Life After Full-time Work Blog

From questions I was asked in a podcast

Going through some old Word documents, I came across notes I made for a podcast interview in November 2023 for Pension Awareness Day in February 2024 (a day created by the Financial Services Regulatory Authority of Ontario, or FSRA). I can’t find the podcast now, but I do still have the extensive notes I made for the few questions I was told that I would be asked, and together they seem like a short and reasonable summary of what constitutes good preparation for one’s retirement.

So here it is.

For the record, the excellent moderator/interviewer was Darryl Mabini, then AVP, Pension Advocacy & Research at the Healthcare of Ontario Pension Plan (better known as HOOPP), and my two co-panelists were the equally excellent Tashia Batstone, President and CEO of FP Canada, and Jason Vary, President of Actuarial Solutions Inc. I have no record of what Tashia and Jason said. And while I’m showing the questions here as a continuous narrative, obviously they weren’t; these questions to me were interspersed with questions to Tashia and Jason.

***

Darryl: Let’s start from the beginning. Don, I’ve heard you say that the label of “retirement” deserves to be retired. That is an interesting idea. From someone living their life after work, how would you label retirement?

Don: Absolutely, the word “retirement” should be retired. It’s so backward-looking! It says something has ended, as if there’s no tomorrow, and you’re defined by who you used to be. Whereas, in fact, we typically have a long, bright future ahead, and typically, as happiness surveys show around the world, this is the happiest time of our life. So, I prefer to call it “graduating from full-time work,” graduating to a new and better life, looking forward, not backward.

Darryl: During our working years, there will certainly be bumps along the way. Career changes, periods of high inflation, higher-for-longer interest rates, and increasing economic uncertainty. Don, what advice do you have for savers to ensure they are able to deal with near-term challenges without losing sight of the future?

Don: Your question is perfect. Every generation will go through and face the things you’ve listed, the downs as well as the ups. And, in a way, you’ve also provided the answer, when you contrasted the near term with the future. The thing to remember is that this isn’t a sprint, it’s a long journey. But I’d go further, and be more specific. I’d divide the working years, for retirement savings purposes, into two parts: Get Started and Get Serious.

The Get Started stage starts as soon as work starts. These are the family and career and socializing years, and saving for retirement is an afterthought, at best. That’s OK. There’s time in the future. Start with an emergency fund, get it to around 30 days of pay, for unexpected cash needs. That’s even more important than saving for retirement. Then sign on for whatever retirement plan your workplace offers, get any free matched contributions from your employer, take the default investment glide path. Automate everything, so you don’t have to think about it, and in fact when economic times are bad, you won’t even notice the retirement effect, as long as you have your emergency fund.

This stage goes until, let’s say, age 40. After that, you have to Get Serious. The thing is: if not now, when? So this is when retirement saving becomes your main focus, you maximize your contributions, you gradually start to think about your accumulated assets in terms of the post-retirement income they will generate, you start to ask experts for a personalized investment glide path. If you do these things, you’ll have enough knowledge and confidence about your own situation that short-term economic downturns won’t upset you as much as they will upset others.

Darryl: Financial security is critical for any retired person or those considering retirement, but what else do we need to consider when we think about life after work, Don?

Don: Research, as well as my own experience, suggests that financial security is indeed crucial, exactly as you say, but in retirement there are potentially two other issues that can really bother or even depress us.

The first is the identity question: Who am I? Particularly if you really enjoyed your work and your status. And suddenly they’re gone. So, who are you? If you create a business card, how will you describe yourself? “Retired,” as I said earlier, is so backward-looking! For me, I say I’m “Happily retired” – “happily” makes all the difference, it means I’m comfortable and in control and looking forward. But it’s tough. Working part-time is a help when you have to reinvent yourself, because it makes the transition gradual, and gives you time to adjust and find new routines and new social groups.

And that’s what the second issue is: How will I fill my time? And, by the way, for most of us, how will I fill my time without interfering with the life of my partner? Because we’re not only partners, a team, we’re also two separate people. And being together all the time can be claustrophobic, as we discovered during the Covid lockdown. So, finding things to do separately, as well as things to do together, becomes important.

Darryl: One last question. If you were to leave our listeners with one final piece of advice, what would it be?

Don: The only reason we fear retirement is ignorance of what comes after work. So, plan to face those issues (who am I, how will I fill my time) before you graduate from work – then you’ll take them in your stride after you graduate, and this truly will be the happiest time of your life.

***

Takeaway

There are simple but important ways to think about retirement, so that you can prepare for it during your working life, and make it the happiest time of life once you get to it.

Leave a Comment