What It Takes To Retire Rich
We all have visions of what it takes to retire rich – finally savouring a taste of the good life, with first-class travels, fast cars and martinis by the pool. But, as Peter Wilson discovers, come age 65, many of us are in for a shock.
What does your roadmap to retirement look like?
If I had retired rich when I left the Vancouver Sun a few months ago, you wouldn’t be reading this, because I would never need to work again. But, given a chance, and if I keep on supplementing my income with freelance-writing work for the next five years, I could get there yet.
Even now my wife and I are okay by the standards of most British Columbians. For one thing, I have a pension, and that has become a rarity for anyone who worked in the private sector. We have RSPs and other investments and an extended health plan. Our house has long been paid for, and it has a new roof and a just-installed high-efficiency gas furnace. We’ve loaded up on the latest in electronic gadgets and gizmos and replaced all our appliances. As well, we can afford to buy another Honda CR-V in a couple of years.
And, according to my financial adviser, if my wife and I keep spending at our present careful – some might say penny-pinching – rate, we’ll never run out of money. But, oh, it could have been so much better.
You’ll note I said a Honda CR-V – not a Porsche or even a Lexus. And when we take vacations, it won’t be first class to Australia and back twice a year, along with a cruise off the Amalfi Coast. Plus, we’re going to be doing our own gardening and housecleaning, much as we hate it.
The retirement myth
The dream for all boomers, of course, is to retire rich. For decades, golden-hued TV ads have shown couples – wife still youthful with a couple of vague wrinkles around her eyes, husband slim and jut-jawed – drifting off into a future of perpetual world travel, golf, photogenic grandchildren and, apparently, fly fishing in northern lakes accessible only by float plane.
This myth quickly dispels when it collides with a few hard facts offered by Vancouver-based financial planners and advisers who know it takes more than
wishing and dreaming – and the strange boomer belief that the good life will continue forever and ever – to make it so.
According to Lynne Triffon of TE Financial Consultants Ltd., boomers in particular often have an unrealistic sense of entitlement when it comes to how they’ll be able to live in their retirement.
“There has been a real shift in what our expectations are,” says Triffon. “In fact, many people now think they should have a better lifestyle than they had during their working career.”
Ah, if it were only that easy. But a clear, cold look at the figures shows that if you want to retire rich or even close to it, you’d better get moving on it now, because it’s going to require that you have a sizeable chunk of change in your jeans.
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