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Monday, April 16, 2012

Will I be Ready to Retire?

When I originally conceived this blog, I thought it would help me make a plan for retirement. 

I had even created a tab which proudly stated: My 5 Year Plan. You don’t see it up top, do ya. Because it isn’t there anymore. 

My job involves a lot of process improvement. I'm actually a Process Architect. I make lots and lots of flow charts and lots and lots of instructions on how things should work. In the workplace. I was envisioning a bunch of Visio diagrams which would get me to a successful retirement when it struck me that I have never really followed a plan. 

As more and more people talk about "retired" life, I realized I couldn’t come up with a final plan because how does one actually put down on paper a “Plan” for any life event. Did I have a detailed plan when I went to University, started working, got married, had kids… 

Not really. Just high level dreams. Some came true and others were nightmares (thankfully not many). 

As I flipped through a bunch of blogs, I found advice on retiring happy, retiring successfully. Copious amounts of financial advice, spreadsheets, charts and lists to make sure I had enough money to live without working. Can anyone ever have enough money?

I also discovered that what one person likes to do in retirement isn't exactly what I would want to do. Many men I work with say they will golf every day. But here in Ottawa we have 4-6 months of snow. The golf courses are closed and I don't golf. Others say they will travel. But will they actually travel 52 weeks of the year? And will they have enough money to do that. Others will volunteer. I was told an interesting statistic at a retirement course: Of the people who say they will volunteer when they retire, 95% stop doing so after the first year. Those that stay have usually been life long volunteers. 

Will I be healthy enough to do the things I think I want to do. As I mentioned in my last post, my mom developed Multiple Sclerosis in her 40's and was in a nursing home by her late 50's. Their plans, if any, were screwed. 

Hmmmm… 

Figuring out what to do if you aren't working isn't as easy as it sounds. I guess I still have some stuff to think about. 
As I look at my age, I see a date, March 2018, approaching where I plan to retire and yet I really don’t know what it will mean to retire. I have a cool countdown gadget to tell me how many years, months, days and hours I have left before my planned date to walk out of my job on March 15, 2018. It’s in the lower right corner and keeps counting down. 

It now says less than 6 years before that date. I'll be 64. If my hubby lets me. His plans are for him and me are to work until we’re 90! But that is him and this is me. Yes we are a couple, for the last 30 years and plan to stay a couple. I expect at least another 30 years of life in both of us. 

I have only worked full-time for the last 11 years. I'm a public servant. A new federal budget came down two weeks ago with huge cuts to the public service. Things have been pretty tense around here wondering who will be cut. It is estimated that 19,000 to 30,000 jobs will disappear over the next 3 years. For now I am told I still have a job but it made me more aware of what would happen if I was "pink slipped". 

To see where we stand, I made a list of our monthly expenses and projected income. On an Excel spreadsheet of all things. We haven't been much for actually making or following a budget. My house was paid off years ago but there are still many expenses each month. I listed every thing I could think of and also included a very generous Miscellaneous amount as well as a monthly amount for Travel. 

I will receive a small indexed pension but not the same as someone who has maxed out with 35 years of service. The more years I work, the more pension I will receive. By my estimated retirement date I will have accumulated 17 years of service and expect about half of what most of my colleagues will receive. But it is more than a lot of people will get. We will both receive CPP (Canada Pension Plan) and Old Age Security (OAS), although my pension will be reduced by the amount I receive with OAS. I have no worries about healthcare costs. Those are covered now and will be for the rest of our lives. My hubby is self-employed so my estimates include his income. He's a Chartered Accountant which makes spreadsheets a very sexy communication tool. I haven't shown it to him yet. I need to pretty it up. Maybe do a little pivot chart.

Looking at the raw numbers, we could survive but if I can last another 5-6 years in the work force, the extra money I would be able to put away for retirement will make things a lot nicer. More travel, more activities, more of everything. 
But retirement isn't just about needing money. My BFF retired at the end of December. We both graduated from Teacher's College in 1977 and she has taught all those years. Me, I hated teaching and pursued other interests. But it made me think when she announced she was eligible for retirement with a full indexed pension, that maybe I should have stuck it out all those years ago. Alas, we cannot go back and must move on with where we are now. She actually took retirement earlier than planned to care for her mother and her brother who is gravely ill. 

Life got in the way of "The Plan". 

She had no master plan prepared which is probably a good thing. We had been tossing around ideas about what we would do when we retired but that's all they were. Ideas. It's one day at a time right now. Being a caregiver is immensely hard and time consuming. But also rewarding. She'll figure it out and keep herself busy now that the daily grind of teaching is gone. These next few years will be a journey of discovery for both of us for living the rest of our lives. 

So… 

I will explore what will make me happy. Now. 

And from there I won’t see retirement as something that has to have a final plan in place but an extension of my current life. I just won’t need the alarm clock to get me up each morning. 

Unless I want to get up early.
Sandy

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4 comments:

Grace. said...

So many questions, and so little direction with regard to answers. I feel much the same way. My retirement is six years off--my plan is to leave work on my 69th birthday. But while I have dreams of what I'll do when I retire, I can't say I have much of an actual plan.

Steph said...

I know I could Google the answer, but in Canada do they have Social Security for citizens when you reach a certain age?

When it comes to retirement, I'm turning 40 this year, so I am at the point where saving for my retirement is in my head. As you know, I'm a planner kind of gal. I have our household projected budget done for the next THREE years, so i know the when where and how of where I money will be spent. Our house will be paid off in 7 years, I contribute the maximum to my 403(b) retirement plan, Jason has his 401(k) and company stock plan with his job. I work for a unversity and it is my plan to stay working here for the next 15 years so Sarah will get her education paid for as part of my benefits package. We still have a college savings plan for her set aside to cover additional expenses.

Yet, all this planning could be for naught if something unplanned and dramatic happens. That is why I am NOT counting on Social Security to be a source of income for us when we are older. A life changing illness can wipe out savings in a heartbeat.

Although saving is important, so is enjoying life, which is one of the reasons we like to travel. Yes, we could save and save and save, but at what cost? being to old to enjoy it and our time together? Life has no guarantees, but as long as there is a reasonable balance, I feel we can enjoy both the fun together at a "youngish" age as well as living comfortably at an older age.

Big hugs to you!

Joey said...

Sorry lady, you aren't old enough to retire! I want to see that visio chart when it's ready!

Dinnerland said...

First: check out how your comment came out on my blog, hysterical!! It must be your iphone-- ha haha ha!!
Anyway: thanks for pointing out that I am not an f-up. Just a momentary and fleeting feeling.

I loved this post.
I am turing 42 this year and in a different stage of life with a 7 year old- we have college to pay for and think about for him as our primary financial concern at the moment.
But I am thinking of retirement savings already-- and just recently added up what we've put away so far... it is a start, but wouldn't last us many years.

Anywho: I think that what you're doing is totally wise and so 'process architect' of you. You're analyzing the models and possibilities for retirement.
And I believe you are totally right. Retirement is NOT where you go to 'die'- it is not the end, it is a new beginning...
And every person needs a purpose at each stage of life, so that will be the task for you to consider for your retirement. What will be the REASON(s) you'll get out of bed each morning?

I am thinking of my parents, who are nearly 70 and now both retired. They are SO DAMN BUSY, but they don't work... what do they do:
Exercise
Handle home business
Do some work on the side (they are retired professionals, so now they do what they did, but at a MUCH smaller scale and fewer and far between)
Relax/ nap (I envy this)
Shop / prepare food
Visit, Read
Travel
etc

Anyhow: that may not sound like your cup of tea-- but it is one way.
I know you'll figure it out, you're so smart and thoughtful, I'll be watching as you progress through this thought process and I'll be learning from you!!

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