A rewarding retirement...may the dream become a reality!

All those enticing ads depicting happy retirees in perfect health, wearing Bermuda shorts and designer polo-shirts on a white-sand beach, a sunny golf course or in a fully equipped RV certainly get us dreaming! Wouldn't we all like to retire this way?

Whether your retirement seems far off or is fast approaching, there's a strategy just for you that will help you plan for it! Because, let's not delude ourselves... those wonderful ads are realistic only so far as we've taken the proper measures to achieve our goals!

An ideal world

In an ideal world, you would start planning for your retirement upon entering the workforce. In other words, envision your exit right from your entry. This way, your contributions will be much less of a financial burden, as the payments will be spread out over your entire working life. Those who delay financial preparations for their retirement will have to manage much larger bites out of their budgets!

The key question to ask yourself is not, "will I have enough money to live when I retire?" but rather, "will I have enough money to maintain my lifestyle when I retire?" Two very different questions, given the fact that expectations for the "golden age" of retirement are generally very high. And the belief people have that they will spend less when they retire is false. Expenses just switch places, money goes to different uses, but spending levels essentially remain the same. Let's face it, don't we tend to spend more on the weekends than during the week? Free time costs money! Of course, the decision to get rid of a car can certainly make a difference, but the budget items that have the biggest impact on the bottom line are fixed.

Are your financially equipped?

While some people have a nest egg large enough to enjoy a comfortable retirement, the vast majority of people I meet (those who work in the public service) depend on their pension for their retirement. For those who have accumulated 35 years of service or more, this pension plan, coupled with the Quebec Pension Plan, will likely be sufficient to meet their needs. However, it is essential for those who do not have the maximum number of service years to complement their plan with another investment vehicle, such as an RRSP, TFSA, guaranteed investments or other wealth-building products.

But for goodness sake, do not make the mistake of confusing budgetary issues with financial ones! Because, financially speaking, from the moment you reach the maximum number of service years that entitle you to your full pension (now 38 years) any additional years worked are only to the employer's advantage... while you deprive yourself of blissful years of retirement you've worked so hard to earn!