“Retirement: Something arrived at in haste and lived at in leisure.” Dave Erhard
I realize everyone’s retirement is different and personal. I am not here to tell you what you should do in your retirement and retirement planning. I will, however share my experiences in hopes you can benefit in some way. I do think that the whole planning process takes time and the decision to retire should not be made in haste.
For 4 or 5 years before I actually retired, I started to think about it, mostly because my spouse had retired. When I would think about it, I would say vehemently: “No, I’m not ready. What would I do all day? I would be bored. I have never been with my spouse 24/7, 365 days per year. Can I handle that?” I still liked my career and my clients and knew it wasn’t the right time. But in the last year or so, I started to sense a change. I was feeling like going to the office every day just wasn’t as much fun anymore. Keeping up with all I had to keep with was becoming a chore and I just wasn’t wanting to do it anymore. I did start to take more time off than I ever had before. I started to think more and more about our travel plans which have been on the back burner for years. I thought about what I would do if I didn’t have to go to work.
It was definitely a process that evolved over time. I didn’t just wake up one day and say “I’m done.” Then my thoughts started to be about “Can I make this happen?”
As a bit of background, my spouse was in the Canadian military for 36 years both in the regular force and the reserve force. Yes, he has a pension and a good medical plan which are positive things. But because of all the moving around over the years, we had not been very successful in the real estate market. We did purchase a few homes over the years. We would buy a home when we would get posted to a new base, sometimes whether it was a good time in the market cycle or not. Then we would sell when we were transferred again. We never managed to buy and sell at good times, so never really made much money in real estate. In hindsight would we have done things differently? Perhaps. But we can’t go back, we have to deal in reality. Also when my spouse moved for his job, so did I have to quit my job and start over again. Because of that, I did not ever have enough years with any 1 employer to get much of a pension for myself. We did manage to contribute to RRSP’s over the years, so we have that savings. While not huge, it’s something. As Canadian baby boomers know, we can take our CPP (Canada Pension Plan) as early as age 60, but there are steep penalties for doing so. My advice to anyone contemplating retirement, is to get a consultation with a financial advisor, accountant or some trusted source before deciding whether to take CPP early or not. For me, I decided to hold off for a bit. I plan to bridge some money from my RRSP’s to give me some income until I take my CPP. Everyone’s situation is unique and you should gather your facts and get advice before deciding.
So when I added the RRSP income to the pensions my spouse receives, then I knew the income we can plan on. We won’t be rolling in money by any means, so will it be enough?
Then I turned to the liability side of the picture. We had a good sized mortgage on our home. If we were planning to stay at home and do nothing but enjoy our home, then we could leave it as it is and be OK. But we have other plans including some travel. How could we do that and handle this mortgage? Of course in a perfect world, having a paid off house going into retirement is preferable but considering the above facts, in wasn’t meant to be in our world. We started to look at the real estate listings. What if we sell our big house and get something less expensive? What would that look like? We are used to moving a lot, so doing it again did not phase us. Also because of our moving around all of our lives, it kind of made sense in my mind to move and then start a new phase. After all I had done that all my life.
We could downsize to a lesser priced home and free up some budget that way. We looked at listings every week for a year. We concluded that the only way to stay in our community was to look at condo’s. While that made sense in some ways, after all we did want to travel, so not dealing with a yard would be good, we decided a condo was not the answer for us. My spouse has hobbies for which he requires a large garage space. The solution we came up with was to move to a town 30 minutes drive north. We were able to get a single home with a garage for his hobby and a small back yard which we will hardscape, so no mowing. The home still has almost 1600 square feet, so we won’t be in each others way as we might be in an apt. For us, this was important as I have always worked full time and am not used to being home all day. So on the market went our home.
It sold very quickly and the purchasers wanted a long close period which worked out great as our new place was still being built. That all worked out like it was meant to be. So now all of a sudden, our numbers started to make sense. Maybe this can work out!
Some big decisions and changes made! All of this took time to evolve and while that was all percolating there were other things we were doing to plan for retirement as well. Stay tuned for future posts where I will share some of that planning process. Here is a picture of the beach near our new home. We think we made the right choice!