Jan 2: What are the most important retirement decisions you can make?
January 2, 2025
Decades ago, a colleague – during a chat about retirement – told us that her in-laws felt that the best retirement decision they ever made was to leave work as soon as they could, at age 55.
They had enjoyed a very long retirement and did all the things they wanted to – and they looked back at it all fondly now that they were in their 80s.
Save with SPP decided to look around to see what other people think are the best, or most important, retirement decisions they can make.
The Motley Fool blog offers up a few key decisions.
One is to “make retirement a priority,” because “the sooner you decide to make retirement a priority, the more time `the force’ (the power of compounding) will work in your favour,” the blog tells us.
Another decision is to “explore your core pursuits,” the blog advises. “The happiest retirees report entering retirement with an average of 3.61 `core pursuits.’ Unhappy retirees have less than two,” the blog notes.
A related idea is to set retirement goals, the blog states.
“Something as simple as writing down three goals for your first year in retirement can work wonders in giving your time structure, purpose, and meaning. Of course, these goals will change over time — the important thing is devoting time to exploring them and following through,” the blog concludes.
The folks at Forbes offer up a few more.
Your health, the publication suggests, should be a top consideration.
“`Good health’ is the factor often cited by retirees as a top reason for happiness in retirement,” the publication notes. “As you’re considering the `when to retire’ question, you’ll want to find a way to balance your health goals with your financial goals, since money worries can be a significant cause of stress, which can in turn negatively affect your health. This can be another reason to consider working part time for a while—you’ll get more time to achieve your health goals while also improving your finances.”
The publication also suggests that delaying your retirement date may qualify you for larger retirement benefits.
Finally, the Kiplinger team brings up some important decisions on retirement you don’t want to get wrong.
Don’t “relocate on a whim,” the article advises. “Too many folks have trudged off willy-nilly to what they thought was a dream destination only to find that it’s more akin to a nightmare,” the article adds. Consider renting in your new, desired location before you decide to buy there, the article adds.
Don’t “not plan” to retire. Huh? Kiplinger says that 55 per cent of U.S. workers plan to work “after they retire,” meaning, essentially, continuing to work indefinitely. “That plan could backfire,” warns Kiplinger.
Changes in your health, or that of a spouse, could mean you’ll be retired before you planned to be. “Assume the worst and save early and often. Only 34 per cent of baby boomers surveyed by Transamerica have a backup plan to replace retirement income if unable to continue working,” the article adds.
Finally, Kiplinger cites “putting off saving for retirement” as a related, bad decision. Surveys found this was the biggest regret amongst U.S. boomers.
“The good news for investors (in their 40s and 50s) is that they may still have enough time to change their savings behavior and achieve their goals, but they will need to take action quickly and be extremely disciplined about their savings,” states Ajay Kaisth of KAI Advisors in New Jersey in the Kiplinger article.
If there is a single takeaway from all this, it’s the idea of planning. You will almost certainly reach a point in life when you are no longer working or able to work. If you thought about this long ago and saved, or joined a retirement program at work, you will have more options than if you didn’t.
If you don’t have a workplace pension plan or retirement program, the Saskatchewan Pension Plan may be just the ticket for you. SPP is open to any Canadian with available RRSP room. You make tax-deductible contributions to SPP at any rate you wish – and you can transfer funds into SPP from other RRSPs. Once your savings are entrusted to SPP, we will invest them in a low-cost, professionally managed pooled fund. At retirement, your choices include income for life via an SPP annuity, or the more flexible Variable Benefit.
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Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.
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