Retirement: Myths and realities
Whether your retirement is just around the corner or way down the road, you have probably begun to think about it –– and perhaps worry about it, too. That’s why you plan for retirement – to eliminate as many unknowns as possible and to chart the right retirement course for you. Every solid plan needs a solid foundation.
In this electronic age, there is a lot of information available to us; however, there is also a lot of misinformation. To give your plan the solid foundation it needs, let’s dispel some myths and look at some basic realities of retirement.
Myth: Financial health is most important
Reality: Having money definitely provides additional choices, but you can enjoy a fulfilling and meaningful retirement without having a lot of money – by volunteering, through part-time work, or other appropriate lifestyle choices that fit your income. The biggest issue is your health – poor physical or mental health removes choices, whether you have money or not. Your plan should include maintaining and improving your health and knowing how health issues will be handled before they happen.
Myth: The biggest risk to your retirement income is the stock market
Reality: Yes, poor investment returns early in retirement can have an impact, but avoiding the stock market by sheltering your investments in low-return vehicles such as Guaranteed Investment Certificates (GICs) may not be the answer. Unlike GICs, equity investments can provide the opportunity for the level of growth over the long term that can offset the effects of inflation. Your plan should include strategies for accessing market growth while still protecting your income from the impact of a short-term market turndown.
Myth: You’ll have plenty of spare time
Reality: Experienced retirees will tell you that they have little spare time. Life tends to expand to fill up time so your plan should ensure your time is spent on things that are meaningful to you.
Myth: People work in retirement because of financial need
Reality: Some people do work in retirement for financial reasons but many seek part-time, occasional or flexible work that provides social interaction, allows them to feel challenged, or provides a sense of accomplishment. Plan to talk to working retirees about why they work and how they fit their retirement around it.
To eliminate all the retirement myths from your retirement realities, talk to your professional advisor about the best retirement plan for you.
Date reviewed: September 30, 2015
This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.