Pattie Lovett-Reid: The 5 ‘Rs’ for living well in retirement
There is a natural tendency for us to want to live well or retire well. This does not have to be an either-or scenario. You can do both.
To get the most out of your golden years, consider these five “Rs” of retirement planning:
1) Reassess. Over the years, people have told me they either love retirement or they hate it. It isn't right or wrong either way: It simply is what it is. About a year and a half into retirement, many people find themselves evaluating their new circumstances.
2) Reward. You have earned the right to retire. For some who have been saving all their lives, it can be hard to make the transition. It is your money, so go ahead and spend it. If you don’t, your heirs will.
3) Reunite. What do many people look forward to in retirement? Spending time with their family. And what do they fear most? Spending time with their family. Develop a plan for how you can spend your days doing what you love to do. Pick up a hobby, give back to the community, or turn a passion into a business. You get the point. This can be a new beginning, so figure out a new path and find something to get excited about.
4) Restructure. People rarely miss the money if they have saved and planned for retirement. What they do miss is the structure, orientation and socialization in their day.
5) Reposition. This is all about adjusting your portfolio to ensure you don't outlive your money. You don't have the luxury of time to make up for lost ground. But that doesn’t mean it’s too late: It’s all about quality. In retirement, wealth preservation trumps wealth accumulation. A classic illustration: Anne Scheiber in 1932 gave her brother $5,000. The money was lost. She was 38 years old. Over the next 12 years, she saved up another $5,000. When she was 50, she invested in blue-chip companies that paid a dividend. Her big winners included the likes of Coca-Cola, PepsiCo, Pfizer, Abbott Labs, Colgate-Palmolive and Schering-Plough, to name a few. She left that money alone until she passed away in 1995. How much money was that all worth? From 1945-95, or after roughly 50 years in the market, Scheiber earned approximately $21 million. She donated the money to Yeshiva University.
If you look up the meaning of “retirement,” you may encounter a definition of “to disappear.” I think it is time to retire the word retirement, and embrace the next third of our lives.
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