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You may be interested in this helpful video from MoneyTalk, published on July 25, 2023, which discusses how to prepare for a happy retirement. You may also be thinking about your current financial goals and possible next steps, so please book an appointment with a TD advisor to discuss them.
Stepping into retirement: Preparing for the big transition
For many people, a happy retirement where you’re able to do the things you want to do is the ultimate life goal. But the transition from a successful career to this stage in life isn’t always easy. Dr. Saunia Ahmad, Clinical Psychologist, Toronto Psychology Clinic and Georgia Swan, Tax and Estate Planner, TD Wealth, join Kim Parlee to talk about ways you can prepare both emotionally and financially.
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Transcript
WEBVTT
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For many people, a happy
retirement where you're
00:00:05.710 --> 00:00:10.180 align:middle line:84%
able to do all the things that you
want to do is the ultimate life goal.
00:00:10.180 --> 00:00:13.810 align:middle line:84%
But all that excitement and anticipation
could come with just a titch of anxiety
00:00:13.810 --> 00:00:16.210 align:middle line:84%
and, in some cases,
hesitation, because, let's
00:00:16.210 --> 00:00:19.553 align:middle line:90%
face it-- retirement is a big life change.
00:00:19.553 --> 00:00:22.720 align:middle line:84%
You don't really know how you're going
to fare and how you're going to feel.
00:00:22.720 --> 00:00:26.860 align:middle line:84%
And you may not know exactly what steps you
need to take to make truly the most of it.
00:00:26.860 --> 00:00:29.140 align:middle line:90%
Here's Karl's story.
00:00:29.140 --> 00:00:32.740 align:middle line:84%
One of the things that makes
people hesitate to retire
00:00:32.740 --> 00:00:36.010 align:middle line:84%
is not having a clear path or
moving from salary to savings.
00:00:36.010 --> 00:00:39.200 align:middle line:90%
00:00:39.200 --> 00:00:43.490 align:middle line:84%
There was a point in my corporate journey
that I knew I was ready for retirement.
00:00:43.490 --> 00:00:47.640 align:middle line:84%
You do get to the point where you want
to start doing something different.
00:00:47.640 --> 00:00:51.350 align:middle line:84%
So you start thinking
what that next step is.
00:00:51.350 --> 00:00:54.200 align:middle line:90%
What I envisioned for my retirement--
00:00:54.200 --> 00:00:57.050 align:middle line:84%
spend time with family,
spend more time golfing,
00:00:57.050 --> 00:01:00.740 align:middle line:84%
and also spending some
time using my experience
00:01:00.740 --> 00:01:04.129 align:middle line:90%
to help give back to the community somehow.
00:01:04.129 --> 00:01:09.840 align:middle line:84%
You have your dream, but you don't always
see the clear path in how you realize that.
00:01:09.840 --> 00:01:14.090 align:middle line:84%
Joining me now to talk about how people can
prepare for that transition to retirement,
00:01:14.090 --> 00:01:18.050 align:middle line:84%
both emotionally, and think about how to
be financially secure once they get there,
00:01:18.050 --> 00:01:21.920 align:middle line:84%
and see their dreams come true, and
come to fruition is Dr. Saunia Ahmad.
00:01:21.920 --> 00:01:24.590 align:middle line:84%
She's a clinical psychologist at
the Toronto Psychology Clinic,
00:01:24.590 --> 00:01:27.740 align:middle line:84%
and Georgia Swan, Tax and
Estate Planner at TD Wealth.
00:01:27.740 --> 00:01:29.510 align:middle line:90%
It is lovely to have you both here.
00:01:29.510 --> 00:01:30.470 align:middle line:90%
Thank you.
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Let's start with
retirement-- big mental shift.
00:01:33.830 --> 00:01:36.000 align:middle line:84%
Most people I know are
pretty giddy, quite frankly,
00:01:36.000 --> 00:01:39.300 align:middle line:84%
to think about getting towards retirement--
maybe that's the people I'm around.
00:01:39.300 --> 00:01:44.520 align:middle line:84%
But there is a change of velocity
of going non-stop to stopping.
00:01:44.520 --> 00:01:48.690 align:middle line:84%
What's been your experience of people
going from that change, plus also
00:01:48.690 --> 00:01:52.350 align:middle line:84%
the experience of maybe they don't
have an income in the same way anymore?
00:01:52.350 --> 00:01:55.440 align:middle line:84%
They don't have the ability to generate
income in the same way anymore.
00:01:55.440 --> 00:01:57.858 align:middle line:90%
As you said, retirement is a change.
00:01:57.858 --> 00:01:59.400 align:middle line:90%
What we're talking about is a change.
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And when people are dealing with change,
it's natural to feel some level of stress,
00:02:04.320 --> 00:02:09.000 align:middle line:84%
and uncertainty, anxiety because
they're going from working and doing
00:02:09.000 --> 00:02:12.960 align:middle line:84%
things that gave them self-validation,
self-worth, and a structure
00:02:12.960 --> 00:02:15.160 align:middle line:90%
and a routine to god knows what.
00:02:15.160 --> 00:02:18.210 align:middle line:84%
So there's some excitement,
for sure, because all of a sudden
00:02:18.210 --> 00:02:20.190 align:middle line:90%
there's going to be freedom and more time.
00:02:20.190 --> 00:02:22.110 align:middle line:90%
But there's also a lot of nervousness.
00:02:22.110 --> 00:02:25.920 align:middle line:84%
And what my clients have often told
me, what they found is most helpful
00:02:25.920 --> 00:02:27.270 align:middle line:90%
is having a plan--
00:02:27.270 --> 00:02:30.780 align:middle line:84%
planning ahead for this phase
of their life and making sure
00:02:30.780 --> 00:02:36.030 align:middle line:84%
the plan is balanced with aspects of their
mental, physical, and social well-being
00:02:36.030 --> 00:02:38.610 align:middle line:84%
being addressed because those
are the things that they end up
00:02:38.610 --> 00:02:42.780 align:middle line:84%
losing when they're not working and
need to recreate that, as you said,
00:02:42.780 --> 00:02:44.260 align:middle line:90%
in this new phase of their life.
00:02:44.260 --> 00:02:47.412 align:middle line:84%
Do you think people always
understand how to get to the things
00:02:47.412 --> 00:02:48.870 align:middle line:90%
that they want to do in retirement?
00:02:48.870 --> 00:02:51.510 align:middle line:84%
They have this idea that, oh,
I want to do all these things.
00:02:51.510 --> 00:02:53.010 align:middle line:90%
They may not have a path towards it.
00:02:53.010 --> 00:02:54.362 align:middle line:90%
Maybe that creates some anxiety.
00:02:54.362 --> 00:02:55.320 align:middle line:90%
Have you heard of that?
00:02:55.320 --> 00:02:56.010 align:middle line:90%
Certainly.
00:02:56.010 --> 00:02:58.093 align:middle line:84%
They don't really know
what it's going to be like.
00:02:58.093 --> 00:03:00.570 align:middle line:84%
They try to figure it out
in advance and are worried
00:03:00.570 --> 00:03:03.720 align:middle line:84%
that they need to have a plan
that's going to absolutely work.
00:03:03.720 --> 00:03:07.170 align:middle line:84%
But what I tell them is that,
often, you're planning ahead,
00:03:07.170 --> 00:03:09.600 align:middle line:84%
but know that your plan
will evolve afterwards.
00:03:09.600 --> 00:03:13.480 align:middle line:84%
Most people they say when they
retired, they were happy shortly after.
00:03:13.480 --> 00:03:18.150 align:middle line:84%
But then there was a time where they start to
feel some feelings of listlessness, boredom,
00:03:18.150 --> 00:03:23.160 align:middle line:84%
loneliness for a while before they
found their sort of new ground
00:03:23.160 --> 00:03:27.630 align:middle line:84%
and new sort of structure and routine
that gave them a sense of fulfillment.
00:03:27.630 --> 00:03:28.950 align:middle line:90%
So it is an adjustment.
00:03:28.950 --> 00:03:30.750 align:middle line:90%
And it can be done well.
00:03:30.750 --> 00:03:33.602 align:middle line:84%
And it's OK to feel some
anxiety and worry, but know
00:03:33.602 --> 00:03:36.810 align:middle line:84%
that if you reach out and speak to others
who are also dealing with the same,
00:03:36.810 --> 00:03:39.120 align:middle line:84%
it can be very helpful and
a very fruitful adjustment.
00:03:39.120 --> 00:03:39.390 align:middle line:90%
Yeah.
00:03:39.390 --> 00:03:39.990 align:middle line:90%
Yeah.
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I know that the financial preparation
causes all sorts of anxiety for people.
00:03:46.740 --> 00:03:50.910 align:middle line:84%
So how do you, I guess, start to alleviate
that anxiety and get ready for it?
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Well, really, the first step,
I think, is planning early
00:03:54.210 --> 00:03:57.540 align:middle line:84%
because you can't manage your
mental health during that time
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if your financial health is not in place.
00:03:59.920 --> 00:04:03.300 align:middle line:84%
So you should be thinking about
what's the timing of your retirement.
00:04:03.300 --> 00:04:04.530 align:middle line:90%
Are you five years away?
00:04:04.530 --> 00:04:05.890 align:middle line:90%
Are you 10 years away?
00:04:05.890 --> 00:04:10.170 align:middle line:84%
Now, certainly, in the best of my world,
I would say start planning for retirement
00:04:10.170 --> 00:04:12.060 align:middle line:90%
the first day that you start working.
00:04:12.060 --> 00:04:17.740 align:middle line:84%
But depending on how far out you are, that's
going to depend on how much money you have.
00:04:17.740 --> 00:04:19.200 align:middle line:90%
And then, certainly, budget--
00:04:19.200 --> 00:04:22.050 align:middle line:84%
what is it that you're thinking
of doing in retirement?
00:04:22.050 --> 00:04:26.610 align:middle line:90%
And what's that going to cost you?
00:04:26.610 --> 00:04:31.320 align:middle line:84%
There's a lot out there that
says you should plan for about 70%
00:04:31.320 --> 00:04:36.120 align:middle line:84%
of your working income as being what
you need to support your retirement.
00:04:36.120 --> 00:04:40.500 align:middle line:84%
But people may find that might be more
than they need or sometimes even less,
00:04:40.500 --> 00:04:43.680 align:middle line:84%
especially if you have those big
plans that all of a sudden you're
00:04:43.680 --> 00:04:45.880 align:middle line:90%
going to do in the first couple of years.
00:04:45.880 --> 00:04:49.410 align:middle line:84%
So the other thing that
financial planning is important,
00:04:49.410 --> 00:04:52.740 align:middle line:84%
not just how much are you
going to spend, how are you
00:04:52.740 --> 00:04:55.050 align:middle line:90%
going to make any money in retirement?
00:04:55.050 --> 00:05:01.260 align:middle line:84%
So how are your investments and savings
going to support your retirement life?
00:05:01.260 --> 00:05:03.520 align:middle line:90%
Where else might you be getting income?
00:05:03.520 --> 00:05:06.210 align:middle line:90%
So do you have a pension?
00:05:06.210 --> 00:05:09.000 align:middle line:90%
CPP and OAS, of course.
00:05:09.000 --> 00:05:13.290 align:middle line:84%
But the one thing that I don't like to
see, sometimes I have clients that are,
00:05:13.290 --> 00:05:17.220 align:middle line:84%
well, my retirement plan is I'm going
to inherit money from my parents.
00:05:17.220 --> 00:05:22.140 align:middle line:84%
Bad retirement plan, because you never
know where that's going to take you.
00:05:22.140 --> 00:05:25.290 align:middle line:84%
So working with a good
financial planner is important
00:05:25.290 --> 00:05:29.520 align:middle line:84%
because there's so much more even to
this section that I could talk about.
00:05:29.520 --> 00:05:33.930 align:middle line:84%
But really, they can help you articulate
the questions that maybe you didn't even
00:05:33.930 --> 00:05:35.250 align:middle line:90%
know you had to ask.
00:05:35.250 --> 00:05:38.340 align:middle line:84%
And I even think about now,
longevity-- people are living longer.
00:05:38.340 --> 00:05:40.382 align:middle line:84%
And then you have to think
about you're not going
00:05:40.382 --> 00:05:44.520 align:middle line:84%
to be taking worldwide trips every
year until the inevitable happens.
00:05:44.520 --> 00:05:45.520 align:middle line:90%
It happens to all of us.
00:05:45.520 --> 00:05:48.690 align:middle line:84%
You've got your active years of retirement,
your less active years of retirement.
00:05:48.690 --> 00:05:50.220 align:middle line:90%
What about doing an estate plan?
00:05:50.220 --> 00:05:52.590 align:middle line:84%
Does that help relieve
the anxiety a little bit
00:05:52.590 --> 00:05:54.870 align:middle line:84%
in terms of helping at
least that part of things?
00:05:54.870 --> 00:05:56.080 align:middle line:90%
Well, definitely.
00:05:56.080 --> 00:05:58.590 align:middle line:84%
We've talked today about
managing your mental health.
00:05:58.590 --> 00:06:01.140 align:middle line:84%
We always talk about managing
your physical health.
00:06:01.140 --> 00:06:03.640 align:middle line:90%
This is part of managing your legal health--
00:06:03.640 --> 00:06:07.830 align:middle line:84%
making sure the documents that are
in place so that if anything happens,
00:06:07.830 --> 00:06:11.580 align:middle line:84%
the transition of the management
of your assets is seamless.
00:06:11.580 --> 00:06:15.900 align:middle line:84%
So if there is an incapacity, that you
have powers of attorney for property
00:06:15.900 --> 00:06:19.260 align:middle line:84%
and personal care in place and the
people that you've put in place
00:06:19.260 --> 00:06:22.620 align:middle line:84%
are trusted people that you
know will manage your assets.
00:06:22.620 --> 00:06:26.430 align:middle line:84%
And then, of course, planning for
the inevitable when you pass away--
00:06:26.430 --> 00:06:30.000 align:middle line:84%
again, when you have that good
plan in place, your assets
00:06:30.000 --> 00:06:31.690 align:middle line:90%
are going to transition properly.
00:06:31.690 --> 00:06:36.360 align:middle line:84%
And that's a huge weight that can
often be lifted off people's shoulders
00:06:36.360 --> 00:06:39.730 align:middle line:90%
because they say, no, I have things in place.
00:06:39.730 --> 00:06:41.950 align:middle line:90%
Things are going to happen well.
00:06:41.950 --> 00:06:45.810 align:middle line:84%
So that's another huge element of
it from a financial and, I guess,
00:06:45.810 --> 00:06:47.012 align:middle line:90%
legal perspective too.
00:06:47.012 --> 00:06:49.470 align:middle line:84%
So estate planning helps
relieve the anxiety a little bit
00:06:49.470 --> 00:06:51.510 align:middle line:90%
in terms of just planning ahead.
00:06:51.510 --> 00:06:55.038 align:middle line:84%
And you also mentioned, I think, maybe
having the mindset to know that you're
00:06:55.038 --> 00:06:56.580 align:middle line:90%
going to know more once you're in it.
00:06:56.580 --> 00:06:59.787 align:middle line:84%
And anxiety may be part of it, just
to understand how you're doing it.
00:06:59.787 --> 00:07:01.620 align:middle line:90%
Is there anything else we can do to prepare?
00:07:01.620 --> 00:07:04.720 align:middle line:84%
Certainly the most
important thing, I think,
00:07:04.720 --> 00:07:07.650 align:middle line:90%
is to pay attention to how are you feeling.
00:07:07.650 --> 00:07:11.910 align:middle line:84%
Because emotions are what lead to the
anxiety, and stress, and depression.
00:07:11.910 --> 00:07:15.240 align:middle line:84%
Your feelings tell you what
this transition means to you.
00:07:15.240 --> 00:07:20.730 align:middle line:84%
And the more you try to explore that inside
yourself, the better you can understand
00:07:20.730 --> 00:07:22.540 align:middle line:90%
what is it that you need in retirement.
00:07:22.540 --> 00:07:24.340 align:middle line:90%
And again, the better plan you can make.
00:07:24.340 --> 00:07:28.290 align:middle line:84%
So if we're talking about financial
assets, I say think about your time
00:07:28.290 --> 00:07:30.578 align:middle line:84%
that you're going to have
as your most precious asset
00:07:30.578 --> 00:07:32.370 align:middle line:90%
and where are you going to distribute that.
00:07:32.370 --> 00:07:36.240 align:middle line:84%
And it's important to make
sure it's well balanced.
00:07:36.240 --> 00:07:40.410 align:middle line:84%
The mental aspect is important-- keeping
your mind engaged, reading, hobbies.
00:07:40.410 --> 00:07:42.372 align:middle line:90%
The physical aspect-- staying active.
00:07:42.372 --> 00:07:44.580 align:middle line:84%
That helps you not just
physically but also mentally.
00:07:44.580 --> 00:07:47.370 align:middle line:84%
And then socially, being
engaged, these are really
00:07:47.370 --> 00:07:52.860 align:middle line:84%
important to getting a
really good sense of self--
00:07:52.860 --> 00:07:58.230 align:middle line:84%
feeling more confident and lifting your
mood as well as your transitioning.
00:07:58.230 --> 00:08:00.750 align:middle line:84%
People find that if they
have that balanced portfolio,
00:08:00.750 --> 00:08:02.880 align:middle line:84%
I call it sometimes, with
their retirement plan,
00:08:02.880 --> 00:08:05.893 align:middle line:84%
they're able to better adjust
and enjoy their retirement.
00:08:05.893 --> 00:08:09.060 align:middle line:84%
Have you seen people do it really
well, where you go, yeah, you know what?
00:08:09.060 --> 00:08:11.512 align:middle line:84%
People should follow the
plan that you've done.
00:08:11.512 --> 00:08:14.220 align:middle line:84%
What have they done that they've
done things really, really well?
00:08:14.220 --> 00:08:16.687 align:middle line:84%
Well, what they did really
well is when they retired,
00:08:16.687 --> 00:08:19.770 align:middle line:84%
I found that they were still doing
things that related to their profession
00:08:19.770 --> 00:08:20.640 align:middle line:90%
that they enjoyed.
00:08:20.640 --> 00:08:22.037 align:middle line:90%
They didn't stop it entirely.
00:08:22.037 --> 00:08:23.370 align:middle line:90%
Like a semi-retirement almost.
00:08:23.370 --> 00:08:23.910 align:middle line:90%
Exactly.
00:08:23.910 --> 00:08:27.840 align:middle line:84%
And then their retirement went on,
and they were actually widowed,
00:08:27.840 --> 00:08:31.930 align:middle line:84%
and they met somebody,
and they were very happy.
00:08:31.930 --> 00:08:35.070 align:middle line:84%
They didn't expect to start
a new life with someone.
00:08:35.070 --> 00:08:37.909 align:middle line:84%
And meeting somebody
actually helped them put away
00:08:37.909 --> 00:08:41.159 align:middle line:84%
what they were doing shortly after during
their early part of their retirement
00:08:41.159 --> 00:08:44.370 align:middle line:84%
where they completely stopped working
because they had someone to live
00:08:44.370 --> 00:08:46.560 align:middle line:90%
their life with and enjoy their life with.
00:08:46.560 --> 00:08:48.880 align:middle line:90%
So it was really beautiful to see that.
00:08:48.880 --> 00:08:53.190 align:middle line:84%
Having said that, I really
want to also emphasize
00:08:53.190 --> 00:08:56.318 align:middle line:84%
that there are some people who
are struggling quietly and not
00:08:56.318 --> 00:08:59.610 align:middle line:84%
really sharing how they're doing because
they see others are doing really well.
00:08:59.610 --> 00:09:00.110 align:middle line:90%
Yes.
00:09:00.110 --> 00:09:02.850 align:middle line:84%
And so always be conscious that
if you see others doing well,
00:09:02.850 --> 00:09:04.590 align:middle line:90%
know that not everyone always shares.
00:09:04.590 --> 00:09:08.157 align:middle line:84%
If you're struggling, if
you're finding it hard,
00:09:08.157 --> 00:09:10.740 align:middle line:84%
professional help is helpful not
just for a clinical diagnosis
00:09:10.740 --> 00:09:12.990 align:middle line:84%
but for just somebody who's
dealing with an adjustment
00:09:12.990 --> 00:09:17.290 align:middle line:84%
and they need a space to talk through
and figure out how to navigate.
00:09:17.290 --> 00:09:19.510 align:middle line:90%
And I find retirement is not the end.
00:09:19.510 --> 00:09:21.670 align:middle line:84%
It's the beginning of a
new chapter in one's life.
00:09:21.670 --> 00:09:22.170 align:middle line:90%
Yeah.
00:09:22.170 --> 00:09:22.670 align:middle line:90%
Yeah.
00:09:22.670 --> 00:09:25.523 align:middle line:84%
And of course, at the end
also, talk to somebody
00:09:25.523 --> 00:09:27.690 align:middle line:84%
for some psychological help
but also financial help.
00:09:27.690 --> 00:09:30.030 align:middle line:84%
Just talk to people and
get your ducks in order.
00:09:30.030 --> 00:09:30.780 align:middle line:90%
Absolutely.
00:09:30.780 --> 00:09:34.170 align:middle line:84%
Yeah, that's the first
order of business, really.
00:09:34.170 --> 00:09:38.700 align:middle line:84%
Because you may think that you
have what you need to retire at 55,
00:09:38.700 --> 00:09:41.610 align:middle line:84%
but they're the ones that are
going to tell you if that's true.
00:09:41.610 --> 00:09:42.210 align:middle line:90%
Yeah.
00:09:42.210 --> 00:09:43.050 align:middle line:90%
Thank you both.
00:09:43.050 --> 00:09:44.200 align:middle line:90%
Great conversation.
00:09:44.200 --> 00:09:46.980 align:middle line:90%
Thank you.
00:09:46.980 --> 00:09:49.430 align:middle line:90%
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