Why having a Road map to Achieving your Goals, is necessary!

Is retirement a one-size fits’ all sort of solution? Why more than ever, financial gap analysis and addressing those gaps has become necessary to meeting your financial goals.

Money should not dictate how I live my life. I must take charge and become the master of money, so that I decide what I want to do with my time. -Manoj Arora.

As more baby-boomers’ go into retirement — a question arises, “Have I saved enough, to carry me through last third of my life?” We are living longer, as the Canadian Government acknowledges and, reformulates the Registered Retirement Income Fund (the process by which our RRSP’s are paid out to us).

So have you (saved enough)? Here are some expenses/payments that you may be making in your working life; mortgage, kids’ expenses/education, external debts, and regular savings towards retirement to name a few. Good portion of these expenses are no longer in retirement and, configuring inflation and wage increases gives a better picture.

Add to the above that we are living longer, whereas 65 years ago we weren’t living as long and, that means that every dollar we save for retirement — needs to be stretched that much further or another way to put it, is it being able to take on necessary fluctuation in investment life-cycle while mitigating risk has become even more important. The science of mathematics is built around numbers, yet the art of living is built around quality of life. How do we quantify a “certain” lifestyle with the above measurable variables?

I have always believed in the Art of Simplicity; start with what you know, build on what you have and add/subtract, as you work with your financial plan. Saving for the last phase in our livelihood is an emotional roller-coaster and, I regularly speak with my clients about what retirement means to them and re-formulate the very pillars of our initial conversation to re-write a new destination. Retirement is not a stagnant entity and, neither is your thought process of what it means to you or, what it means to those who you plan to leave behind a legacy for.

Does this mean that every single person should be saving to 70% of Gross Income? Rather more need to save less and some more, this all catapults from what ends you are addressing and how you want to chart getting there. In other words, some factors that are determinant to you are your income/savings today, historical rate of return you are able to ascertain with minimal risk, expenses today and timeline in paying them down before retirement, your rigor to meeting and exceeding your retirement goals with buffers and inflation/income increases. Are these all the same, for all?

A thorough understanding of where you are today, where you want to be, taking into consideration the timeline of you financial goal(s) you have over your lifetime and pegging them to your investment philosophy engendering the least amount of risk to reach and any other external/probable factors are engendered in creating financial models to bring about quality of life you want and the numbers you are willing to ascertain — is what makes financial planning, an exciting endeavor for my clients and I.