Today’s retirees, and those of tomorrow, have had a sense of purpose their entire lives––and they don’t intend to give it up just because they’ll no longer be working full time.
According to the Four Pillars of the New Retirement study (2020, Edward Jones/Age Wave), 51 per cent of recent retirees said retirement is the time for "a new chapter in life," compared with just 25 per cent who said it was a time for "rest and relaxation."
The same study found that 97 per cent of retirees said it was important to keep learning and growing at every age. However, to find their purpose––contributing to the community, growing intellectually, gaining new experiences and so on––retirees will need to be financially prepared.
How can you prepare for a purposeful retirement? Start by asking yourself the next questions.
Will I need to prioritize some of my goals?
As a retiree, you may hope to do any number of things. You might want to take up a hobby, learn a new skill or volunteer in your local community. Like almost everyone else, you won’t have unlimited financial resources during your retirement years. And you may need to prioritize these goals, worthy as they may all be to your sense of purpose.
Can I still afford to retire at the age I planned?
When you first calculated your ideal retirement age, you might have been counting on your investment portfolio having returned a certain percentage. Or you might have had different goals in mind than you do now. Or you might have had a somewhat different family situation.
Changes in any or all of these factors could affect the age at which you choose to retire. But if you conclude that you may need to postpone retirement for a couple of years, your decision could offer some advantages. They include the ability to contribute more to your Registered Retirement Savings Plan (RRSP), Tax Free Savings Account (TFSA) or similar employer-sponsored plan. In any case, it’s a good idea to review your retirement plans periodically, perhaps at least once a year.
How can I incorporate philanthropy into my financial strategy?
Giving back to your community may be a key element of your purpose-driven retirement. Yet, with so many educational, civic and cultural groups in existence––including many in your own area––you probably can’t give as much as you’d like to all of them, without affecting your own lifestyle today and the legacy you’d like to leave for your family.
So, you may want to take two distinct steps. First, consider establishing a budget for how much you will give to charitable groups each year. And second, think about including philanthropy in your estate plans, because there are many vehicles and techniques available. You should consult with your legal, tax and financial professionals when drawing up your estate-planning strategies.
It can be extremely rewarding to live your retirement purposefully, but you’ll find it a lot easier to do when you make the right financial moves.
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