I recently read an article in the Globe and Mail, by Josh O’Kane. The headline was “Many boomers won’t change lifestyle despite worries about retirement savings: poll”. And, underneath that: “New survey shows nearly half of Canadians over 55 say they aren’t saving enough to retire, but only a third are willing to change how they live now.
In my professional life I have seen that scenario far too often. It is not a myth. It is a fact. And almost always, the individuals in that predicament do see the light. But sometimes it’s too late or so close that it becomes precarious. That said, I would just like to share with you the results of the poll referred to.
The poll was done by the Royal Bank of Canada, and entitled “Financial Independence in Retirement.” One thing that the poll looked at was longer life expectancies. This is a contingency that we have built into the financial planning process at our firm. We have always been conservative in these assessments and have used a life expectancy of 90 for a long time. We have recently extended it to 95. Is that excessive? Some might say so, but we use it as a “stress test” in our planning. If we are going to be facing surprises down the road, we want to be confident that they will be positive ones.
With respect to the survey, among the top concerns expressed by “boomers” was their ability to maintain their current standard of living and to cover the costs of health care. Basically, the main concern that they had was whether they would have enough money to fund their retirement. That is not an easy question to answer and we deal with it every day. I think that the biggest problem that we encounter is clients understating their expenses.
Another concern that respondents to the survey had was how to best deploy their savings. The answer to that is definitely a one off one. Everyone is unique. It’s like a fingerprint or a snowflake. It depends on so many things, but the most important is weighing risk tolerance with the risk you need to take to make your plan work.
Living for today is great. But living in the future, with the same standard, may be even more important. Is balancing those two things a juggling act at times? For sure it is. Lots of governments have lived for today and ignored the future. Each of us has the choice not to do that.
President, HG Partners Limited
Director, Private Client Group &
Senior Financial Advisor,
HollisWealth Advisory Services Inc.
This article was prepared solely by Howard Goodman who is a registered representative of HollisWealth Advisory Services Inc. (a member of the Mutual Fund Dealers Association of Canada and the MFDA Investor Protection Corporation). The views and opinions, including any recommendations, expressed in this article are those of Howard Goodman alone and they are not those of HollisWealth Advisory Services Inc.
HollisWealth is a trade name of HollisWealth Advisory Services Inc. ® Registered trademark of The Bank of Nova Scotia, used under license.
HG Partners Limited is an independent company. Scotiabank companies have no liability for activities outside of HollisWealth.