If you want to know what retirement will be like, ask a retiree. There are plenty of financial planners and other experts who have views on this topic, but there's no substitute for the voice of experience.
I asked retirees on my Facebook personal finance page about their biggest surprises – both good and bad – after leaving the work force. One of the replies I received was this excellent note from David Davidson of Oakville, Ont. Here's a lightly edited version of his post:
My retirement was well planned but here's what I've learned since my wife and I retired a little over two years ago:
1. You don't need as much money as the financial industry says you do. Sure, more money is better than less, but we sacrificed a lot to max out our RRSPs every year and then also max out TFSAs when they came along. I see now that we needn't have sacrificed so much while working. In fact, I find we have more money to spend in retirement than we had when we were working. Not having to furiously save for retirement frees up a lot of cash.
2. We are BUSY in retirement. Pre-retirement, I did worry about not having enough to fill the days, but there is so much to do it's hard to fit it all in. Of course, unlike work, no one is going to bring you something to do every day. You have to go out and find it yourself. The upside is you get to choose what brings you the most joy. Hiking, volunteering, gardening, travelling, twice a week at the gym, and joyous times spent with our grandchildren. As I often say: "If you are bored in retirement you aren't really trying."
3. The stress reduction for me was huge. Years of working to meet ever higher demands with continually reduced resources and budgets was leading to more stress than I realized. Now, I call the shots and if I don't want to do something, then I don't do it.
4. It is psychologically hard to spend down what you've spent decades saving. When the time comes to retire, it is remarkably hard to change your mindset from saving for the future to spending for now. The reality is that we only have so many healthy, disability-free years left. If you didn't save all that money so you could spend it [when healthy], why did you save it? Remember: "When you are retired, the future is now.
5. Understand that you'll need some time to figure out what to do with the rest of your life. I read a tonne of retirement books on the financial side (overall they seem to say "never spend anything ever" though Fred Vettese's The Essential Retirement Guide is a notable and recommended exception).
6. I was nervous before making the jump to retirement, but now that I've done it I wonder what I was worried about. My retired friends say the same thing.
Subscribe to Carrick on Money
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
NEW: Get the Real Estate newsletter, covering the housing market, mortgages, deal closing, design and more. Sign up here
Another view on retirement
Financial planners explain what they learned when they left the work force. A nice complement to Mr. Davidson's list.
How to boost a weak credit score
Four words that say Fun!
Personal finance summer camp – it's a thing in the United States. Learn mortgage amortization instead of canoeing. I tweeted a link to this article and got the following response from Scott Terrio of insolvency trustees Cooper & Co.: "Cripes. Teach it in school & let kids have fun in summer."
Women lack investing confidence? Wrong.
The financial industry consultants at Strategy Marketing deconstruct the idea that men are more confident than women in handling money. This is an article aimed at investment advisers, but I think it's worth reading by investors as well. The key message is that when women ask a lot of questions about investing, it's not because they lack confidence. They're just being thorough.
Attention, Costco shoppers
Here's a blog that lists sales at the warehouse retailer Costco in the provinces of British Columbia, Alberta, Saskatchewan and Manitoba.
I asked readers of this newsletter to report on the right amount of money to spend on a bottle of wine when invited to dinner. In this video, I summarize the 150-plus responses I received. Thanks to everyone who weighed in.
More Carrick and money coverage
Send us an e-mail to let us know what you think of my newsletter.
Want to subscribe? Click here to sign up.