Having sat down and discussed retirement plans with hundreds of Canadians over my 11 year career, I can say with certainty that this one truth is truly over looked my many.
As someone who has been investing most of their life, I too struggle with this aspect and I know that I am no different than others. There's a false narrative that “Once my accounts hit X number of dollars, then I will be comfortable and happy”. The fact is, this simply doesn’t happen – regardless of what your level of wealth is. I have personally witnessed investors with multiple 7 figure portfolios constantly worry that their pile of money will run out and on the flip side, witnessed investors with modest means quite enjoy their retirement with far less worry. The truth is, once you have some base level of financial security, your day to day happiness in retirement will be impacted more by your relationships, your hobbies, and your sense of purpose than your financial assets. I was 25 when I first got the chance to travel to Europe – what a trip it was! (I blame this trip for the travel addiction I have now.) It was on this trip across the pond that I noticed many differences in how we live versus how Europeans lived, in myriad ways. One thing that struck me was the sense of community, especially amongst those in their retired years. I didn’t ask what their net worth was, but I do believe they were of modest means, we are likely not talking about 7 figure investment accounts here. They lived humbly, and they almost had a care free spirit that was so admirable. They remained youthful, out and about in the town and “Old Age Homes” really are not discussed like they are in North America. I contrast to what I see in Canada, and it couldn’t be more opposite. We continue to push, grind, save every last dollar in an effort to retire. I think there is something we can learn from the European culture – stopping to smell the roses along the way can inevitably increase your happiness. Now, I am not saying we stop saving for our future. But what I am saying is, I see far too many Canadians save diligently every year, decade after decade with virtually no plans on how to spend it in retirement. We should really consider that one can (or should?!) only delay gratification for so long. What no one wants to talk about is this: we need to be more strategic when we design our Bucket List, and more willing to plan to spend our wealth accordingly to actually check off these life-fulfilling boxes. Maybe the retirement truth nobody wants to talk about is that it shouldn't just be about retirement. Any memorable life experience, (insert your bucket list here) is far different at age 50 then age 70 – we all know this to be true. My experience as a Certified Financial Planner has taught me that we are pushing off these experiences far too late in life, and making false assumptions that our health will still be intact. But what if it isn't? Why aren't we designing our Bucket List around life stages and checking those boxes when we are able-bodied, rather than waiting for the unknown future when we finally 'deserve' these experiences but can't actually enjoy them? Do we think that at age 65 when we retire, we are going to all of a sudden learn to spend our wealth? The evidence shows retirees are spending LESS as they grow older and actually saving money in retirement. What if we spent say, 10% more in our 40’s and 15% more in our 50s instead of stocking it away for our 70s and 80s? What if we instead of waiting until we retire, we use our wealth to create these experiences instead of some day in the distant future. I love the quote from Eric Jorgenson “When you’re young, you have time. You have health, but you have no money. When you’re middle-aged, you have money and you have health, but you have no time. When you’re old, you have money and you have time, but you have no health. So the trifecta is trying to get all three at once." By the time people realize they have enough money, they’ve lost their time and their health. My entire retirement outlook changed when I read Bill Perkins book “Die with Zero”. It truly flipped everything I knew about personal finance on its head. I'm more sure than ever that there's a strategy to spending, and enjoying(!) our hard-earned savings to enrich life all the way through.
0 Comments
Leave a Reply. |
AuthorBrandon Yanchus is a CERTIFIED FINANCIAL PLANNER™ with over a decade of experience. This is his personal blog where he shares what he's learned helping families, professionals, business owners and retirees grow and protect their wealth. Archives
February 2024
Categories
All
|