Retirement is just around the corner, and you can’t wait. You imagine yourself enjoy time at home with no more work responsibilities, no more long commute, no more pointless boardroom meetings, and a load of free time to spend any way you’d like. Sounds pretty great, doesn’t it?
It can be. The question is, how much planning have you put into things from here?
The reality of retirement is sometimes much different from the fantasy.
‘Planning’ is one of those words which can strike fear into the heart of just about anyone. It seems tedious to work our budgets and schedules and timelines, especially when you’ve already spent most of your life doing just that. On the other hand, if you don’t spend time planning, you might just make these mistakes:
1. Not Thinking Far Enough Out
If you think you’re not going to live more than a few years anyway, you might be wrong. It used to be the national average put life expectancy in the low 70s. Now, it’s entirely reasonable to live into your 90s. Do you have enough set aside to cover for 20 years instead of 10?
2. Forgetting To Appoint A Power-of-Attorney
No one likes to think they might reach a point where they can’t handle their own finances anymore, but in truth, it generally happens to everyone sooner or later. The key is to make sure whoever starts writing the cheques is trustworthy. This is why you don’t want to leave this detail for the last minute. Figure out someone who doesn’t mind managing things and can juggle multiple responsibilities. This might be a relative, and it might not. Pro tip? If you’re choosing your spouse, be sure to add in a secondary in case you outlive them.
3. Not Deciding Who Will Be Your Medical Proxy
Like power-of-attorney, your medical proxy makes decisions for you, this time of a medical nature. Don’t make the mistake of thinking just because you have a power-of-attorney set up that they can make decisions regarding your healthcare. These are two separate things! Again, you should never put off this particular task as you never know when you might need it, so be sure to make this a priority. Also, you’re going to want a secondary on this document as well, if you’re using your spouse.
4. Not Considering Long-term Care
Speaking of medical things, have you figured out what you’d like to do in regards to long-term care? This is something to explore now, while you’re able. You’re also going to want to let your medical proxy know these plans. Have you considered how to pay for this?
5. Not Finalizing Your Living Will
This is something to discuss with your medical proxy, as this document lets others know what you want in life-threatening situations. This is truly something you want to set up, as it clearly states what your wishes are regarding treatment in these situations.
6. Not Planning What Will Happen After You Die
Have you determined how you want your assets distributed on death? Who do you want to manage this? You’ll need to appoint an executor to hand these details.
7. Not Considering A Scenario Where You Can’t Work
You might have been planning for part-time work after retirement, or to retire at a later age. Health doesn’t always cooperate with these plans. If you’re forced to retire fully, or earlier than expected, are you still covered?
8. Not Planning For Healthcare
Lastly, there are other factors to consider regarding your health. You might not always be able to take care of yourself. Have you laid aside funds to cover for a caregiver, or to move into some kind of assisted care when the time comes? This is definitely something you want to plan for now, as insurance doesn’t always cover the full amount, depending on your policy.
No one likes doing these things, but you’ll feel so much better when you do. After all, then there’s nothing to worry about except the enjoyment of your actual retirement. Why not give yourself the gift of peace of mind as you step into this next phase of your life?
The good news is, any of these mistakes are entirely avoidable. It’s all a matter of thinking these various items through in advance. Preparation and planning go a long way toward giving you peace of mind…and the time to enjoy all those lovely years ahead.
The team at Pension Solutions Canada are here to help make sure you’re set up for success. We specialize in helping individuals prepare for retirement and understand their pension options. Let us assess and review your income streams in retirement and help you with retirement planning. Call us at 1-888-554-6661.
