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Retirement planning's flaw is that it's often based on generalities, with too few numbers reflecting the spending of actual retirees.

You know you need to save long and hard for retirement, that the right approach is a diversified portfolio with a long-term focus and that longer lifespans mean you should be thinking about having enough money to last into your 90s.

But what's retirement really like from a financial point of view? How likely is an unexpected financial crisis, and how do people cope financially? How big a deal are health care costs? How feasible is it to plan on working in retirement?

Answers to these questions can be found in a new report issued this week by the Ontario Securities Commission and prepared by Brondesbury Group, a consulting firm. It's called Financial Life Stages of Older Canadians and reading it is an education on managing money in retirement.

The report is based on 1,532 online survey interviews completed early this year by people aged 50 and up.

Here some key insights from the report about what living in retirement is really like.

The financial situation of your adult children and other family members is a big factor

Six in 10 people who participated in the study experienced a major financial event that challenged their financial plans. Tied for top spot among the most common major events was supporting family members, at 16 per cent.

Preparatory interviews conducted in advance of the study offered some details on the kinds of support provided. In some cases, it consisted of down-payment money for adult children buying a house. In others, support was provided to a family member dealing with a chronic problem, such as mental illness or addiction.

Don't rule out the possibility of providing financial help to parents after you've retired. At age 65, it's possible to have parents in their 90s who need help affording long-term care.

The takeaway:

Consider the needs of your adult children and other family members when figuring out what your spending obligations in retirement might be.

Health care costs demand attention

Health care expenses were tied with supporting family members for top spot among unexpected major financial events experienced by people in the study. Also, it's clear that health care issues will be a factor for most people as they age.

Two-thirds of people in the study aged 75 and up reported major medical problems, with median out-of-pocket health care costs for this group pegged at $2,000 annually. One in eight households spent over $5,000 a year. More than half of the 75 and older group reported having chronic ailments like arthritis, diabetes, heart disease, kidney failure, lung disease, multiple sclerosis and stroke. Another three of 10 have continuing mobility problems, and almost one-quarter suffer from chronic pain.

Preparatory interviews conducted by the Brondesbury Group found that specific health care costs included transportation for those living outside big cities to get to health care facilities, as well as costs related to vision, hearing and physiotherapy.

The takeaway:

Consider adding health care expenses to your anticipated retirement budget at $166 a month, or $2,000 a year. If you don't spend it, bank it for later.

You may need to live on less than you planned in retirement

Faced with an unexpected financial event, 55 per cent of people in retirement cut household spending, 30 per cent cashed in savings or investments, and 14 per cent borrowed money.

The takeaway:

When planning for your retirement years, develop an ideal budget and a worst-case budget that lightens your monthly spending and frees up money for other purposes. Keeping a home-equity line of credit for emergencies also makes sense.

Don't count on working past retirement age

Working longer is the superglue of broken retirement plans because it postpones or reduces your need to draw down your savings. But there's growing evidence that a lot of people simply won't be able to keep working.

In fact, more than one-third of retired people in the study aged 50 to 74 were forced to retire early. Roughly two-thirds of the early retirements were health-related – 60 per cent retired owing to personal health issues, and 6 per cent had to quit work to look after family members. In other cases, people were forced to retire by their employer or offered an attractive retirement package.

Just over half of people who retired early learned to manage financially, but some needed to take exceptional measures. Seven per cent sold a home or cottage, and 9 per cent sold other assets like a car or boat.

The takeaway:

Your retirement plan needs to stand on its own, without the support of working past retirement age.

Fraud is a problem

Seniors are a prime target for fraud because they have financial assets – retirement savings, homes, cottages – and because they're vulnerable. Their cognitive abilities may not be what they once were, and some people may be lonely and looking for human contact.

Six per cent of people in the study said they had been victimized by investment fraud, and nearly half believe they had been approached by fraudsters through the Internet, a phone sales pitch or other means. The good news is that most frauds were not serious enough to dramatically change the financial well-being of those affected.

The takeaway:

Unless you know and trust someone, the two-word response to all sales pitches is "not interested."

Things will work out

Forty per cent of people who had yet to retire worried that they did not prepare enough for retirement. The comparable number among those who had retired: 25 per cent. "For the most part, people learn to adjust to their retirement income and develop a lifestyle in accord with their income and interests," the OSC study said. "Finances are not a major source of stress."

The takeaway:

Retirement is a lot like your working life – your income is what it is and you adapt.

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