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Book Excerpt

Careful planning lets you 'live it up' in retirement Add to ...

The following is an excerpt from the You Could Live a Long Time: Are You Ready?

Money matters, but it can't buy everything you need in Elderland.

Given our society's preoccupation with money as being the secret to a successful retirement, what is striking about the elders' advice is how little of it focuses on finances. The elders have varying financial circumstances, but, regardless of income level, they seem to have what they need. Some of them describe their income as modest but adequate. Some have income from employer pension plans or retirement savings plans. Some are still working. Some, who didn't have large incomes to begin with, now find they have more money than they did when they were younger because of payments they receive from Canada Pension Plan (CPP) and Old Age Security (OAS). This is Susan's situation: "I used to have to watch more carefully, but now I could live it up - if I wanted to!"

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That the elders seem to have adequate resources speaks volumes about their planning, and they suspect that many boomers are not behaving with the same kind of fiscal responsibility. "Some of the boomers don't seem to be putting aside any savings," says Dan. "You've been living in the boom years and assume that will always continue. You need to put some savings aside against your retirement." Dan's words were particularly prophetic given that he was talking to me before the 2008 recession. "You can't 'live it up' all your life and then expect to have enough put away for your eighties," Trudy says. "My husband and I were very careful to think of the future. You're going to need some money for your old age."

As the elders point out, more money means more options. "Because I have enough money, I can live on my own and hire a cleaning woman and have help with the garden," says Norah. "Also, good dental care costs money. If you can't afford a root canal, you'll need to have your tooth pulled out." Peter agrees, "You need to have a reasonable amount of retirement income to help you keep your physical and mental health. If you have failing health or resources, you might get pushed out of your home because the taxes are going up." Lucy decided to stay in her home rather than move into a retirement home because she was afraid her money would run out before she did. There were some reasonably priced government-subsidized long-term-care facilities in her city, but the waiting lists were too long. And the privately run homes she looked at were too expensive. "If I move into one of those places, it won't take long for my capital to disappear." Gordon says that having some financial resources allowed him to satisfy both his needs and his wants. "Money is very important because it gives you choices. Without some financial resources I could not have led the life I have."

A good number of seniors feel the same way as the elders. In a 2008 Canadians and Retirement survey conducted for TD Bank Financial Group, more than half of the retirees (54 percent) say that it's important to start saving early and people should make it a priority. A similar number advise pre-retirees to pay off debt before they retire. Only 43 percent of the retirees were confident that they had planned well and saved enough for retirement. Over a fifth of the retirees found that their most difficult adjustment was not being able to do the things they used to because of financial constraints.1

The problem is, no one can tell us how much money we'll need when we get old because it all depends. It depends on the fiscal stability of the government and its willingness and capacity to subsidize the elderly. It depends on our care needs and what it will cost to retain our independence. It depends on our own tastes and interests. Will we still love expensive wine and exotic travel right to the end? And it depends on the length of our life.

Aunt Jean is an interesting example of a wealthy life based on a limited income with riches that money can't buy. Her company pension was extremely modest, and even with the addition of government benefits, her retirement income was very low. Although the facts would place her close to the poverty level, the reality of her life as a senior was one of riches-for the simple reason that everything she wanted to buy, she could-and did. The things that really mattered to her were of the heart and were given freely. But let's look at the money first. One of her greatest joys was giving gifts to others, and by using home-shopping catalogues she was able to continue to do this until the day she left her retirement home for the hospital. All her life she managed to find just the right present for each of her family members, and she started doing the same for the retirement home staff. She also donated money to her favourite charities, right up until her death. As she aged, she spent less money, aside from these modest expenditures, because what she wanted-companionship, intellectual stimulation and fun-she received from family, friends and retirement home staff. And the things she had loved to spend money on when she was younger, like travel, no longer interested her. So, since the monthly rental at her retirement home was low and her health care costs were negligible, thanks to government subsidization, her financial demands were limited. Spending as she wished and never scrimping, even with a very low income, Aunt Jean was still able to leave an inheritance to her sisters.

Excerpted from You Could Live a Long Time: Are You Ready? by Lyndsay Green, copyright 2010. Reproduced courtesy of Thomas Allen Publishers. All rights reserved.



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