Did you know that after you retire from work, you'll have over 2,000 hours of free time each year? Do you know how you’ll spend it? Do you know how much your retirement lifestyle will cost?
People approaching retirement are often shown in RRSP season advertising campaigns as a calm group gearing up for an easy trip down the road to freedom. In reality, many are simply ill-prepared – both personally and financially. A recent survey revealed many Canadians have no idea how they want to spend their retirement years. Only one quarter of Canadians have a plan for their retirement lifestyle. For those who don’t have a plan at all, the majority are concerned that they will run out of money altogether.
If the bombardment of RRSP season ads have you wondering how to live out your retirement years, you need to explore your choices to see what it may cost to sustain a certain way of life down the road.
Do you see yourself in any of the common retirement lifestyles listed below?
Categorized by a Canadian-based research firm (The Brondesbury Group), data from Statistics Canada was used to nail down some ballpark price tags for each lifestyle. Keep in mind if you live in a large city, you are looking at the higher end of the range. Once you have a general idea as to which retirement lifestyle you may want, work with your financial adviser to find out how to finance it.
Happy Homebodies $22,500 - $35,900
This group lives very simply, on a fairly small income. Main costs include personal care, meals and housekeeping. They spend more time reading or watching TV than most and they often go to church-related activities if they want to socialize -- which are generally inexpensive.
Social Butterflies $27,900 - $43,500
These people spend half their time with friends, usually at each other’s homes to keep entertaining costs down. If they get together for costly activities or expensive restaurant meals, they'll spend more. Even things like transportation can add up.
Super Shoppers $33,200 - $52,400
Shoppers spent about 4 hours a day in stores and malls, but they usually browse and don’t buy, so costs can be low. But they'll still spend a lot more than if they kept their wallets at home. Canadians who retire this way usually need a much higher income.
Go-Getters $24,000 - $36,300
An active group, Go-Getters keep busy with hobbies and interests such as sports and recreational activities, cultural events, arts and crafts. This can be inexpensive. Going for a good walk is free!
The Community-Minded $31,600 - $49,200
Volunteers are out in the community for about six hours on most days. They may assist civic groups, hospitals or schools. This can be very rewarding and doesn't have to cost a lot. Transportation can add up, however, as can social outings with your fellow volunteers.
Travelers $$$ -- depends on travel costs
Travelers come in all shapes and sizes - and so do their incomes. Some may choose a cheap bus trip to a nearby attraction as the way to go. Others sell their homes, take up life on the road, or hit warmer climates like Florida. The sky's the limit - if you have the money to pay for it.
Worker Bees $52,900 - $73,100
These busy seniors still work regularly. In fact, many put in a full eight-hour day. No wonder their incomes are the highest of any retired group of Canadians. They're still busy building wealth - and loving the challenge.
External resources:
Survey News Release (CNW)
http://www.newswire.ca/en/releases/archive/January2004/14/c9751.html
Living Your Retirement
http://www.investored.ca/en/focus/retirement/living_your_retirement.htm
