Crafting Your Retirement Mission Statement: A Guide to Purposeful Planning.

You may need a retirement mission statement. Just as a company will draft a mission statement to identify the values that drive their business, your mission statement should outline the values that are important to you. Clearly articulated values can help you identify your purpose and direction in retirement. A good mission statement is typically only about one to three sentences long — but even that could take some serious reflection.

“A retirement mission statement can be a bit like the North Star, in that it provides direction and helps people understand what's possible,” says Nicole Ewing, Principal, Wealth Planning Office, TD Wealth. She says she often encounters people who struggle to articulate their expectations of retirement.

Thinking about your post-work life is often critical, not just to your own well-being but to your finances, too. It’s hard to know if you’re saving enough — or too much — without knowing what you are saving for.

“It is not at all unusual for people to realize that they have significantly more resources than they expected,” Ewing says. Translation: Some Canadians might be able to enjoy more of their wealth now, instead of waiting for the future.

Your retirement mission statement, once written down, can help you articulate and organize your plans and ideas for this next life phase. “It helps to define what you want in retirement and is written proof that you can refer back to if you’re feeling off track,” Ewing says. “Putting it on paper adds an additional level of precision to the statement.”

Where do you want to live? Some place quiet near a lake or close to family?

What do you want to do? Venture on month-long cruises a few times a year, learn guitar, hit the links during the week or give back to the community? Maybe you’ll decide you want to work part time.

While you’re answering those questions, think about what you truly enjoy and whether you could see yourself doing more of it. But also consider what you'd do if things don’t go to plan.

Where would you find health-related assistance if you needed it? Would you move in with family or hire a live-in caregiver?

Here's something else to consider: You may not want to wait until retirement to try out some of these lifestyle changes. Travelling for months on end or taking a multi-year RV trip may sound great right now, but before you invest in a camper, you may want to consider taking shorter ventures to see if it’s actually a lifestyle you enjoy, says Ewing.

Include friends and family in your thought process, as well. “You might want to better understand their goals, too,” she says. “Are your plans tied to theirs?” For instance, if your mission statement highlights the value of time with family and friends, make sure they are not planning to relocate. On a similar note, if you’re considering buying a place in Mexico to be near friends, you might want to confirm they intend to stick around for a few years.

“At the same time, don’t get too anchored in someone else’s vision of the future," says Ewing. "Know whether you need to expand your thinking or consider other possibilities." This applies to your partner, too. As important as it is to have a shared vision as a couple, recognize you may also have different interests.

Once you have a mission statement you like, you can use it to guide your retirement savings plan. “You don’t have to have all the answers today,” notes Ewing. “We just need to understand the overall direction to enable appropriate planning.”

You can start by determining the appropriate cash flow you'll need in retirement and identify potential risks. If, for example, you plan to spend a lot of time outside of Canada in retirement, you may want to structure your portfolio differently to ensure you’re not exposed to any unnecessary taxes if you need to access your funds while you are in another country.

If you’re managing your own portfolio, you'll want to consider the cost of the lifestyle you’re dreaming of. (And don't forget to factor in inflation.) An advisor can help you run the numbers based on your income, spending and investments to see what’s possible. They may even suggest ideas that you hadn't considered, based off those numbers, including the opportunity to buy a recreational property or leave more money to children and charity than you expected.

“Looking at the numbers can really help that conversation along,” Ewing says. “Often, people are surprised by what’s possible. It can spur some excitement and even take away some of that stress.”

As important as it is to think about what you want to do in retirement, it's just as important to understand that those plans can change. An injury or health issue that affects you or a loved one, rising inflation or an unexpected expense are just a few of the situations that could impact your plans.

As you approach retirement, Ewing says it's a good idea to continue checking in with your advisor: “We want to make sure that everything is on track, and if it’s not, how do we get back on course?” Doing this with the added benefit of a robust retirement mission statement can help remind you that you’re in a good place.

“It’s exciting to picture and plan what your future will look like and to feel confident that you know how to get there,” she says. “The joy is that it’s deeply personal, and you can define what it means to you.”