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Retirement |  Myths and facts

Retirement | Myths and facts

There are many preconceptions about what awaits us when we retire. But many of them are just myths that can unfortunately encourage us to make bad choices. Point with two experts.

It’s just a big issue of money

How long will it take? One million dollars, two million, three million maybe? Let’s immediately forget that preparing for retirement is just a big matter of money. It’s a myth. “Yes, you have to carefully plan the financial side. But it’s not just that. The truth is, retirement is first and foremost a major life project,” says Leah Saadeh, financial planner and regional vice president of wealth management at Professionals’ Financial. What you do now, whether it is work, family, travel, etc., your interests will not suddenly change because you have become retired. Of course there will be changes and it is important to prepare well for the psychological aspect of the transition to another stage of your life. For this reason, in addition, there are retirement preparation courses. As for knowing how much money you will need, it depends on each case individually, says Lea Saadeh.

The cost of living will decrease

Don’t depend on it too much. Naturally, you will no longer have to bear the expenses related to having to go to work (transportation, clothing, lunch, etc.). “But in general, we don’t necessarily have all the necessary control over our expenses and costs, especially since it’s also about longevity,” says Nathalie Bachand, of Bachand Lafleur Groupe Conseil. You can reduce your spending on leisure time, but your spending on health care will likely increase at the same time. Leah Saadeh agrees. Many people bring up the 70% rule, which means retirement expenses should drop to 70% of what they were before. “This rule is not applicable,” she believes. It is not certain that the lifestyle will decrease; She believes he can simply move on to other activities.

Photo by Martin Tremblay, Press

Natalie Bachand is a financial planner at Bachand Lafleur Consulting Group

Make safer investments

Many people will tell you that when reaching retirement, it is important to adjust your investment portfolio in order to reduce risks and thus ensure that the accumulated savings are not lost. In most cases, this is a myth that needs to be debunked. “The portfolio must continue to be managed according to risk tolerance,” says Lea Saadeh. Longevity is also an important factor to take into consideration, admits Natalie Bachand. “A retiree’s portfolio needs to take into account liquidity needs,” she says. But this does not mean that it should consist only of safe investments. A longer life expectancy means that retirees must also think in terms of the growth of their assets, and not just worry about the security aspect of the portfolio.

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Defer your pensions

Many will tell you that you should postpone the moment you start receiving your state pension for as long as possible, because it will be much higher. It will be a waste of money to deprive yourself of these savings that you will have. But in some ways, perhaps this is a myth that also needs to be debunked. “Making the right choices is not easy, because everything will ultimately depend on how long you have to live,” explains Natalie Bachand. But we can easily imagine factors, such as poor health, meaning that the losers will be those who did not take advantage of it as soon as possible for them. However, the choice also depends on other resources available to the retiree.