Are you ready for retirement?
It’s not a new question. In fact, every time you turn on your television, it seems there’s a handful of commercials devoted to the inevitability of life after work.
It is also something that, depending on your demographic, you may not think too much about. You may also not want to think about it.
But a recent report from the Canadian Payroll Association surveying about 4,700 Canadians has put a spotlight on why we should be thinking about the end of our work life, and how unprepared we might be, especially here in Atlantic Canada.
Here are the highlights (or lowlights) of the reality facing Atlantic Canadians – 55 per cent living paycheque to paycheque, 56 per cent saving five per cent or less of their net pay (it is recommended that we set aside 10 per cent) and 21 per cent have saved nothing for retirement.
All of these responses rank Atlantic Canadians the highest in the country.
Not a pretty picture.
So how did we get here? And, is there hope?
I reached out to Charlottetown’s Blair Corkum (of Blair Corkum Financial Planning Inc.) to help us with some advice.
He wasn’t surprised to hear that more than half of Atlantic Canadians are living paycheque to paycheque. In fact, he suggested the number might actually be higher.
Why? Quite simply, there are more “play things” to spend money on than before, including technology (smart phones, wireless internet and full cable service) and for parents, children enrolled in numerous activities (the ballet, perhaps?).
A must, says Corkum, is the five to 10 per cent of your net paycheque set aside into a savings account. More than that, have the money transferred automatically so you “never miss it.”
For people 55 and over who can’t retire when they want to (the report says 41 per cent of Atlantic Canadians fall into this category – almost double the national average), Corkum sees three reasons for this.
The first is too much house. Simply put, if the kids have moved out and you’re getting close to retirement, it may be time to part ways with the large five bedroom house and downsize.
Next is too much car. Buying a new vehicle every so often is a waste of money, Corkum explained. Interestingly, the report mentions debt as a result of car loans. And, not surprising, the 23 per cent of Atlantic Canadians in this category tops the country as well. Corkum’s advice? Buy vehicles a few years older for less money since they’ll all have to be replaced at some point anyway.
The last is stop trying to keep up with the Joneses. Stated differently, stop trying to keep up with friends who make significantly more money, especially when they travel and experience places that may be out of your price range.
The bottom line for the three is as follows – learning how to say no.
There’s a lot more that can be said, so here’s my advice – go see a financial planner and make a plan.
Even so, saving money is getting more difficult, even without the “play things.” In terms of P.E.I., another rental increase has been approved for Jan. 1. And, as winter quickly approaches, heating oil has also gone up.
So, start finding the money to set aside. Retirement is coming quicker than you might think. And, you’d rather spend it on a beach than having to work past retirement in order to make ends meet.
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Are you ready for retirement?