Understanding the Financial Independence Stages we will planning from
Most individuals in their mid to late 50's concern themselves with providing retirement income during their lifetime. And with a third of their lives still left to live, many are beginning to realize their needs are different as they think through the various stages of life they will transition to- be it semi-retirement; full retirement; and retirement at the end of one's life.
We call these stages "The Three Retirements".
top
The Three Retirements©
Gilles R. Marceau CLU, CFP, RFP, P.R.P
The LifeWare Illustration Calculator for financial independence planning is simple and involves only four steps:
1. Determining the age you wish to retire.
|
|
 |
|
2. Determining the income you will need.
|
3. Identifying the sources of income you will be able to rely on.
|
4. Comparing your projected income with your estimated needs.
|
The LifeWare Financial Illustration Calculator is simple to use but yet powerful and precise retirement planning software. It’s a standalone application that you can install on your computer, where you can plan for yourself only or include your spouse. It features rich graphical user interface with easy to use navigation and extensive help system, which will help you learn how to manage your retirement financial plan.
The software is designed to work on Microsoft Windows® family of operating systems, including Windows 95/98/Me, Windows 2000 and Windows XP. |
First Retirement - semi retirement
The First Retirement encompasses trading "at work time" to "do the other things I want to accomplish in my life". At this point, the driving force is not money but internalized feelings of accomplishing other goals in one's life. This trade off between "at work time" and "doing the other things I want to accomplish in my life" can be referred to as "the semi-retirement period".
True wealth - is time.
This First Retirement Stage involves a transition to a new way of living and requires a period of adjustment. What can be controlled should be controlled. Life choices can then become a real possibility with the individual determining the direction of his/her life, rather than being tied into the business for a significant part of his/her senior years.
Second Retirement - full retirement
To summarize, the First Retirement Stage involves a transition to a new way of living and requires a period of adjustment. It is a period that most individuals will enjoy until they arrive at that point in time in which their energy levels do not permit them to "keep such a pace". The natural aging process begins to affect one's ability to continuously do.
The Second Retirement relates to "slowing down" due to the aging process. The topic of aging is one that many prefer to avoid. Yet, it is a process all of us must go through. We can prepare for aging only if we talk about it. While it may be difficult for some people to picture a situation twenty years in the future, it is an essential discussion to ensure that personal plans also address potential needs.
For example, during the First Retirement Period decisions about where to live may be based on work-related factors.
At the Second Retirement Stage, the housing decision becomes part of the individual's personal planning choices. Whether an individual remains in his/her current home or community ultimately depends on what the individual wants out of life.
The Second Retirement should allow a smooth transition that takes into consideration the aging process. The Second Retirement should include the ability to cope with life, to maintain emotional well-being, to continue to make valued contributions to all facets of life, and to feel worry-free financially.
The objective in the Second Retirement Phase- full retirement- remains unchanged. It is to create wealth for retirement sufficient to maintain one's lifestyle for the last 25-30 years of life without having the worry of outliving one's money and to accept life as it is and make the best of it.
Third Retirement - retirement at the end of life
The Third Retirement represents that stage in which our health may affect our finances.
For example, the effects of possible long-term health care needs on an investment portfolio that is to provide income to the surviving spouse or the provision of alternative living accommodations to the spouse who can no longer care for one's self on a day-to-day basis are significant lifestyle-related issues that will have significant effects on the capital/income requirements. While this stage may be an uncomfortable subject, you need to get through the reluctance barrier to ensure that you have plans that anticipate real potential situations.
A recent RBC Insurance/Ipsos-Reid survey found that 34% of respondents were worried about the cost of care in their old age.
Recent history has demonstrated that even if the Provincial Government will cover all costs of doctors and medicine, there is limited help for the cost of homecare.
It has become very clear that the provision for long-term care, and the dollars that are necessary to pay for it, are and will continue to be an individual responsibility.
top
Only You Can Be Your Life's Architect
When you know what you want to accomplish, then you can
make the appropriate decisions relating to the financial
support of your retirement needs.
Life is not a dress rehearsal
It is about taking charge and control to accomplish those
things that are important to you. It's only when individuals
take responsibility by making a major effort to solve their
problems, adapt to changing circumstances and look forward
to the future that they can say they have done a total job
of retirement planning.
This can best be achieved if your planning incorporates
the same process for personal retirement planning as that
which we use for your business planning: you want to become
a successfully retired person.
Let's Get Started.
top
|
