Are you one of the Canadians who will be able to retire much sooner than sixty-five? Either way, you’ll have some very important decisions to make regarding your future and whether or not you’ll be retiring early or waiting. There’s no right or wrong answer, it all depends on how much money you’ve saved, your personal lifestyle, and your health. If you’ve accumulated a pretty big nest egg and are ready to spend the rest of your time travelling and enjoying the finer things in life, early retirement might be right for you. If you’re a workaholic who is at the top of your game or someone who is just shy of their financial goals, it might be better to wait. If you’re not sure whether retiring early vs. late is the best option for you, find out here.
People are Living Longer
Today, people are living longer and healthier lives. Many retirees can expect to live well into their 90s, which creates a challenge for many. Those who live longer may find that their retirement savings are insufficient to carry them into their nineties. But if you’ve positioned yourself to have enough retirement savings and financial growth to last you well past the standard life expectancy, then retiring early might not be a problem for you.
Costs are Going Up
However, you also have to consider inflation, the rising cost of living, and the future costs of nursing and palliative care. If you have just enough in your bank account and investment savings to get by at today’s rate, you might not have enough to cover the costs of tomorrow.
You’ll Receive Less in Early Retirement
If you’re depending on your pension and government cheques to fuel your retirement, it’s best to wait. Regardless of when you retire, CPP/QPP will not kick in until you’re 60, and Old Age Security doesn’t start until 65. If you retire early, you can expect to receive less CPP/QPP from the government as your contributions will be cut short. You’ll also take a hit on your workplace pension and receive smaller monthly payments. So, if you don’t have enough RRSPs, TFSAs, RICs, and investment savings to supplement your income, it’s best to wait till you have a more sizable nest egg.
You’ll Be Younger than Other Retirees
One aspect you need to consider is whether or not you’ll be retiring alone. If your spouse is still working and your friends are years away from retirement, it might be best to wait. However, if you have a number of friends also seeking early retirement, you’ll have more people to surround yourself with.
You’ll Have More Time to Do What You Want
Some people worry that if they retire early, they’ll become depressed and lose their sense of self-worth. But that is rarely true if you know how to keep yourself busy. Retiring early allows you to spend your energy on things you truly love and enjoy. You’ll finally have the time to volunteer at causes that matter to you, travel the world, and dive into those hobbies you didn’t have time to enjoy when working.
Ready to plan out your retirement? Contact us at the Beacon Group of Assante Financial Management today.