The retirement you choose will be unique to you, and that’s as it should be. But in a general way, all retirements travel through three phases.
Figuring it out
Becoming retired is a change and while you might have dreamt about it, you really won’t know what it will be like until you experience it. Much of who we are comes from work — our sense of accomplishment, our status and even our social connections. But the shift to retirement may mean figuring out who we truly are and learning how to be content through many retirement years.
Before you retire, try on different potential retirement lifestyles and chat with other retired friends about their retirement journey that may lead to discovering something new that you had not considered.
Financially, you’re likely to spend more during your early retirement years as you try out new things.
So budget for these additional expenses but also remember that some fulfilling things (such as volunteering) are not expensive and provide a strong sense of self worth.
Settling in
At this point, you’ll know exactly what you want out of retirement, and to be sure you’ll enjoy it, always take care of your health.
Financial planning becomes easier because most of your expenses are stable and predictable – but ensure you plan for the unexpected like a sudden health issue or major repair bill and periodically review your spending plan to ensure you’ve captured all your costs, including the effects of inflation.
Winding down
In this phase, folks usually slow down due to declining health or finances.
You’ll find yourself thinking more and more about the financial and other legacies you’ll leave.
Do what you can to maintain and improve your health, but be aware that health care costs can be significant. Although Canada’s health care program is very good, you’ll likely want to enhance your control over your own health.
So be sure to understand your health care options and choices, especially what would happen if you become chronically or acutely ill.
These three phases of retirement aren’t necessarily linear. For example, if a significant health event led to retirement, you may live for a time like you’re in phase three but with recovery, move back to phase one.
And keep in mind that your spouse may not always be in the same phase as you.
To be sure you live your retirement dreams through all the years – and phases – of your retirement, discuss your retirement plans with your professional advisor.
Andy Erickson is the division director with Investors Group, Vernon. This article is provided for information purposes only. Please consult with a professional advisor before implementing a strategy.
