We often think of retirement as akin to reaching a destination – but in fact it’s a junction, that forks off into several different paths. The path – or paths – you follow is up to you, and tailoring your financial plan accordingly can help travelling it that much easier.
Although COVID-19 might have put a temporary hold on many travel plans, this retiree hasn’t delayed planning safe excursions closer to home. Some might have thrill-seeking outings in mind, while others would prefer to be more laidback, reading a book on a beach or secluded lake. From provincial parks to bike and wine tours, glamping (aka glamourous camping) or fishing, there’s no shortage of activities to help this retiree maintain a healthy and active lifestyle. Whether it’s smaller, spontaneous jaunts or embarking on a cross-country tour, this retiree’s lifestyle and finances need to be flexible.
Retirement path #1
Living the adventurer lifestyle typically requires a healthy nest egg, so a disciplined savings plan and a focus on long-term capital appreciation before retirement are important. While your tolerance for market risk may change in retirement, it’s also important to keep an eye on growth. With two decades or more of expenses to fund, running out of money could be a real concern. Achieving the right balance of stable cash flow, inflation protection and growth potential will be key for the adventurer.
This retiree finds it difficult to sit still, but not due to wanderlust. Instead, she may decide to pursue the childhood dream of working in a profession that is completely different from the career she had. Or, she may continue to work part-time or consult in the same field she retired from.
Retirement path #2
For this retiree’s finances, the priority might be managing her different cash-flow streams to optimize tax efficiency. She may continue to invest in registered plans until age 71 and then withdraw only the minimum amounts as mandated by government regulations. A greater focus may also be on continuing to seek out more growth orientated investment options to build a legacy for loved ones.
When a friend or family member needs help, this retiree comes to the rescue. He is the much needed support when there is a family emergency or a babysitter or home repairs are required. At times, he is the neighbourhood superhero volunteering at a local fundraiser.
Retirement path #3
As in life, the supporter’s financial plan would likely be focused on others as well. It may be dedicated to investing for a grandchild’s education through an RESP, gifting some of his wealth to his family or leaving a legacy for loved ones and/or charities. To balance these altruistic goals with his ongoing retirement needs, it means developing a plan that seeks out investment solutions which include downside protection along with potential for growth.
The path you follow in retirement – it may cross and overlap with the adventurer, the part-timer, the supporter or may veer off in an entirely new direction – it will be unique to you. Your financial plan should be as well, supporting the path you choose to take. Speak with a Scotiabank advisor to build a retirement plan that is as unique as you are.
Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.