Redefining Retirement

Times have changed. Among the things that define today’s retirees is their long — and often adventurous — to-do list.

Once upon a time, retirement typically meant slowing down, entering the ranks of “senior citizen” and living on government and workplace pensions. But times have changed.

Among the things that define today’s retirees is their long âˆ’ and often adventurous âˆ’ to-do list:

  • Travel the world: next stop, Rio!
  • Start a business: consulting, catering, dog-walking, decorating
  • Try new things: photography, belly-dancing, snorkeling, sky-diving
  • Volunteer for local or national causes
  • Run a marathon or two
  • Move to the cottage
  • Head back to school

They’re also relying less on traditional sources of retirement income. Some of the reasons may have to do with facts cited by pension specialists, Ian Burns and Shelley Johnston, in their book, Pay Attention to your Pension:

  • Government pensions fall short of replacing the 50 to 70% of pre-retirement income needed to maintain a decent standard of living.
  • More than a third of Canadians don’t have a workplace pension plan.

It could also be age-related. Statistics Canada reports that in 2005-2007, the average man who reached age 65 could expect to live an additional 18.1 years while a 65-year-old woman could live an additional 21.3 years. For these folks, a long-lasting retirement income – one that’s flexible and able to cover long-term care costs âˆ’ becomes particularly important.

So where’s their money coming from? How are these retirees financing their daily, extracurricular and other expenses?

The new 2012 Sun Life Canadian Unretirementâ„¢ Index reveals that only 30% of Canadians expect to be fully retired at age 66 and almost half (48%) are planning a phased retirement. A growing number are also creating personalized plans, using their retirement savings to buy different kinds of income products based on their specific needs, personal preferences and retirement wish list.

Someone who wants a secure retirement income for life âˆ’ income that isn’t affected by fluctuating interest rates or market performance âˆ’ might be most comfortable with payout annuities which provide regular payments. Others interested in income growth and inflation protection (and who don’t mind weathering the ups and downs of the market) could be good candidates for registered retirement income funds (RRIFs) comprised of mutual funds or stocks, an option that lets them determine how much to withdraw as long as it meets the required minimum. And for everyone in between, there’s the option of mixing it up through a combination of income products, both guaranteed and growth-oriented.

According to the 2011 Sun Life Canadian Unretirementâ„¢ Index, Canadians with a written financial plan are more confident about having enough money to:

  • Take care of basic living expenses in retirement (84% with a plan vs. 48% without),
  • Cover medical expenses (66% with a plan vs. 38% without),
  • Pursue their retirement interests and hobbies (73% with a plan vs. 32% without), and
  • Enjoy the retirement lifestyle they want (71% with a plan vs. 30% without).

“The most successful people in the world are those who plan,” affirm Burns and Johnston.

“It’s not that they always get what they want, but because those who plan place goals in front of themselves, they’re in a better position to at least go forward in the right direction. You simply can’t move into a worry-free retirement without planning for it.”

As retirees dream of new and exciting ways to fill their days, understanding the income options and making personal choices will become increasingly important. To find a CARP Recommended Sun Life Financial advisor visit