Top 5 Questions Women Ask About Retirement

Expert Lee Anne Davies—Gerontologist and Head of Retirement Strategies at RBC—answers your most popular retirement questions.

I want to maintain my standard of living in retirement. How will I know how much to save?

The starting point for successful retirement lifestyle planning is not the ‘magic number’—or picking a dollar figure that will ensure a comfortable retirement. It’s asking people what they care about. The financial details will follow from there.

Take an honest inventory of how your financial situation is working today. Consider:
• Are you able to live within your means and enjoy your life?
• Can you manage a budget and cut back some areas if needed?
• Do you feel you can maintain this same standard of living in retirement?

Compare your current budget to your likely future retirement income. There are many online calculators to help you determine both your budget and your retirement cash flow. If you are not able to balance your budget today with your income it is highly likely that you will encounter these same issues in retirement and you may need to make changes quickly to keep your retirement planning on track.

RBC’s Your Future By Design® program helps people look at the big picture with a new perspective. Our discovery and planning program asks some unexpected questions to get to the answers that are really important. For example, we ask clients to think about the day-to-day activities that will give them the most satisfaction in retirement. We also talk about their mind and spirit and what things in retirement will help them feel engaged and still enable them to contribute to activities that are important to them.

What should women consider when planning for retirement?

It’s important to look at retirement from a holistic perspective and there are some key factors to ensuring a fulfilling retirement. Saving money is important, but retirement planning is also about envisioning what your future will be like. For instance, it’s important to begin considering:

• Have you taken key steps to ensure you are familiar with your financial situation and able to manage things on your own or are you relying on someone else to take the responsibility?

• Are you clear that you are most likely to be the surviving partner in a couple and are you certain that you will have enough money to continue to maintain your lifestyle if your partner passes away first?

• Can you anticipate changes in your family structure that could impact your retirement plans and finances such as caring for a grandchild or an aging parent?

• Do you have trusted family members or friends whom you can rely on for emotional support throughout your retirement?

• What can you do today to maintain healthy aging throughout your retirement life?

• Do you have a vision about what you want this period of your life to be?

I want to maintain my standard of living in retirement. How will I know how much to save?

It’s important to develop a financial plan to help you achieve your short-term and long-term goals. A plan will not only allow you to make the most of your financial situation, it will provide you with piece of mind knowing that your investments are on track. If you have goals for your future, financial planning will help you achieve them. If you don’t have goals, it will help you create them

This is where professional advice can be invaluable. A professional can help you build, manage and maintain your portfolio. Future value calculators can also provide you with some idea of how much your nest egg will be worth when you retire.

I’m a single, divorced or widowed woman retiring alone. What do I need to be thinking about to make sure my retirement dreams come true?

This is where the planning is of tremendous importance. One of the fundamental steps to ensuring a successful retirement is to develop a plan. Often we see that single people are less likely to plan, possibly because they don’t have the other adult to support them through the planning process. However, this is a big error for singles who will be responsible to look after themselves throughout their retirement and who will typically have higher living expenses than a couple who share costs such as shelter.

Also, as a single woman planning for retirement, there may be a number of questions that arise beyond financial health such as, who will look after me if I become frail and who will manage my affairs if I’m no longer capable. Preparing a Will, and Powers of Attorney for Health Care Directives and Financial Management are very important for any adult who lives on their own. You want to identify those people you trust to ensure your wishes are maintained.

Most of all, in order to be prepared, you need flexibility. Retirement is not a single phase of your life; it’s a series of stages. In addition, your life in retirement will be somewhat unpredictable at times and you need to be prepared to handle the unexpected. Having your financial and legal house in order will help to provide you with peace of mind when the unexpected does arise.

What can I be doing better now to make life easier for me come retirement?

Saving money isn’t about giving up the things you enjoy. It’s about spending wisely, so you can continue to afford the lifestyle you want in the future.

One of the most effective ways to save is simply to have money automatically deducted on a regular basis, such as monthly, from your pay cheque or transferred from your chequing account—even as little as $25.

Many people with an automatic savings plan find that they don’t even miss the money in the first place, because they never see it. In addition, setting aside a small portion of what you earn soon becomes a habit that you’ll want to keep up.

Another good habit to get into is to earmark part of any “extra” money for your RSP. For example, if you get a bonus at work, enjoy half of it now and put the other half to work for you in your RSP. Do the same anytime you get a raise, and you’ll be amazed how quickly your RSP can grow.

Finally, retirees always tell us that the most important thing on their mind is good health. By looking after yourself today you are more likely to experience many years of healthy and active retirement.

For more information on Your Future By Design® and retirement tools and calculators, visit www.rbc.com/yourfuture.