Many people will reach a magic moment in their life when they realize they can retire comfortably while for others it won’t be a moment but rather a gradual realization. So, what makes you sure you can retire? Is it a feeling, or will you need to crunch the numbers? For many the answer is simple; reliance on government pensions require them to wait until age 65 before they can retire.
Note: For 2024 the maximum CPP is $1,364.60 and the maximum OAS is $713.34 for a total of $2077.94 per month.
Is Retirement a Choice?
What many people don’t realize is that sometimes retirement isn’t even a choice but rather a forced reality. The moment might be forced on you due to health, inability to find employment, or the need to care for others (such as parents or children).
Why is retirement a magical moment? Once retired you no longer worry about finding or keeping a job. The most of the expensive goals are behind you (kid’s education, paying for a house, saving for retirement). You finally get to collect your government pensions. And best of all the stress of working is gone.
Is Freedom 55 for You?
The holy grail of retiring is the coveted freedom 55 however most of us won’t be able to retire that early. Since to retire at 55 you’ll need to support yourself for at least 10 years before government pensions start at age 65. You’d therefore need a very large nest egg to achieve freedom 55. For those who have significant mid-life debt obligations the dream of retirement at age 55 will be very well beyond reach.
Saving for retirement or early retirement is one of the most difficult life goals you’ll ever face. Unfortunately it’s also one of those goals many people don’t do properly. This results in a need to work past retirement age or a lowering of lifestyle in retirement.
You can’t do much about your needs, but a great deal of savings can be had if you manage your wants carefully.
Difficult doesn’t have to mean impossible; desire drives perseverance and willpower. For those who do get it right they are well justified in being proud of the results of years of dedicated savings and small sacrifices.
Live sensibly. There is no need to give up enjoying life now in hopes of a great life later.
Retirement Envy
The unexpected result of retiring is the envy others have when you announce your retirement date. Actually many people will be green with envy. The inevitable questions that follow are usually “how did you do it”, followed by denial such as “what, you’re able to retire early and HOW”? A common reaction will be surprise and disbelief that you could possibly be sure that you can retire.
These reactions are followed by the regrettable “sure wish I could do that too”, or “I’m a long way away from getting to there”. Some will even react with anger or the all too common “life’s not fair”. Remember that envy, jealousy and anger won’t get you to your own retirement party.
Over the years when I saw people around me retiring I considered it a call to action. Rather than let myself give in to envy, jealousy and anger, I realized that if they could do it so could I. The next time you attend a retirement gathering for a colleague ask yourself if that’ll be you someday, or do you need to rethink your retirement savings plan.
Disclaimer for ManageYourMoney.ca
The information provided on ManageYourMoney.ca is intended for educational and informational purposes only. It should not be taken as financial advice. The opinions shared are those of the authors and are meant to encourage sensible financial habits and decision-making. We recommend that you do your own research or consult a certified financial advisor before making any financial or investment decisions. All investments come with risks, and there is no guarantee of success. Past performance is not a reliable indicator of future results. Always consider your personal financial situation and risk tolerance before pursuing any investment opportunities.
As always, I am not a qualified financial advisor. I just relate financial management to my own experience which may not resemble yours at all. Advice is frequently worth exactly what you paid for it. Most of mine came from expensive experiences.
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