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retirement planning

When Linda and Ken Flemington started talking about where they would retire, there was one thing upon which they could both agree.

“Both of us had visions of retiring somewhere where there were mountains and water,” says Mr. Flemington, 73. At the time, the couple lived in Oakville, Ont., where she was the CEO for a credit union while he owned a sand and gravel pit.

To narrow their retirement choices, the couple travelled extensively to check out possible destinations – Kelowna and Kamloops in British Columbia and Prince Edward County in Ontario.

“I remember saying to Ken, ‘This is one of the toughest decisions we’ve had to make,’ ” Ms. Flemington, 70, says. While her husband was leaning toward the West, she preferred to stay near their children and grandchildren, who also live in Oakville.

“You make these decisions because you want your family around,” she says. “You don’t want to be in their face, but you also want them close enough that you can spend time with them.”

In the end, the Flemingtons decided in 2006 to move to a large bungalow with loft in a new development called Blue Shores in Collingwood, Ont., 150 kilometres north of Oakville on the shores of South Georgian Bay.

“We don’t have a mountain, but we have a hill,” Ms. Flemington says. “We can see the water from our porch. We’re golfers, and there’s lots of golf courses up here and the summer life is wonderful.”

Linda and Ken Flemington walk through the Blue Shores development to which they retired in Collingwood, Ont., 150 kilometres north of Oakville on the shores of South Georgian Bay. (Peter Power for The Globe and Mail)

As for Mr. Flemington, “If I wanted to keep my spouse, I had to sort of hang around,” he jokes. “No, the truth is, Collingwood offered just about all the things we were looking for.”

Susan Eng, vice-president for advocacy at CARP, the Canadian Association of Retired Persons, says the question of where a couple will live is a conversation worth having – well in advance of retirement.

“The reality today is people are having longer, healthier lives,” she says. “Our average lifespan is hitting about 83, and medical science can keep us going [well past that]. So now you have another 20 to 40 years of life, a good third of your whole lifespan, that you haven’t planned out.”

I remember saying to Ken, ‘This is one of the toughest decisions we’ve had to make.'
Linda Flemington

The first step is to make sure couples are on the same page, says Evan Hickey, financial planner for the Royal Bank of Canada in Halifax. To start, Mr. Hickey asks couples to prioritize the top three areas of their lives, which can cause disagreements right in his office.

“For some people, the priorities might be, ‘Family, legacy and home,’ while the other person might say, ‘Lifestyle is important, and legacy isn’t,’ because they don’t care if they leave anything for their kids,” Mr. Hickey says. “And for each life area, there are financial implications.”

If a couple is considering a move, it’s important to get a full and formal financial plan, Mr. Hickey says, which will help them assess how a move will affect their financial future.

“We can model different scenarios – assuming debt reduction occurs at this pace and house value increases at this pace,” Mr. Hickey says. “We plug everything in and have the discussion – if you sell and buy a place for this amount, this is what you will have left from a retirement perspective.”

Vancouver-based financial planner Diane McCurdy, president of McCurdy Financial Planning Inc., says people should be wary of assuming that the sale of their home will be a financial windfall.

“People forget about the transaction costs, legal fees, moving costs,” she says. “They may want new furniture because the existing furniture doesn’t fit.”

It’s also important to consider how your new location will affect your lifestyle, Ms. McCurdy says.

“If you want to go somewhere more rural, you have to consider, ‘Do you want to walk to your amenities? Is there a good hospital there? If you’re moving to a cottage or cabin, are you isolated? Is it dark driving in the winter?’ ”

If possible, before selling a long-held family home, Ms. McCurdy suggests that retired clients try renting in a new locale in all seasons to confirm that they like it as much in fall-winter as they do in spring-summer.

If you want to go somewhere more rural, you have to consider, ‘. . . Is there a good hospital there? If you’re moving to a cottage or cabin, are you isolated?'
Diane McCurdy, president of McCurdy Financial Planning Inc.

Another reality for many boomers, Mr. Hickey says, is that they may need to care for aging parents. “They don’t want to move too far away from their parents, so for some clients, it’s meant having to delay their own travel plans that they had in mind for retirement.”

Hugh Kruzel and his wife Susan, both 53, thought they were purchasing a home they could retire in when they moved from Ottawa to Victoria in 2007. Susan, as a member of Canada’s armed forces, had been transferred to CFB Esquimalt.

“We bought a nice penthouse downtown, and thought the West Coast is where we’re going to retire,” Mr. Kruzel says. “But the reality is, for those of us in the sandwich generation, other things come up.”

After the health of Mr. Kruzel’s parents began failing, he started travelling back and forth from Victoria to his childhood home in Sudbury, Ont. As the bills for flights began adding up and his parents’ health deteriorated, Mr. Kruzel decided he needed to move in with his parents while his wife would remain in Victoria. When he was offered a job as a project manager at the Northern Centre for Advanced Technology (NORCAT) this past August, he took it.

“I am there to support their decision to stay in their own home,” Mr. Kruzel says. Although he feels very positive about his choice, the challenges of living in two different cities that are about 4,000 kilometres apart has put a strain on his marriage and has put their retirement plans in limbo.

“I have come to the conclusion after watching my parents that for all our great plans, time and life still tend to shift things quite a bit,” he says. “Surprises come our way.”

Couples need to consider just these kinds of surprises when making plans, Ms. Eng of CARP advises. For those thinking about relocating for retirement, don’t forget to add your own health into the equation, she says.

The Flemingtons decided in 2006 to stay in Ontario and move to a large bungalow with loft. (Peter Power for The Globe and Mail)

“You may be super-healthy now, but you could fall, you could have a stroke, anything can happen and then all bets are off,” she says. “If people haven’t engaged in this conversation before, they have to do it, because these things are life-changing.”

The Flemingtons are already thinking about their next step. Since their move, Ms. Flemington has had a hip replacement and they are considering moving to a smaller home or a condo in Collingwood.

“We’re trying to think about the next five years, what’s next for us?” she says. “We’re pretty active right now, but in five years we don’t know. We want to think ahead.”