But cancelling your retirement is not your only option – and, in fact, that may not be the best option for you. Why not phase into retirement instead? Phased retirement is beneficial because it lets you ease into retirement while maintaining a higher income than you might otherwise receive in retirement. You could choose to stay with your current employer in a more flexible role (if your current employer’s retirement policies allow that), move to a new employer who will allow you to pursue phased retirement, or even start your own business in a field you enjoy.
People are living longer, healthier lives these days so you can reasonably expect to enjoy many active ‘mature’ years. Phased retirement can be a great way to maintain and enhance social connections, get more satisfaction out of life, and ensure you will not outlive your retirement income.
And speaking of your retirement income – while you’re rethinking the type of retirement you want, it’s a good idea to also reconsider your income requirements. Your retirement income will come from many sources – your scaled-back employment income (should you choose to phase into retirement) your investments and personal savings, government benefits, and employer-sponsored pension programs.
These are the keys to assuring sufficient retirement funds:
- Know your expenses and manage them.
- Use effective tax reduction strategies.
- Maintain a balanced, diversified selection of investments. The shrinking real estate market has proven that it’s a flawed strategy to rely solely on home equity to fund a retirement. A more prudent investment strategy is to maintain a portfolio distributed among the three classes of investments: Cash or cash equivalents (government savings bonds, T-bills and money market funds); fixed income securities (GICs and fixed-income mutual funds); and equity investments (Canadian and international stocks and equity mutual funds).
You should be able to make your retirement decisions based on your retirement lifestyle goals and not because you’ve run out of options. Your professional advisor can help you have a plan for retirement that keeps on working for you.