Retirement Tips

Four things you can learn from people who have retired successfully:

The quality of your life is shaped by the quality of the people in your life.
First on his list is the importance of people’s social network. In his experience, the happiest retirees are active and have many positive people in their lives, some older, some younger and some the same age.

Wealth comes from choices, not chances
Having said that money is not the be-all and end-all in determining retirement happiness, people still need enough money to enjoy retirement. Depending on the kind of retirement lifestyle one aspires to, that amount can be relatively modest or quite substantial, especially if they plan to travel, spend winters down south and eat out often.

Smart people don’t wait for luck to make them wealthy. Successful investing means being thoughtful about making good choices, one choice at a time. Live below your means if you want to be wealthy. Watch out for a lifestyle that saddles you with expenses. Stay broadly diversified. And when you save and invest, make your money work hard for you.

People who are serious write down their retirement goals. Putting plans in writing lets you identify where you are, where you want to go and what you must do to get there.

Control your emotions
What really works in the long term is often in direct contradiction to people’s immediate emotional impulses. When it comes to sex, food and money, emotions are our biggest enemy. We start off with good intentions and then get lured away by quick fixes and easy solutions.

A classic example of the quick fix mindset is the surprising number of Canadians who in response to surveys list winning a lottery as part of their retirement planning strategy.

Don’t wait to start
A final message relates to starting to save early. Smart people learn early in life to defer gratification and make saving a priority. If you’re in your 20s, retirement seems pretty remote, but time gives you an opportunity to get a lot for a little.

Example: A one-time investment of $5,000 when you’re 25 will grow (at 10 per cent annually) to more than $140,000 at age 60. If you wait until you’re 45, you need to invest more than $30,000 to get the same result.

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