With the abolition of mandatory retirement in Canada, when you opt to actually leave the world of paid work for good is your own decision. There are financial milestones that may influence you  such as when you think you have saved enough to support yourself in retirement, but when you are ready to let go is also dependent on many more intangible factors.

After all, you not only need to retire from your job or your encore career, but you have must have something to retire to. For example, in the last several years I have joined a choir, been elected to the choir board and started taking classes at the Life Learning Institute at Ryerson in Toronto. Yet I’m still not quite prepared to give up my part-time business as a personal finance writer.

I was reminded of this conundrum reading a personal column by David Sheffield in the Globe and Mail recently. He wrote, “Turning to the wise oracle of our time, Google, I search: When do you know that it is time to retire? Most answers are financially focused: ‘When you have saved 25 times your anticipated annual expenditures.’ One site tackles how to be emotionally ready to quit work: ‘The ideal time to retire is when the unfinished business in your life begins to feel more important than the work you are doing.’”

The changing face of retirement by Julie Cazzin appeared in Macleans. She cites a 2014 survey by Philip Cross at the Fraser Institute. Based on the study, Cross believes Canadians are actually financially—and psychologically—preparing themselves to retire successfully, regardless of their vision of retirement.

“The perception that they are not doing so is encouraged by two common errors by analysts,” notes Cross. “The first is a failure to take proper account of the large amounts of saving being done by government and firms for future pensions …. And the second is an exclusive focus on the traditional ‘three pillars’ of the pension system, which include Old Age Security (OAS), the Canada and Quebec Pension plans (CPP/QPP), and voluntary pensions like RRSPs.”

He notes that the research frequently does not take into account the trillions of dollars of assets people hold outside of formal pension vehicles, most notably in home equity and non-taxable accounts. Also, he says the literature on the economics of retirement does not acknowledge the largely undocumented network of family and friends that lend physical, emotional and financial support to retirees.

Retire Happy’s Jim Yih addresses the question How do you know when it is the right time to retire?  After being in the retirement planning field for over 25 years, Yih believes sometimes readiness has more to do with instinct, feelings and lifestyle than with money. “I’ve seen people with good pensions and people who have saved a lot of money but are not really ready to retire.  Sometimes it’s because they love their jobs,” he says. “Others hate their jobs but don’t have a life to retire to.  Some people are on the fence.  They are ready to retire but worry about being bored or missing their friends from work.”

If you are still struggling with how to finance your retirement, take a look at Morneau Shepell partner Fred Vettese’s article in the March/April issue of Plans & Trusts. Vettese reports that few people are aware it can be financially advantageous to delay the start of CPP benefits. In fact, less than 1% of all workers wait until the age of 70 to start their CPP pension. However, doing so can increase its value by a guaranteed 8.4% a year, or 42% in total. And by deferring CPP, he notes that workers can transfer investment risk and longevity risk to the government.

Tim Stobbs, the long-time author of Canadian Dream Free at 45 attained financial independence and left his corporate position several months ago. In a recent blog he discusses how his focus has shifted from growing his net worth to managing his cash flow. His goal is to leave his capital untouched and live on dividend, interest and small business income from his wife’s home daycare. He explains how he simulates a pay cheque by setting up auto transfers twice a month to the main chequing account from his high interest savings account.

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Written by Sheryl Smolkin
	Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

By Sheryl Smolkin

And before you know it it’s almost the middle of August. I haven’t seen any coloured leaves drifting down…yet. But already the days are getting shorter. This week we feature interesting blogs from top bloggers who kept on writing even when many of us were on vacation.

In GetSmarterAboutMoney.ca, Caroline Cakebread shares 5 ways to tap your home for cash in retirement. They are: sell and rent; sell and downsize; become a landlord; rent out your home  temporarily; and, get a reverse mortgage.

If you are in your 50s and starting to get really serious about planning your retirement, take a look at Rich at any age: In your 50s by David Aston, Romana King and Julie Cazzin on MoneySense. They suggest that you get a ballpark figure of what you will need; max out your savings; and then, pick the right moment.

Are you still agonizing over whether it makes more sense to save in an RRSP or a TFSA? Then take a look at RRSP Myth – Retirement Income Has To Be Lower For RRSP Benefit by Mike Holman on MoneySmart. He gives interesting examples to illustrate that even where income in retirement is a bit higher than in the earning years, RRSPs will likely still save you some taxes or at worst – won’t save you any tax, but won’t cost you anything either.

Mr. CBB gives advice to a couple with $5,000/month of discretionary income on Canadian Budget Binder about buying their first home. He says they should talk to a financial advisor about retirement savings and life insurance; figure out the size of mortgage they can afford on one income; factor in home maintenance costs before they buy; and understand how to be prepared for emergencies.

Dan Bortolotti writes on Canadian Couch Potato about Calculating Your Portfolio’s Rate of Return. Rate of return calculations fall into two general categories: time-weighted and money-weighted. If a portfolio has no cash flows (that is, the investor makes no contributions and no withdrawals), both methods produce identical figures. He says the key point to understand, therefore, is that any differences in reported returns come about as a result of cash inflows and outflows.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.