Your golden years should be just that.
Last week John McCrank of Reuters provided an interesting report about what it’s like to retire in Canada. If it’s any solace in these tough times, McCrank tells us we are considerably less stressed out about retirement than Americans. In fact, he says the reality of retirement is far closer to expectations in Canada than it is to expectations in the United States.
McCrank is not just cranking out a general observation. His findings are based solidly on a recent TD Bank Financial Group survey, which showed that, “In Canada, 70 per cent of retirees say their post-working life is exactly, or mostly, what they thought it would be … In the United States, that number falls to under 50 per cent.”
Frank McKenna, Deputy Chairman at TD and former Canadian Ambassador to the United States, tells McCrank tough times have not hit Canada with the same brute force they have hit America. The recession, unemployment and stresses on housing markets have been much less severe here at home.
Well, I say thank heaven for that. But there is another matter I would like to introduce to the discussion. Namely, while it’s reassuring to know that lots of current Canadian retirees are getting along well, what about the many millions of us who have not yet retired? What for example might the future hold for the big wave of baby boomers who will be coming into retirement soon?
Among this group, those who have dutifully saved money over the years through smart, solid investments such as RRSPs will fare well. Those who have not managed their money intelligently might have to seek support from family and/or friends, and even look forward to extended years of work.
That can take the gleam off of anyone’s golden years. Indeed, I hate to be a party pooper amid positive news about Canadian retirees, but it would be remiss of me not to point out that for a number of years now far too many Canadians have been boxing themselves into financial corners. Through 2009, consumer debt in this country continued to be widely disproportionate to our ability to comfortably sustain the burden.
At Credit Canada, we see the results of this gap in the many desperate souls who seek our help through the credit counselling and debt management programs we offer. I can tell you that stresses associated with unwieldy debt loads are increasing dramatically these days. So we are redoubling efforts to educate people about the whys and wherefores of smart personal money management, and that includes saving for the long term.
As we like to say, retirement ought to be the best paying job in the world. But it takes wisdom, and real effort, to make it so.
McCrank performs what amounts to a public service when he points out, “Respondents on both sides of the border - 32 per cent in America and 28 per cent in Canada - said one of their biggest mistakes in planning for retirement was that they didn't start saving until they were over 40 years old.”
He goes on to quote Patricia Lovett-Reid, senior vice president at TD, on what it means to spend wisely in life.
"It's all about living within your means. It's not about keeping up with the Joneses, because they are broke,” says Lovett-Reid, who notes “the biggest challenge when planning for retirement is keeping or getting debt levels under control. The other key is to make a back-up plan, and that means saving early and saving often.”
Now there is advice that’s as good as gold.