For many Canadians, retirement can stretch 25 or 30 years – longer than many careers. Whether you’re still working, easing toward your last day or already there, planning for retirement as a single event could cause you to miss how much changes along the way. Planning for each of its seasons, on the other hand, can help you make the most of what each one uniquely offers.
Before you settle into any stage, make sure you have the foundations in place. If you have a workplace pension or employer savings plan, talk to an RBC advisor about the options best suited to you. After all, the choices you make during this transition can affect the seasons that follow.
This is also the moment to put your core estate documents – a will, powers of attorney (POAs) and up-to-date beneficiary designations – in place if you haven’t already. While you’ll revisit them later, having them done at this point ticks a big task off your list down the road.
Stage 1: Go, go, go!
When you first leave work behind, you’ll finally have time for the activities and pursuits you’ve been looking forward to. Much like early summer’s long days and high energy, this stage is full of possibility – travel, home projects, time with family… a bucket list that’s been waiting.
It can also be the most expensive phase of retirement. Planning ahead means taking stock of your fixed and variable costs, understanding your income sources and reviewing your portfolio with this stage in mind. And while spending may be higher now, remember that your savings still need to last. Outpacing inflation over the long term remains just as important as it was during your working years.
Stage 2: Finding your rhythm
By mid-summer, the pace settles. You know how your days flow, and the things that felt urgent in early retirement – the big trips and major projects – may start to give way to simpler pleasures closer to home.
This is a good stage to revisit the plan you made earlier. Are your cash flow needs still aligned with the income you have coming in? Have your priorities shifted? Downsizing often comes up here – for some, staying in the family home matters most; for others, the cost and upkeep no longer fit the life they want. Neither answer is the right one universally, which is why this is a stage where talking through your options can be especially valuable.
Stage 3: The abundant years
Like a warm August evening, this stage has its own particular richness – deeper relationships, settled routines and the wisdom that comes from decades of experience. For many Canadians, it’s also when health and healthcare costs become a more prominent part of the financial picture. Not everything is covered by provincial health care, and out-of-pocket expenses can add up for you and your spouse.
Planning for this stage is an act of care – for yourself and the people in your life. Keeping a portion of your investments liquid or setting up an emergency savings account with easy access to cash, can help you cover health-related expenses as they arise without disrupting the rest of your plan. And remember those estate documents you took care of as you transitioned to retirement? Reviewing your plans, POAs and beneficiary designations at this stage ensures they continue to reflect your current wishes
How to plan for the seasons of retirement
Whatever stage you’re approaching – or already in – a few habits can help your plan hold up over the long summer ahead:
Like summer itself, retirement is too rich a season to rush through. Those who get the most out of theirs tend to be the ones who plan ahead of for the journey.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
