The Importance of Setting Realistic Goals for Retirement
While it’s productive to set goals for retirement, it’s still important for goals to be realistic. Despite their best efforts, many retirees set unrealistic or open-ended goals about their retirement plans.
The main culprit behind this? Common misconceptions about retirement. What’s more, many people aren’t fully prepared to retire because they didn’t save enough during their working years.
But if you create a realistic plan for your retirement, you can be better prepared for this big transition in your life. And you can enjoy retirement living in Ottawa to the fullest without the unexpected getting in the way.
You Should Retire by A Certain Age
In Canada, the common age for retirement is 65. This is when you start receiving Old Age Security benefits and your Canadian Pension Plan (CPP) contributions.
But you don’t have to retire at 65. You can opt to retire early (with reduced monthly CPP payments), or later (with increased monthly CPP payments).
If you enjoy your work, its sense of community, and its social opportunities, you don’t have to give up your job. When you decide to retire should depend on when you’re ready to retire, not your age.
The longer you work and postpone retirement, the more money you will have saved for retirement. But if you retire earlier, you will have to stretch out less savings over a longer retirement period.
Retirement Means Not Working
Sure, it would be nice to never have to work again. But for many retirees, working is a part of retirement life.
Many retirees decide to work out of financial necessity. But others choose to work for the social opportunities and gratification of employment.
Retirement is often thought of as a time to sit back, relax, and not lift a finger. But many retirees find work to be fulfilling, and are eager to fill their time in retirement with a new job.
You Won’t Be Stressed During Retirement
Most people expect retirement to be an easy, stress-free, extended vacation. But life is stressful at times, even in retirement. The transition to a new retirement lifestyle alone can be stressful.
You may not face the same daily workplace stresses. But you may experience other types of stresses in retirement, such as health and financial stresses.
You or a loved one may become ill, causing emotional and physical stress, and possibly financial strain if you need to pay for medical expenses.
Other big and unexpected expenses can come up in retirement that may also throw you off balance, such as house repairs and purchasing a new vehicle.
You may decide to sell your home one day to save more money for retirement. While it may provide financial relief, moving can be very stressful at the time.
As you’ve probably already learned in life, stressful events can happen at any time. So don’t expect retirement to be a breeze at all times. As in life, you will have your ups and downs in retirement.
You’ll Have the Time and Means To Travel More
Workers nearing retirement expect to do more travelling in retirement, especially to explore new places. But many don’t end up travelling as much as they plan to. The issue here is that, even with all that spare time and additional income, travelling costs add up quickly.
Travelling is often quite expensive. Many retirees choose to be frugal with their retirement savings instead of spending thousands of dollars on multiple trips every year.
Depending on your retirement lifestyle, you also may not have the time to travel. Maybe you’ve signed up for continuing education courses, or you’re volunteering or working several days a week.
Keeping yourself busy in retirement is good for your physical and mental health. If you don’t have the time or the means to travel more, don’t feel bad! You still can travel, but consider one big trip a year instead of multiple far-off destinations.
Setting Expectations on Personal Care and Health
Those nearing retirement age expect to stay healthy in retirement and even start living a healthier lifestyle. They might plan to exercise more and eat a healthier diet in their extra free time.
But people don’t often think about the potential health issues they might face during retirement. Or how their health could get in the way of their retirement plans. As we age, the likelihood of health concerns tends to increase, even with the healthiest lifestyle.
Unfortunately, health conditions come up and you may end up relying on health care assistance more than you planned. You should consider your health throughout retirement and plan for the unexpected.
There are retirement homes in Ottawa that do just that by catering to changing health needs in retirement.
Setting Expectations on Personal Finances
Depending on how much you’ve saved for retirement, you need to be realistic about your spending. Even with a pension, you’re still on a fixed income. You can supplement that with additional work in retirement, but that poses limits elsewhere in your life (such as travel, as discussed above).
If you plan to maintain the same standard of living in retirement as you did while working, then you need to save enough to do so. Otherwise, you may have to make cuts in your spending and stick to a tight budget.
It’s important to create a realistic retirement plan and update it as you go. Life is unpredictable so you may have to adjust your plan along the way. But at least you will know what to expect and can stay prepared throughout retirement.