Rhonda's Blog

A man is NOT your retirement plan.

Tuesday, March 10th, 2009

I always advise women of two things, first take care of your personal finances throughout your years ‘as if you had to’. And  second, save regularly regardless of your financial health. This was the adage of a client I dealt with years ago. A lesson learned when her husband of 25 years walked out and left her and their 3 kids in a state of financial shock. As she said, “how I wished I had paid attention to our finances over our marriage”.  Twenty years later she is retired and fulfilling her dream of travel. 

How? 

Well she had decided to become a student of her own financial health. Her first step was to get a true understanding of the financial situation she was now in. She figured out how much money she needed a month to house and clothe her children. With that in mind she went in search of a job that would pay enough to cover these basic needs.  And then regardless of her financial position every month she put away whatever she could towards her retirement savings. When she finally decided to retire she had over $300,000 invested. In her words, “I started saving just $5 dollars a month. After a few years this had crept up to $25. And by the time the kids had left home I was saving $200 a month. It just became an empowering habit”. 

So what did I learned from this client?

Take responsibility of your own financial health throughout your life, ‘as if you have to’.  This means you should have an understanding of what monies come in and what monies go out. And second, set up a regular saving plan.  The latte factor as it is called. If you are spending $4 a day on that fancy coffee you can surely find $20 a month to put aside for savings.

Start small if you have to and invest into something you cannot easily access. Take charge of your financial health and make your retirement your responsibility.  As I like to remind my female clients, “A Man is not your Retirement Plan”.  You are!

Rhonda Sherwood, CFP. FMA
Wealth Advisor
www.rhondasherwood.com
www.itsHERmoney.com

’9 important questions to ask before you retire’

Thursday, March 6th, 2008

If you’re like most, you probably don’t have the time to assess your future retirement needs. However, with increasing life expectancies and concerns over the stability of our health care system and government/private pension plans, early retirement planning is a must.

To help you get started, here are some questions to think about:

1. How much money will I need to last throughout my retirement years? Some experts say you’ll need up to 70% of your pre-retirement income. 
2. What will be my sources of retirement income? Relying just on government benefits is a mistake. CPP and OAS on average make up only a third of your total retirement income needs. 
3. How long will I live? How long did my parents/grandparents live? How is my overall health? A legitimate concern many people have is, “will I outlive my money?”
4. What if my spouse dies first? Am I prepared financially? On average, women outlive men by 5 years.
5. How will I handle the unexpected? Do I have enough emergency funds? You should have money put aside or a line of credit set up for financial emergencies.
6. What activities and hobbies will I take up in my retirement years? What might these activities cost? What is the cost of what you enjoy doing today? Add 3% (inflation) to that cost for each year you have until retirement.
7. What if I need assistance in my retirement? Have I planned for home care and medical costs? With such a large portion of the population retiring within the next 10 to 15 years, home care cost are likely to dramatically increase. 
8. How will I manage my retirement money? Will I invest it myself or use the services of a financial planner/ broker? Do you want to be concerning yourself with investment decisions in your 60s, 70s or 80s? Think about consolidating your portfolio and working with just one advisor. 
9. Have I thought about estate planning? Do I have a Will, Power of Attorney and a Living Will in place? If you don’t plan for the inevitable, the government will step in to take care of things for you and most likely not how you would have preferred it to be done.     

    

If you haven’t yet given much thought to what your retirement days might look like, it’s time to step back and reflect on how you would like to spend this phase of your life. Taking a realistic look ahead and planning carefully will help ensure that these ‘golden years’ will meet your expectations.

 
Rhonda Sherwood, CFP. FMA
Wealth Advisor
www.rhondasherwood.com
www.itsHERmoney.com