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Dear Nancy,

I am 55 years old and I am looking at what I have saved over the years towards my retirement. I feel that I have not even come close to being able to consider retiring at the magic age of 55.

Mind you, I have raised four children and I know that in my early earning years I was not able to save much if anything at all. Is there hope for my ever being able to save and retire? I still have a mortgage to pay down as well.

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Dear John,

The days of people thinking that they could retire at 55 have long passed. It was promoted at a time when interest rates were a healthy 10 per cent plus during a raging bull market in the 1980s. The average Canadian now expects to retire at 68. The life expectancy of Canadians has also risen to 85 compared to age 75 in 1995. We are not only living longer but more active lives because we are healthier. As a result our cost of retirement has drastically increased as well. Should this discourage you even more? Not really. You will feel better if you manage your expectations around your retirement age.

The other interesting fact is that the average cost to raise a child in Canada to age 18 is estimated to be approximately $243,000 according to MoneySense Magazine. Since you have raised four children you have invested in your children rather than your bank account to the tune of almost one million dollars. I'm sure they were a worthwhile investment.

Don't despair. You have at least 10 years to refocus on saving and paying down your mortgage debt. You need to seek out someone to do a financial plan for you. Depending on what you have already saved and what you expect your retirement income needs to be you could still meet your retirement goals or at least know what they should be.

Just remember that we are in a historically low interest rate environment, and we don't know how long it will last. While it has lowered interest costs, it has also stymied the savers and those looking for freedom from their job at age 55.

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Having a financial plan at any stage of life is always a good idea. Find a financial planner or investment adviser who can give you projections of reasonable growth for your current assets and how they can best work for you.

Nancy Woods is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. Visit her website or send an email request to You can send your questions to as well.

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