Retirement Sacrifice?

Scott McEachern |

In retirement, most Canadians will have 3 sources of income. The government, their group pension, and what they are able to save themselves. The problem is, many expect that the government and their pension will support them at their desired lifestyle. What we know, however, is that plans change.

Government Changes

In the past, changes were made to qualifying ages for Canada Pension Plan, then were reversed. We may not be so lucky next time. As well, very few retirees are familiar with survivor benefits of these plans until a spouse dies, then they may be upset because the government continues to pay them an amount that was dictated by the plan itself, not by the needs of the survivor.

Pension changes

Most group pensions of the future will not be like those that are here today. Due to people living longer, lower interest rates and inflation, most plans may be unsustainable. Keep in mind, if you retire due to health reasons before your actual retirement date, there may be limitations to the amount you receive.

So how can you avoid the limitations of those plans?

Rely on yourself!

Start setting aside some money today that is geared to bulk up what the government and your group plan are doing for you. Sure, you may have to make a sacrifice or two along the way, but an 80 inch TV won’t put food on the table when you’re 80 (even though you’ll be able to follow the hockey puck easier!)

We often think of the “Latte Factor” when cutting back – instead of buying a $5 beverage each day, invest that money. If coffee is your thing – find something else to cut back. Small changes now can have a huge impact down the road.

Your parents, your children, nor anyone else should not be expected to step in because you failed to plan for your own retirement. Besides that, many inheritances may miss a generation or still be required by older parents who are perhaps in better health than their children. Let’s work together to discuss your retirement goals and put together a plan to ensure you reach them!