In your 60’s and you might not retire - ever!

I’m fascinated by the likes of the former Mississauga Mayor Hazel McCallion who was into her 90’s when she decided not to run for re-election as well as Betty White who has an outstanding acting career spanning decades and still going strong.

Full retirement isn’t something either of these individuals is contemplating anytime soon. The lesson learned…retirement isn’t a "cookie cutter approach". But there are blueprints.

According to Douglas Nelson there are five phases of retirement. The first phase is typically seven to ten years out where you might start thinking about retirement. You aren’t there yet but you start to think you have fewer working years ahead of you than behind you.

Phase two is often where your net worth is at its all-time high. Withdrawals will start to happen, inflation could be a challenge and market fluctuations take on a whole new meaning.

Phase three is, typically, the golden years of retirement where hopefully you are enjoying all things you dreamt you would be doing in retirement and with luck on your side – you have your health to enjoy it all.

Phase four arrives and illness strikes. Since Nelson is also a Chartered Life Underwriter, he has some interesting recommendations on life insurance, critical illness insurance, long-term care insurance and other forms of protection.

And when Phase five hits, sadly the focus is the death of one partner. One partner is alone again and Nelson deals with estate planning and readying the estate so that the children and other beneficiaries can make a smooth transition of assets after the death of the second parent.

While there are five phases, this could be over a 30 year time horizon and some of us may make it through all five phases, while others never get out of phase one. The order could change as it’s driven by life.

Regardless of where you are or what phase you are in – there are three key financial considerations:

  1. How much you are paying in taxes
  2. The fees associated with managing your portfolio
  3. Inflation.

All can erode your capital during a time in your life where that capital is very hard to replace.