Few of us aim to starve in our 30s only to splurge in our golden years, or vice versa. How much to save and spend is the eternal question successive generations of retirees ask. And it’s an important question – very, very important. But retirement planning is about more than just money. This month’s pick of the web offers advice on how your clients can sustain their finances, as well as survive and thrive in their golden years.
Nix the feast-and-famine cycle. A sophisticated free calculator from The School of Public Policy at the University of Calgary aims to create a lifetime budget for saving and discretionary spending. Clients can punch in their numbers and get a year-by-year spending/saving plan that adjusts for high-expense years (when the kids go off to university, for example) and boosts savings targets during low-expense years (such as when the house is paid off). The goal: to smooth consumption over time, creating a level living standard through the earning years and into retirement.
Build a gold-plated pension plan . . . without a pension. Having a steady “paycheque” removes a fair bit of financial angst for retirees. Rob Carrick of the Globe and Mail makes the case that annuities can provide the certainty some retirees need, reducing the risk they’ll outlive their personal savings or make emotional investment decisions that aren’t in their best interest. For those who aren’t committed to annuities, this Kiplinger article by Eleanor Laise advises using a dynamic draw-down strategy to stretch a nest egg’s longevity and allow retirees to live out their dreams.
Make strategic decisions about when to cash in RRSPs. CFP Jason Heath’s article in the National Post explores when retirees should begin to draw down on their retirement savings. He makes the case that defer, defer, defer isn’t always the best option, particularly for those who retire early.
Learn from those who’ve gone before. Four years after the oldest baby boomers hit age 65, Ameriprise Financial surveyed them on their secrets for a successful retirement. This U.S. News article by Maryalene LaPonsie summarizes the results. Those retirees focused solely on their finances might pick up some valuable pointers – it seems finding a new routine in retirement is as important as what you have in the bank. For retirees seeking ways to keep busy on a budget, check out these tips from long-time financial writer and recent retiree Jonathan Chevreau.
Housing trend offers retirees support on their own terms. Featured in the Guardian, “co-housing” for seniors has gained traction in Europe, most recently in the U.K. Members share a custom-built housing development with self-contained units and shared communal facilities. But unlike standard retirement homes, they’re designed and managed by the community and residents choose each other. Food for thought? We think so.