He told me the highlight of his day was "Happy hour"!
We met at a dental office in Mazatlan, Mexico. He was waiting for his wife and Nancy and I was there to use a coupon we found on the beach for a 180 peso tooth cleaning. ($18 CAD). As we visited he told me that the last couple of years he and his wife have been coming to Mazatlan for a change from the dusty Yuma desert. There's so much more to do near the beach, other than wait for happy hour to begin, and it's much cheaper in Mexico now that the Canadian dollar isn't worth as much in the US.
Retirement can be a very long time, especially if all you have to look forward to each day is "happy hour". Most of us will spend 20-30 years in retirement - that's a lot of happy hours -which are only happy because the drinks are cheap and you finally have someplace to go and something to do.
This leads me to the first key to a successful retirement: Something to do.
You need a reason to get up in the morning and a purpose that fulfills a value within your life. Not just a hobby or a job - a desire, a passion, a fulfillment. Don't retire until you have this figured out!
On this same recent trip to Mazatlan, we also met Henry from Winnipeg. I didn't have to ask him why he was in Mexico for the winter! We met him just after we finished spending our $36 at the Dentist's office. We noticed a sign outside the big yellow church that read, "Free calls to Canada & the US, Tuesday - Friday 9-1pm". Always intrigued by a deal, we decided to go in and inquire. We were greeted by Henry as we walked through the door. As we visited, he told us that he has been coming to Mazatlan for about 11 winters and got involved with this church many years ago. There are so many Canadians coming that they now have an English service each Sunday morning.
Henry volunteers his time a few days a week to meet the local tourist and snowbirds and offers them free calls to the US or Canada. He went on to show us the various projects the church is involved with. Numerous schools for children and a dump ministry where they make meals and bring them to the workers who comb through the city trash for valuables. In fact, they offer an opportunity for anyone to help make sandwiches and go on the bus to the dump and see what they do.
Henry was a well-adjusted retiree who had found a niche where he could continue to use his strengths and abilities in retirement and have a reason to get up each day and be surrounded by like-minded people, which brings us to our second key to retirement success, staying socially connected.
None of us is an island unto ourselves. We are social beings and require a certain amount of social interaction on a regular basis. It isn't the same amount for everyone, but it's a necessity. When you worked a full-time job you had this on a daily basis, from the ride into work, visiting around the coffee room or interactions with other staff. In retirement, you have to make an extra effort to connect socially. With the long winters in Canada, it's easy to coop up in the house and rarely see anyone.
Find a place and people you fit in with and can stay socially connected. Run with a pack of someones. It doesn't matter if that's the Wild Hogs or a weekly bingo gathering. We all need friends. Study after study will show that humans are healthier in a relationship with other humans. Here's a piece from US News on "7 tips for staying socially connected in retirement".
Lastly, you need a worry-free retirement with as much guaranteed lifetime income as possible. Not having to depend on the stock market for your most of your income provides the peace of mind to really enjoy retirement - it's the medicine that will help you sleep better at night. Towers Watson, a large pension administrator reports the findings of a University of Michigan study of more than 26,000 retired Americans. Click here for the full report. The study concluded that retirees with annuitized income reported the highest degree of satisfaction in retirement.
Here's a breakdown of their key findings:
- Retirement satisfaction has steadily declined over the last decade.
- Satisfaction is highest among those with high levels of wealth and income who are very healthy and annuitize their income.
- Among retirees with similar wealth and health characteristics, those with annuitized incomes are happiest.
- Annuities provide the biggest satisfaction boost to retirees with less wealth and those in poor health.
- Despite variations, the satisfaction effects of annuitized income and the general decline in retirement satisfaction are long term and extend across all respondents.
The key to a worry-free retirement is first and foremost, guaranteed lifetime income.
We always say that you need 4 buckets of money in retirement:
- Basic living expenses
- Lifestyle
- Health
- Legacy
It's best to fill the first bucket with guaranteed lifetime income, such as CPP, OAS, Pensions and Lifetime Income Cashable Annuities. You cannot afford to take any risk with this bucket. It's very difficult to find safe investment options that provide enough yield on a risk-free basis. We do have a couple of options (check out this video) that we would like to discuss with you if you have some time to sit down with one of us. Lifestyle expenses are best covered by hybrid investments that provide dividends/income and have growth potential. Health and legacy can be covered by your personal residence, a separate investment account or the most cost-effective strategy - insurance.
It's important in retirement to have a trusted advisor that you can work with for many years to come. 55% of pre-retirees will change advisors when they transition to retirement because they realize they need specialized planning with a focus on income protection.
If you are in or close to retirement and would like to meet with us to discuss your retirement income planning needs, book a time in our calendar for an initial meeting, where we can complete a review of your options and put together a retirement plan for you.
We'll discuss:
1. How long will my money last?
2. How much can I spend each year and still have confidence that I won't run out of money?
3. When should I take CPP and OAS?
4. Which of my assets should I spend first to create tax-efficient income?
5. How much should I be saving now so that I can generate the income I'll want in retirement?
We can help you create a sustainable and predictable cash flow from your portfolio in the most tax-efficient manner to ensure you never have to worry about running out of money.
Click Here to learn more about our Fee-only planning services for those 55+
Willis J Langford BA, MA, CFP
Nancy Langford CRS
Retirement Income & Investment Planners
587-755-0159
