Retirement needs a new Definition

By Ryan Donovan

Special to Financial Independence Hub

Before we dive into this article, let’s play a quick game: a word association game. I’ll bet you a crisp $5 bill, or a shiny loonie for the more risk averse out there, that with three chances, I can guess the first word that pops into your head. Now, it has to be the first word, so no cheating. Ready, set… the word is ‘Retirement.’

If you said ‘Retirement Income,’ ‘Retirement Savings’ or ‘Retirement Home,’ I’ll come to collect my winnings. If you said anything like ‘Travel,’ ‘Hobbies’ or ‘Exploration,  then good on you; I’ll send along an IOU.

The reason I felt so confident taking that bet is because when I tell people that I work in retirement planning, 99 out of 100 times, they assume that I work in financial services. The other time, people ask about senior living. Retirement has become so synonymous with financial planning, and so associated with ‘old age,’ that they’re practically inseparable. Yet, in reality, retirement is a stage of life, not a date on the calendar, an amount in your bank account, and is certainly not a death sentence.

One of our primary goals when creating our startup, RetireMint, was to reframe the national conversation around “what it means to retire,” which, at its core, requires redefining how Canadians prepare for retirement.

Now, I am not discounting the importance and necessity of a sound financial plan. After all, you are reading this in Financial Independence Hub … Yes, financial planning is the keystone of retirement preparation, as you won’t even be able to flirt with the idea of retiring without it. Yet, retirement planning must adopt a much wider definition and break free from the tethered association of solely financial planning.

Retirement should really be a time to enjoy the fruits of your hard labour:  a chapter that will hopefully span decades, fuelled by leisure, exploration, discovery and meaning.

Answering the ‘what, where and how’ of everything you want to see, do and accomplish in this next chapter requires conscious preparation in areas far beyond spreadsheets and bank statements. 

The industry paradigm is that you have about 8,000 days in retirement, or around 22 years. In each of those years, you will have more than 2,000 hours of new-found free time that would have been spent working throughout the majority of your life. Filling these thousands of hours with meaningful and purposeful activity is much more easily said than done.

The common approach to retirement planning (yes, we are now using the wider definition) has been to ‘punt the ball down the field’ and ‘cross that bridge when you get to it.’ Yet, we see time and time again that those who leave their lifestyle planning to their first day of retirement are the ones who have the hardest time transitioning into this next chapter.

The people who say, “I’ll never get tired of sipping Piña Coladas on a beach,” face the same fate as the ones who say “I can’t wait to golf every day.” While these may be dream activities for retirees, they ultimately see diminishing returns if they’re your only activities, because humans are funny creatures:  we need meaning and variation.

Despite its innocent demeanour, retirement has some dark, inconvenient truths: 

• Ages 50-64, 65-84 and 85+ have the three highest suicide rates in North America, and in the last five years, we’ve seen a 38% increase in suicides among Baby Boomers.
• Canadians over 65 have a divorce rate three times the national average.
• Over 25% of older Canadians are socially isolated, which causes a 50% increased risk of dementia.
• And, 77% of older Canadians live with at least two chronic illnesses or conditions.

It’s statistics like these that starkly highlight the importance of planning for your lifestyle, wellness and purpose, as well as the need for trusted resources to help with this planning. This was the a-ha moment that sparked our urgency to develop RetireMint.

RetireMint stemmed from empirical evidence showing that once people’s finances are at least on the right track, their primary concerns and conversations with their financial advisors shift far beyond the scope of their meetings. “What am I going to do with the grandkids?,” “Where am I going to travel?” “What happens when I lose my work insurance coverage?,” are just a few of the plethora of questions that popped up time and time again.

It’s fantastic that Canadians have this level of trust and comfort with their advisors, but the truth is that financial advisors are not equipped to answer all of these broader retirement inquiries, and they’ll be the first to admit it. It’s clear that this undue burden falls on the shoulders of financial professionals, but if not for them, who is going to provide the answers?

The goal of RetireMint is to be a one-stop destination for Canadians to plan their entire journey to, and through, retirement. The first step in this process was to identify the key areas that retirees must account for in their planning, on top of their finances. 

The more we dove into it, the more topics we identified, ranging from the more obvious, such as estate planning and insurance, to less addressed matters like hobbies and the psychological shift into retired life. All in all, we developed assessments, education and tools on 14 Areas of Retirement, which are designed to help the average Canadian develop a comprehensive retirement plan.

All Hands on Deck

As a nation, and a wider global coalition, it’s imperative that governments and professionals in all fields come together to help prepare their citizens and clients for holistic retirement. After all, “the time to fix the roof is when the sun is shining.”

The world is in the midst of a demographic tidal wave, neatly dubbed the Silver Surfer Movement. In Canada alone, nearly 8,000 Canadians will reach retirement age every single week for the next 15 years. Yet shockingly, more than 60% of them will not know their retirement date one year in advance, and over a third of them will even delay their retirement because they do not have a plan in place.

It is in the best interest of not only the generations of retirees to come, but also in the interest of easing future pressure on systems such as national pensions, healthcare and social services. 

The financial services industry is on the right track to broaden this conversation, but it can truly spearhead this movement by directing clients to resources and other professionals for wellness, lifestyle and broader planning needs when discussing retirement. 

There are tens of thousands of professionals across the country ranging from personal trainers and therapists to real estate agents and estate lawyers who are equipped to guide retiring Canadians through their comprehensive planning journey. Connecting retirees with these experienced professionals is the first step.

Redefining Retirement For All

As is the case with RetireMint, we must make this education and preparation accessible to all. Every retiring Canadian deserves, and should ensure, at least some base-level preparation in all key areas, from estate preparation all the way to living and downsizing considerations.

Whether it be providing DIY resources or connecting Canadians with affordable planning services, it will take a joint effort to broaden the definition of both retirement and retirement planning.

Retirement is too important to leave to chance, so let’s start planning together.   

Ryan Donovan is the Co-Founder and CEO of RetireMint, an online retirement planning platform guiding Canadians through developing free holistic retirement plans. Ryan and RetireMint are on a mission to redefine what it means to retire and to help Canadians retire better, faster and more prepared.

Visit www.retiremint.ca to explore Canada’s Retirement Guide.