For many people, a happy retirement where you’re able to do the things you want to do is the ultimate life goal. But the transition from a successful career to this stage in life isn’t always easy. Dr. Saunia Ahmad, Clinical Psychologist, Toronto Psychology Clinic and Georgia Swan, Tax and Estate Planner, TD Wealth, join Kim Parlee to talk about ways you can prepare both emotionally and financially.
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* For many people, a happy retirement where you're able to do all the things that you want to do is the ultimate life goal. But all that excitement and anticipation could come with just a titch of anxiety and, in some cases, hesitation, because, let's face it-- retirement is a big life change. You don't really know how you're going to fare and how you're going to feel.
And you may not know exactly what steps you need to take to make truly the most of it. Here's Karl's story.
* One of the things that makes people hesitate to retire is not having a clear path or moving from salary to savings. There was a point in my corporate journey that I knew I was ready for retirement. You do get to the point where you want to start doing something different.
* So you start thinking what that next step is. What I envisioned for my retirement-- spend time with family, spend more time golfing, and also spending some time using my experience to help give back to the community somehow. You have your dream, but you don't always see the clear path in how you realize that.
* Joining me now to talk about how people can prepare for that transition to retirement, both emotionally, and think about how to be financially secure once they get there, and see their dreams come true, and come to fruition is Dr. Saunia Ahmad. She's a clinical psychologist at the Toronto Psychology Clinic, and Georgia Swan, Tax and Estate Planner at TD Wealth. It is lovely to have you both here.
* Thank you.
* Let's start with retirement-- big mental shift. Most people I know are pretty giddy, quite frankly, to think about getting towards retirement-- maybe that's the people I'm around. But there is a change of velocity of going non-stop to stopping. What's been your experience of people going from that change, plus also the experience of maybe they don't have an income in the same way anymore? They don't have the ability to generate income in the same way anymore.
* As you said, retirement is a change. What we're talking about is a change. And when people are dealing with change, it's natural to feel some level of stress, and uncertainty, anxiety because they're going from working and doing things that gave them self-validation, self-worth, and a structure and a routine to god knows what.
* So there's some excitement, for sure, because all of a sudden there's going to be freedom and more time. But there's also a lot of nervousness. And what my clients have often told me, what they found is most helpful is having a plan-- planning ahead for this phase of their life and making sure the plan is balanced with aspects of their mental, physical, and social well-being being addressed because those are the things that they end up losing when they're not working and need to recreate that, as you said, in this new phase of their life.
* Do you think people always understand how to get to the things that they want to do in retirement? They have this idea that, oh, I want to do all these things. They may not have a path towards it. Maybe that creates some anxiety. Have you heard of that?
* Certainly. They don't really know what it's going to be like. They try to figure it out in advance and are worried that they need to have a plan that's going to absolutely work. But what I tell them is that, often, you're planning ahead, but know that your plan will evolve afterwards.
* Most people they say when they retired, they were happy shortly after. But then there was a time where they start to feel some feelings of listlessness, boredom, loneliness for a while before they found their sort of new ground and new sort of structure and routine that gave them a sense of fulfillment. So it is an adjustment. And it can be done well. And it's OK to feel some anxiety and worry, but know that if you reach out and speak to others who are also dealing with the same, it can be very helpful and a very fruitful adjustment.
* Yeah. Yeah. I know that the financial preparation causes all sorts of anxiety for people. So how do you, I guess, start to alleviate that anxiety and get ready for it?
* Well, really, the first step, I think, is planning early because you can't manage your mental health during that time if your financial health is not in place. So you should be thinking about what's the timing of your retirement. Are you five years away? Are you 10 years away?
* Now, certainly, in the best of my world, I would say start planning for retirement the first day that you start working. But depending on how far out you are, that's going to depend on how much money you have. And then, certainly, budget-- what is it that you're thinking of doing in retirement? And what's that going to cost you?
* There's a lot out there that says you should plan for about 70% of your working income as being what you need to support your retirement. But people may find that might be more than they need or sometimes even less, especially if you have those big plans that all of a sudden you're going to do in the first couple of years. So the other thing that financial planning is important, not just how much are you going to spend, how are you going to make any money in retirement?
* So how are your investments and savings going to support your retirement life? Where else might you be getting income? So do you have a pension? CPP and OAS, of course.
* But the one thing that I don't like to see, sometimes I have clients that are, well, my retirement plan is I'm going to inherit money from my parents. Bad retirement plan, because you never know where that's going to take you. So working with a good financial planner is important because there's so much more even to this section that I could talk about. But really, they can help you articulate the questions that maybe you didn't even know you had to ask.
* And I even think about now, longevity-- people are living longer. And then you have to think about you're not going to be taking worldwide trips every year until the inevitable happens. It happens to all of us. You've got your active years of retirement, your less active years of retirement. What about doing an estate plan? Does that help relieve the anxiety a little bit in terms of helping at least that part of things?
* Well, definitely. We've talked today about managing your mental health. We always talk about managing your physical health. This is part of managing your legal health-- making sure the documents that are in place so that if anything happens, the transition of the management of your assets is seamless. So if there is an incapacity, that you have powers of attorney for property and personal care in place and the people that you've put in place are trusted people that you know will manage your assets.
* And then, of course, planning for the inevitable when you pass away-- again, when you have that good plan in place, your assets are going to transition properly. And that's a huge weight that can often be lifted off people's shoulders because they say, no, I have things in place. Things are going to happen well. So that's another huge element of it from a financial and, I guess, legal perspective too.
* So estate planning helps relieve the anxiety a little bit in terms of just planning ahead. And you also mentioned, I think, maybe having the mindset to know that you're going to know more once you're in it. And anxiety may be part of it, just to understand how you're doing it. Is there anything else we can do to prepare?
* Certainly the most important thing, I think, is to pay attention to how are you feeling. Because emotions are what lead to the anxiety, and stress, and depression. Your feelings tell you what this transition means to you.
* And the more you try to explore that inside yourself, the better you can understand what is it that you need in retirement. And again, the better plan you can make. So if we're talking about financial assets, I say think about your time that you're going to have as your most precious asset and where are you going to distribute that.
* And it's important to make sure it's well balanced. The mental aspect is important-- keeping your mind engaged, reading, hobbies. The physical aspect-- staying active. That helps you not just physically but also mentally. And then socially, being engaged, these are really important to getting a really good sense of self-- feeling more confident and lifting your mood as well as your transitioning. People find that if they have that balanced portfolio, I call it sometimes, with their retirement plan, they're able to better adjust and enjoy their retirement.
* Have you seen people do it really well, where you go, yeah, you know what? People should follow the plan that you've done. What have they done that they've done things really, really well?
* Well, what they did really well is when they retired, I found that they were still doing things that related to their profession that they enjoyed. They didn't stop it entirely.
* Like a semi-retirement almost.
* Exactly. And then their retirement went on, and they were actually widowed, and they met somebody, and they were very happy. They didn't expect to start a new life with someone. And meeting somebody actually helped them put away what they were doing shortly after during their early part of their retirement where they completely stopped working because they had someone to live their life with and enjoy their life with.
* So it was really beautiful to see that. Having said that, I really want to also emphasize that there are some people who are struggling quietly and not really sharing how they're doing because they see others are doing really well.
* Yes.
* And so always be conscious that if you see others doing well, know that not everyone always shares. If you're struggling, if you're finding it hard, professional help is helpful not just for a clinical diagnosis but for just somebody who's dealing with an adjustment and they need a space to talk through and figure out how to navigate. And I find retirement is not the end. It's the beginning of a new chapter in one's life.
* Yeah. Yeah. And of course, at the end also, talk to somebody for some psychological help but also financial help. Just talk to people and get your ducks in order.
* Absolutely. Yeah, that's the first order of business, really. Because you may think that you have what you need to retire at 55, but they're the ones that are going to tell you if that's true.
* Yeah. Thank you both. Great conversation.
* Thank you.
[MUSIC PLAYING]
And you may not know exactly what steps you need to take to make truly the most of it. Here's Karl's story.
* One of the things that makes people hesitate to retire is not having a clear path or moving from salary to savings. There was a point in my corporate journey that I knew I was ready for retirement. You do get to the point where you want to start doing something different.
* So you start thinking what that next step is. What I envisioned for my retirement-- spend time with family, spend more time golfing, and also spending some time using my experience to help give back to the community somehow. You have your dream, but you don't always see the clear path in how you realize that.
* Joining me now to talk about how people can prepare for that transition to retirement, both emotionally, and think about how to be financially secure once they get there, and see their dreams come true, and come to fruition is Dr. Saunia Ahmad. She's a clinical psychologist at the Toronto Psychology Clinic, and Georgia Swan, Tax and Estate Planner at TD Wealth. It is lovely to have you both here.
* Thank you.
* Let's start with retirement-- big mental shift. Most people I know are pretty giddy, quite frankly, to think about getting towards retirement-- maybe that's the people I'm around. But there is a change of velocity of going non-stop to stopping. What's been your experience of people going from that change, plus also the experience of maybe they don't have an income in the same way anymore? They don't have the ability to generate income in the same way anymore.
* As you said, retirement is a change. What we're talking about is a change. And when people are dealing with change, it's natural to feel some level of stress, and uncertainty, anxiety because they're going from working and doing things that gave them self-validation, self-worth, and a structure and a routine to god knows what.
* So there's some excitement, for sure, because all of a sudden there's going to be freedom and more time. But there's also a lot of nervousness. And what my clients have often told me, what they found is most helpful is having a plan-- planning ahead for this phase of their life and making sure the plan is balanced with aspects of their mental, physical, and social well-being being addressed because those are the things that they end up losing when they're not working and need to recreate that, as you said, in this new phase of their life.
* Do you think people always understand how to get to the things that they want to do in retirement? They have this idea that, oh, I want to do all these things. They may not have a path towards it. Maybe that creates some anxiety. Have you heard of that?
* Certainly. They don't really know what it's going to be like. They try to figure it out in advance and are worried that they need to have a plan that's going to absolutely work. But what I tell them is that, often, you're planning ahead, but know that your plan will evolve afterwards.
* Most people they say when they retired, they were happy shortly after. But then there was a time where they start to feel some feelings of listlessness, boredom, loneliness for a while before they found their sort of new ground and new sort of structure and routine that gave them a sense of fulfillment. So it is an adjustment. And it can be done well. And it's OK to feel some anxiety and worry, but know that if you reach out and speak to others who are also dealing with the same, it can be very helpful and a very fruitful adjustment.
* Yeah. Yeah. I know that the financial preparation causes all sorts of anxiety for people. So how do you, I guess, start to alleviate that anxiety and get ready for it?
* Well, really, the first step, I think, is planning early because you can't manage your mental health during that time if your financial health is not in place. So you should be thinking about what's the timing of your retirement. Are you five years away? Are you 10 years away?
* Now, certainly, in the best of my world, I would say start planning for retirement the first day that you start working. But depending on how far out you are, that's going to depend on how much money you have. And then, certainly, budget-- what is it that you're thinking of doing in retirement? And what's that going to cost you?
* There's a lot out there that says you should plan for about 70% of your working income as being what you need to support your retirement. But people may find that might be more than they need or sometimes even less, especially if you have those big plans that all of a sudden you're going to do in the first couple of years. So the other thing that financial planning is important, not just how much are you going to spend, how are you going to make any money in retirement?
* So how are your investments and savings going to support your retirement life? Where else might you be getting income? So do you have a pension? CPP and OAS, of course.
* But the one thing that I don't like to see, sometimes I have clients that are, well, my retirement plan is I'm going to inherit money from my parents. Bad retirement plan, because you never know where that's going to take you. So working with a good financial planner is important because there's so much more even to this section that I could talk about. But really, they can help you articulate the questions that maybe you didn't even know you had to ask.
* And I even think about now, longevity-- people are living longer. And then you have to think about you're not going to be taking worldwide trips every year until the inevitable happens. It happens to all of us. You've got your active years of retirement, your less active years of retirement. What about doing an estate plan? Does that help relieve the anxiety a little bit in terms of helping at least that part of things?
* Well, definitely. We've talked today about managing your mental health. We always talk about managing your physical health. This is part of managing your legal health-- making sure the documents that are in place so that if anything happens, the transition of the management of your assets is seamless. So if there is an incapacity, that you have powers of attorney for property and personal care in place and the people that you've put in place are trusted people that you know will manage your assets.
* And then, of course, planning for the inevitable when you pass away-- again, when you have that good plan in place, your assets are going to transition properly. And that's a huge weight that can often be lifted off people's shoulders because they say, no, I have things in place. Things are going to happen well. So that's another huge element of it from a financial and, I guess, legal perspective too.
* So estate planning helps relieve the anxiety a little bit in terms of just planning ahead. And you also mentioned, I think, maybe having the mindset to know that you're going to know more once you're in it. And anxiety may be part of it, just to understand how you're doing it. Is there anything else we can do to prepare?
* Certainly the most important thing, I think, is to pay attention to how are you feeling. Because emotions are what lead to the anxiety, and stress, and depression. Your feelings tell you what this transition means to you.
* And the more you try to explore that inside yourself, the better you can understand what is it that you need in retirement. And again, the better plan you can make. So if we're talking about financial assets, I say think about your time that you're going to have as your most precious asset and where are you going to distribute that.
* And it's important to make sure it's well balanced. The mental aspect is important-- keeping your mind engaged, reading, hobbies. The physical aspect-- staying active. That helps you not just physically but also mentally. And then socially, being engaged, these are really important to getting a really good sense of self-- feeling more confident and lifting your mood as well as your transitioning. People find that if they have that balanced portfolio, I call it sometimes, with their retirement plan, they're able to better adjust and enjoy their retirement.
* Have you seen people do it really well, where you go, yeah, you know what? People should follow the plan that you've done. What have they done that they've done things really, really well?
* Well, what they did really well is when they retired, I found that they were still doing things that related to their profession that they enjoyed. They didn't stop it entirely.
* Like a semi-retirement almost.
* Exactly. And then their retirement went on, and they were actually widowed, and they met somebody, and they were very happy. They didn't expect to start a new life with someone. And meeting somebody actually helped them put away what they were doing shortly after during their early part of their retirement where they completely stopped working because they had someone to live their life with and enjoy their life with.
* So it was really beautiful to see that. Having said that, I really want to also emphasize that there are some people who are struggling quietly and not really sharing how they're doing because they see others are doing really well.
* Yes.
* And so always be conscious that if you see others doing well, know that not everyone always shares. If you're struggling, if you're finding it hard, professional help is helpful not just for a clinical diagnosis but for just somebody who's dealing with an adjustment and they need a space to talk through and figure out how to navigate. And I find retirement is not the end. It's the beginning of a new chapter in one's life.
* Yeah. Yeah. And of course, at the end also, talk to somebody for some psychological help but also financial help. Just talk to people and get your ducks in order.
* Absolutely. Yeah, that's the first order of business, really. Because you may think that you have what you need to retire at 55, but they're the ones that are going to tell you if that's true.
* Yeah. Thank you both. Great conversation.
* Thank you.
[MUSIC PLAYING]