Will I have enough?

One of the top concerns of retired people is wondering whether they will outlive their money. With medical advances increasing our life expectancies and the changing nature of markets, employment opportunities, and predictable benefits like defined benefit pensions and healthcare, it’s no wonder people are concerned. 

In days gone by you retired at 65, took your company pension, Canada Pension, what savings you had, and the extended health benefits that continued on, and you comfortably enjoyed the golden years. Today more and more people are self employed, the defined benefit pension has been replaced with the defined contribution pension, and health benefits often don’t exist when you are employed, let alone after you retire. 

The world is in the midst of dramatic shift. The age of technology is rapidly changing our habits, our downtime, and our working life. All this change, while it may be bringing about a great new world, is creating a lot of uncertainty, fear, and anxiety in people as they look to their futures. 

There are hundreds, if not thousands, of strategies and solutions out there designed to improve people’s financial lives, each with the implicit promise of being the one solution to all your problems. 

Truth is, there are really only three things you can do that will affect your financial life: Make more money, spend less money, or change your expectations.

Make more money
For those still working, the potential to increase income is a real one. They can manage their employment careers, work more, or create additional sources of income. For some, that may be a small business, for others a real estate investment property. For others still it’s the long term performance of investment portfolios.

Spend less money
Spending less money is the more painful choice for many. It involves budgeting, understanding where the money goes, then making hard decisions on what expenses will stay and which have to go. It’s unpleasant and involves discipline. 

For some, though, there is an element of humility. Too often our self-worth is tangled up in our lifestyle and our possessions. Wants and needs become blurred, the definition of necessity has become increasingly vague. Food, shelter, love and safety used to be the needs, everything else was optional. Today, everything is a need, the lines are blurry at best and for many non-existent.

Changing expectations
Managing expectations is more complicated, and requires us to question the things we think we need versus the things we actually need. For some it can be difficult, after a lifetime of comfort and convenience. 

Revaluating things in your life is always hard, but when it is forced by a lack of financial resources, it makes the task that much more challenging. 

Minimalism and back to basics movements are growing, though, and people are questioning their lives and the material desires that drive them. The generations following the baby boomers are in the process of reinventing the world their parents created. The world whose movie antihero, a man named Gordon Gekko, famously extolled, “Greed is good”.

Creating a successful retirement will always be more than just about the money. Often solutions to our financial challenges are the ones that make us happier people in the long run. Working hard and building successes, cutting out the things that neither make us happy nor fulfilled, and keeping a grounded perspective: These are some of the building blocks of a good life. They also happen to be the keys to a balanced financial life.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

Jeff Stathopulos, CIM, CFP, Portfolio Manager

Jeff is an advisor and partner with The Navigation Team at Scotia Wealth Management.

He lives in Kelowna with his wife Tanya, their two university bound daughters and their canine kids.

You can contact Jeff by email at [email protected]

Website:  www.yourlifeyourplan.ca

The Navigation Team

Scotia Wealth Management

This column is for information purposes only. It is recommended that individuals consult with their financial advisor before acting on any information contained in this article. The opinions stated are those of the author and not necessarily those of Scotia Capital Inc. or The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member Canadian Investor Protection Fund.

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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