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Flexibility Should be Built into Your Retirement Planning

Flexibility Should be Built into Your Retirement Planning

March 22, 2020

Retirement is not always the way you imagine.

Ipsos conducted a poll on behalf of RBC. The 1,800 Canadians surveyed were 55 years and older and had retirement assets of at least $100,000.

Over half of people surveyed anticipated knowing their retirement date one year in advance. The reality was just under 40 per cent had that much notice. No advance warning of retirement was given by 16 per cent of the respondents.

That has significant financial implications for retirement. Continuing to earn an income to build your retirement nest egg is how people plan for retirement.

Knowing when that income will stop can be critical to your planning.

Apparently, the dream of spending our cold winters in the sunny south is just a dream. Approximately one third plan to migrate south but only about half do.

This could be as a result of preferring to continue living the retirement life in Canada. For some it might have to do with the added cost of travel.

The largest misconception about retirement has to do with anticipating some work in your golden years.

Half the people said they planned to have at least some ongoing employment after they retired. Only 11 per cent of those polled were successful at finding work.

Not knowing the future and accounting for that uncertainty is a useful principal for personal retirement planning. You do not know how life will unfold. Plan for several different outcomes.

Cash flow projections is the best planning tool. Anticipate what might happen during retirement, then budget how those future events will be financed.

Then change your assumptions including a retirement date, amount you anticipate spending and the investment return that you expect from your investment portfolio.

We recommend your own personal retirement planning account for several different scenarios.

Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through