(NC)-Typically, people in their twenties are saving for a vacation trip or paying off their student loans. Those in their thirties are shopping for their first home and buying new cars, and the forties generation are saving for their children's university education or eyeing a family cottage.
The reality is that those with decades before retirement often think about financial goals that are closer at hand. They have difficulty visualizing what life will be like when they don't have to go to work every day.
"Many have no idea how they are going to spend their retirement," says Patricia Lovett-Reid, a senior vice president with TD Waterhouse Canada Inc. "While they may be putting money away in an RRSP, they haven't considered whether they will continue to work, where they will live or what their expenses will be."
Lovett-Reid says that the difficulty in visualizing their 'golden years' leaves many investors without a proper plan to save and invest for retirement. However, by considering some key factors, investors can more easily develop a retirement plan that fits with their current lifestyle and budget.
1. Will you continue to work?
Some people decide to continue working for the added income, to take on new challenges or simply to remain active and involved. By thinking ahead about what your own needs and aspirations will be when you reach retirement age, you can begin to answer this key question.
2. Where will you choose to live?
If you're considering selling your current home, think about where and when you might want to move. Family relationships, the location of friends, the appeal of a warmer climate, or access to good health care services and medical expenses' coverage could all be considerations in your choice.
3. What are your ongoing family responsibilities?
Even in retirement, you may still have children or parents who count on you for support. Insurance strategies and estate planning can be effective ways to manage these responsibilities.
4. What activities do you want to pursue?
People are living longer and leading increasingly active lives. You may want to take up new hobbies, travel, volunteer or continue your education.
"Lifestyle choices and ongoing responsibilities are huge factors in planning for your retirement," concludes Lovett-Reid. "It's very important to talk to a financial advisor who can help align your financial assets with your dreams and create a plan."
- News Canada