Abbotsford News Friday, June 27, 2014
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ABBOTSFORD’S ACTIVE ADULTS A local monthly guide to events, resources and services for active adults
July 2014
Retire Happy Good research leads to good decisions Victoria Gill
CONTRIBUTOR
How much money will it take to be financially independent? That’s very much up to you. Ron Atchison, an investment advisor with RBC Wealth Management says, “There is no exact answer, as everyone’s personal situation is different…for example, a couple who wishes to drive new cars, take exotic holidays regularly, eat out frequently, as well as maintain a home and perhaps a summer property, will require substantially more money to sup-
port their lifestyle than a couple who maintains a modest home, travels occasionally and owns one economical car.” Getting accurate information on retirement planning is all about helping you make sure you don’t outlive your wealth and to ensure your retirement years are spent in comfort and security. As you can imagine, retirement’s not much fun when you don’t have enough money. The answer to any question involving money and time will depend upon a wide number of variables, many of which
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are not known in advance. How much will you spend? How fast will your investments grow? How long will you live? Some experts suggest you’ll need up to 70 per cent of your income before retirement, but Bill Murray, a certified financial planner from Investor’s Group said, “A cookie-cutter answer is impossible.” Research shows retirees substitute time for money. For example, they shop more for bargains and spend more time cooking. Yet not every couple spends less. Atchison points out, “When you stop working, perhaps your vehicle expenses will shrink and you may not have to buy work clothes. But if you are planning to travel more, maybe the income you will need won’t be lower.” Murray agrees, saying he has also found that a large number of retirees actually increase spending as they travel and make other expensive uses of new leisure time. He says the average person plans more for a one- to two-week vacation than they do on their
lifetime of finances. Murray adds, “Young people are in a mentality of earning and burning their money, which leads debt to be a major problem because 47 per cent – almost half of British Columbians – are living paycheque to paycheque. Atchison strongly recommends, “never letting your credit rating go bad … it is really hard to recover from that” and “one should plan to be debt free going into retirement.” Regardless of how old you are, it’s never too early to start thinking about retirement. Atchison advises, “Start with a small amount and increase it as you can. “You must control your debt, save something, and live within your means” to lead yourself to a successful retirement. For those who say it’s never too late, Murray says that with money it can be. If you’re close to retirement, there is a unique set of questions to ask yourself before saying goodbye to the life you’ve lived for decades. Making a visit to a financial planner is a good place to start.
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