Can You Afford To ‘Mentally’ Delay Your Retirement? The Answer May Surprise You….

One of the shifting population trends over the last decade are Canadian baby boomers joining the prestigious 50+ club, we have either retired or are about to retire. Throughout this article, we will ask you a couple questions, to stimulate the thinking process surrounding retirement.

Q. Can the Canadian Retirement Benefit System handle an increased level of CPP and OAS payments to millions of retirees?

If you were born in 1946; you are now 75 years old and hopefully retired for the last ten years.

Q. Has your retirement lifestyle matched your retirement expectations?  Yes___ No___

Q. Are you living with a certain degree of mental and financial stress? Yes___ N0___

What about mortality? YES, we are living longer; however, do we own financial instruments which will outlive us, or will we run out of money? Over five (5) million Canadians will turn sixty-five (65) this decade; will five (5) million Canadians simultaneously downsize their homes producing a real estate glut on the market or will advanced financial planning plans prevail?

Economics 101; A Real Estate supply glut will create a downward pressure on both; demand and pricing.

Q. Do we want real estate prices dropping 20% - 30%; Of Course Not!

Statistics indicate only 5% of all Canadians retire in utmost comfort, while only 5% of all Canadians possess a written and structured financial plan. How can you manage what you cannot see? Financial Planning is a lifelong journey, do not leave it to memory or chance.

Q. Is there a correlation between these stats? You bet; not only are they correlated, but they are also directly aligned.

How many baby boomers are planning to retire in 2021, but their retirement target(s) have not yet been achieved?  Perhaps market instability or correction affected their portfolio’s performance, so, if my retirement accounts need time to recover; what’s Plan B?

Plan B: Retirees can a) keep on working ?; they can find b) alternative funds to live on while their portfolio recovers, or they can c) convert their RRSP’s to RRIF’s at a reduced valuation; triggering losses, thereby, receiving less money than they had planned for.

One of our fundamental goals of my practice is to ensure our retirees do not carry mortgage payments or credit card debt into their retirement. One of our goals is to prepare for a debt-free lifestyle, as retirement should be fun and enjoyable; not stressful.

We do not encourage retirees to secure a line of credit or a mortgage to provide them with money to live on! We also do not promote selling the family home for a retirement home, as we encourage in-home care for our retirees; Why? Read on…

Fact: According to a recent CISION poll, over 90% of Canadian Retirees want to continue living in their family home, it is that simple. Remember, the family home is the environment where they raised their kids; hosted birthday parties; created life-long memories; hence why ‘living in place’ is so sentimental.

At the Money Café, we have created a niche financial instrument to counteract any unfavorable financial situations our retirees may face; it is called ‘Retire-Rite Lifestyle Solution?’.

It was designed to provide much needed tax-free income for retirees who need to wait a year or two while their portfolio recovers or for retirees who fear being clawed back due to earning above the claw back threshold of $79,054. If you earn more than $79,054 annually, be prepared to be clawed back or reduced; so, do not go over!

Retire-Rite? benefits do not stop here; we have a myriad of benefits which most retiree’s desire; over and beyond expectations.

Fact: Most Canadian retirees are not aware if they delayed CPP and OAS until age 70; their payments will be 42% and 30% higher respectively; for life; but, with no CPP and OAS how would they survive? Hopefully, their investments did well, maybe they owned multiple homes and can start selling them off; however, what if the real estate market was down or at a standstill and properties were not moving? What’s Plan C?

Canadian retirees need an alternative strategy, a strategy which they can check off all the boxes, just like Retire-Rite? does…

Let us face it, like millions of Canadians born between 1946 and 1965, I too am a baby boomer, and I too will be of retirement age in a decade and the very same advice and principles I write about are the very same principles and strategies I will implement for myself. One of my golden rules at my practice is to never sell an appreciating asset unless you are the last person standing. Why?

Well, the minute you sell or liquidate an appreciable asset you forsake all future growth! What if 2-3 years later the market spiked, and your investments rose 30% - 40%; you would have lost out, as you no longer owned that asset; including real estate.

Plan C: Our Retire-Rite? strategy, we will provide you with much needed cash-flow, we can also help you avoid making any rash decisions, including selling your family home or assets prematurely, creating a ‘fire-sale’. We do not like fire sales.

Did you know if you left your RSP’s to grow for another 5 years; you could receive 25%* more income?

As we alluded to earlier, if we all retired simultaneously, we would place a huge burden on government benefits! With proper planning we can stagger or spread out our retirement process over 5 or 6 years making it much easier on the system.

As we wrap up, let us refer to this articles headline; ‘Can You Afford to ‘Mentally’ Delay Your Retirement’ I said the answer may surprise you; the real question is ‘Can You Afford the Anxiety or Stress if you Delayed Your Retirement? Only you have the answer.

Our recommendation; ‘Do Not Delay Your Retirement’; you have spent a lifetime working, providing for your family, do not work a day more than you must, you truly deserve a break; allow Retire-Rite to help you realize your retirement planning goals.

Article created by Riyad K Mohammed; CEO; The Money Café and Retire-Rite Lifestyle Solution?. Visit us at: www.themoneycafe.ca or www.retire-rite.ca and share/like us at: www.facebook.com/retireritelifestylesolutions (*based on a 5% hypothetical annual return)