Pattie Lovett-Reid

Chief Financial Commentator, CTV

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The best piece of advice I received was sadly at my mother-in-law’s funeral when a woman came up to me and said: "Your golden years are right now."

Regardless of age, enjoy your life. Don't save until it hurts, but don't spend as if there is no tomorrow. In other words: Live well today and save enough to retire well tomorrow. Never compromise one for the other. 

Many of us could spend one-third of our lives in retirement. Like any stage in life, having a plan in place provides a road map. For some, however, it can be so overwhelming trying to figure out your numbers.

This is where an advisor can help. I have a financial planning designation, but that doesn't mean I don't sit down with an advisor to discuss our numbers, our plan, and potential "what-if" scenarios. Sophisticated software programming takes into account rates of return, inflation, longevity and so much more. 

Never underestimate the power of comprehending upside potential and downside risk in your planning assumptions.

Your conversations should include:

• Understanding where your money is coming from including savings, company pension, rental, government, investments, etc.
• Equally important is what you will be spending your money on. Lifestyle drives retirement savings. You need a razor-sharp understanding of what your fixed costs will be. Fixed costs include home, food, utilities, taxes etc. In other words, costs that don't vary and are reoccurring. 

There will always be variables in your planning assumptions such as inflation, your health, longevity, market performance. The list goes on. Wild cards need to be accounted for so I always err on the side of caution and build that into my savings strategy. 

When enough is enough, recognize it. Once you have satisfied your financial retirement needs, you have earned the right to spend your money. So remember to travel first class – your heirs will.