s happened, there’s some experiences and I think you and I should talk about some of those.
Mike (03:32):
Yep.
Rob (03:33):
So I had a client recently pass away and I will say they were retired and have been retired for a period of time, but they weren’t able to do some of the things that they wanted to do because they held onto that family home and it prevented them from having a travel budget. And by the time they were able to create that travel budget by downsizing, he passed away.
Mike (04:01):
Yeah.
Rob (04:01):
So the travel never happened. And the money’s there now, there’s more than enough money to support their survivor, but that travel will never happen. It will happen but maybe just with her going on trips, maybe with friends or family.
Mike (04:18):
Yeah. It’s an unfortunate situation because people put their whole lives together for these times. You work hard for all these years. You save all your money, you do everything the right way, and you’ve done everything, right and then all of a sudden this comes along and you don’t get to enjoy all the fruits of your labor.
Rob (04:39):
And it’s not always about travel. There’s other things certainly involved, but travel seems to be that one that’s more time sensitive than anything else.
Mike (04:48):
I remember you had a client that he worked for so long, he was a great businessman. I always loved him when he came in, but again, he kept on running that business so long that became his priority and never really got a chance to go and enjoy all the fruits of his business.
Rob (05:06):
They ended up having a couple of side trips, a couple of short one week or two week trips during the course of a year, but never what they had envisioned, which was maybe to be away for two or three months and it was important that, yeah, it was important to him that that additional revenue kept coming in but you could see that the family and the spouse weren’t happy with him continuing to work as long as he did and devoting too much time to it, whereas if he could have been able to kept working and freed up some of that time, then you could have had the best of both worlds and I think that’s the tricky thing for people to figure out. What’s the best of both worlds?
Mike (05:48):
What are some other situations you’ve seen?
Rob (05:50):
One that has become certainly more common because of COVID, and it existed before COVID and I worry about it myself, with my own, with my wife and myself. We have plans to travel and do lots of things, but we have no grandchildren yet and I know my wife, she’ll have trouble being away from the grandkids for more than 10 days and we don’t even have grandkids yet and I’m already worried about it. So that tells you of it or something. But we’ve had numerous clients that become the, whether they’re looking after their grandchildren and they’re on the schedule, they’re looking after their grandchildren three days a week, three full days a week. So you’re going nowhere when you’re doing that.
Mike (06:40):
Yeah.
Rob (06:40):
You’re really restricted.
Mike (06:42):
It’s the hostage grandparent situation.
Rob (06:44):
Absolutely. Or you’re looking after your elderly parents.
Mike (06:47):
Yeah.
Rob (06:48):
You can’t leave the country because your mom and dad, or your mom or your dad are still alive and you’ve become the primary caregiver.
Mike (06:55):
We’re now actually seeing sandwich generation retirees. We’ve always heard about the sandwich generation, that’s when you have to take care of both your kids and your parents, but kids have not become as self-sufficient as quickly as they used to and you still have kids that are 30 years old, they’re still requiring their parent’s help and then their parents are still alive because they’ve retired and their parents had them in those generations you had kids when you’re 20 years old, their parents are elderly need help from them too so we have retirees, which all of a sudden have this beautiful time on their hand that they can go and enjoy but the sandwich between two generations they have to take care of.
Rob (07:28):
It’s a tricky situation. So I had a client who said, “I will look after my grandkids, but I’m not on the schedule.” And I thought that was an interesting statement. That really struck with me as something. Don’t be put on your kids’ schedule, unless that’s what you really want. If that’s what you and your spouse really want, then do it.
Mike (07:51):
Yep. Some people love it.
Rob (07:52):
Some people love it.
Mike (07:53):
Yeah.
Rob (07:53):
And that’s important to them. For me. I think I’m still going to have a lot of time to do that, but I want to get some of those big trips, certainly out of the way. You’ve also had some clients that have had different experiences. Discuss some of those.
Mike (08:09):
I’ve had a few clients where they were trying to get their life organized and they were trying to downsize and they were trying to get everything in order to make sure they could enjoy their retirement and in the middle of it, one spouse passed away. And the tricky thing is we always think the weaker spouse will pass away first. That’s not always the case and a lot of times the stronger and more, the person who’s running the whole ship will pass away and it leaves the ship rudderless and it becomes a big problem.
Mike (08:40):
And I find that’s one of the things we take for granted and even remember when my mother and father were still alive. I always assumed my dad would die first. I mean, he drank like a fish and smoked so naturally you think he would die first and my mother used to take care of all the finances and do all the cooking and run the household and do all that, all of a sudden my mother died and we didn’t know what to do because we never planned on my father being around after my mother, that was absurd, but it happened and then we had to go and start to do, take care of my dad for the next five years.
Rob (09:12):
It’s interesting. Mine was the complete opposite. My father was always the stronger one and my mother was the weaker one, but my mother lived 10 years longer than my father.
Mike (09:24):
Yeah.
Rob (09:24):
And we always thought that it would be my mother that would go first but it was the complete opposite.
Mike (09:30):
There may be some stress attached to me being the stronger one in a relationship.
Rob (09:34):
Well there is. Often there is, right?
Mike (09:36):
Yeah.
Rob (09:36):
What about the estate plan? Is that important?
Mike (09:40):
The estate plan’s important. I even had one client that we had to deal with their parents’ estate issue when they found out they got sick and it was the first time we had to open up the whole parent’s estate plan, because a lot of people always assume that the parents are going to die before the kids. It doesn’t always happen that way. And when you have clients that are retirees and all of a sudden they still have their parents around, they got to go, it’s a bit difficult because sometimes older people don’t like to be open with their finances, but they need to go in there and make sure everything is set up the right way and we’ve had issues with that in the past.
Rob (10:12):
Definitely. It’s interesting, we came across a situation recently where a client is already, even though one of the parents is still alive, is already starting to receive part of the estate and there’s some value in doing that. If the estate’s large enough and there’s more than enough money to look after the surviving parent, why not do a little bit of a estate distribution so that the family gets to enjoy some of that? As long as, you know, you got to be careful with that, but as long as you crunch the numbers properly and have some professional help in that regard, you can make some good long term decisions in that area.
Mike (10:53):
Yeah. You always give cautiously, but if it makes sense to do, you should absolutely consider it.
Rob (10:58):
The one thing that is interesting, travel as it stands today is a nightmare. I have to be honest.
Mike (11:11):
Yeah.
Rob (11:11):
You know, first of all, we had COVID, now we have problems with the airlines. We have problems at the airports. Pearson, our own airport has been called the worst airport in the world right now. Your flight is often delayed for hours or sometimes days. I came back from someone, from Ireland, he had three flights cancel, he had a second flight that he had to take. It’s been canceled three times now and so it’s a nightmare, so I think what you need to do is lower your expectations. I’m not saying don’t travel, but don’t expect that you are going to go to the airport an hour and a half before your flight, get on a flight, get on a plane and arrive on time and everything will be good. Expect you’re going to have to get up at four in the morning, be at the airport by five and you’ll reach your destination before midnight and if you go in with that expectation, then you’ll have a better day. If you go in expecting that you might reach your destination in two hours, it’s not going to happen.
Mike (12:17):
Yeah. Last time I took a trip down to Florida, it took me three days to get there.
Rob (12:21):
So coming back from Ireland, we got to the airport at 5:00 AM because we wanted, we had heard about all the disruptions, in Dublin and the lines outside the airport. We breeze through, so we’re four hours early now for our flight and then they delay the plane another two hours, so now we’re six hours at the airport just waiting to arrive and of course, when you arrive in Pearson, they don’t let you off the plane because they’re so backed up there that you’re on the plane for another hour before they’ll let you off.
Mike (12:55):
So I guess what you’re saying is don’t delay your travel plans, but bring a good book with you.
Rob (12:59):
Bring a couple of good books and bring your patience is what I’m saying. So remember the terminology has changed a little bit. It’s not the Go-Go period. It is the Must-Go period. Get out there. Do some of the things you wanted to do. I’m sure your financial advisor’s going to give you the green light. That’s the end of our podcast today.
Rob (13:21):
This is Rob and Mike with Think Smart from The McClelland Financial Group of Assante Capital Management, reminding you to live the life that makes you happy.
Assante Capital Management (13:53):
You’ve been listening to The McClelland Financial Group of Assante Capital Management Limited. Assante Capital Management Limited is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Insurance products and services are provided through Assante Estate and Insurance Services Incorporated. This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources. However, no warranty can be made as to its accuracy or completeness. Before acting on any of the previous information, please make sure to see a professional advisor for individual financial advice based on your personal circumstances. The opinions expressed are those of the authors and not necessarily those of Assante Capital Management Limited.
