Get active with your money

Financial confusion is an affliction many Canadians must face as they age. At some point in our lives, but usually by 50, we become overwhelmed by increasingly complicated finances. What started out simply as mortgage and car payments has become RRSPs, RESPs, estate planning, insurance needs, and a whole lot more. It’s little wonder we sometimes hand it all over to a bank manager or financial adviser, as if to say: “please take our money away and hold it until we retire.”

Unfortunately, by removing ourselves from the picture, we forfeit control of our financial destiny, says Sue Campbell of Victoria, B.C. As one who’s learned to actively involve herself in her personal finances, hers is a reliable voice. In fact, over the past few years this retired school teacher has taught herself the ABCs of finance and developed an A+ retirement plan. Along the way, she discovered that a little knowledge and a lot of communication make retirement planning that much easier.

Become a player

Sue admits she wasn’t always comfortable with money. In fact, for most of her life she wasn’t overly involved in her financial affairs. Like so many of us, content to watch from theidelines, she relied heavily on a financial adviser. Why? Too little time, a common complaint among 50-plus Canadians.

However, when Sue married Brian, a family physician, and took early retirement, she suddenly had enough free time to delve into the world of personal finance. She surfed the Internet’s financial sites, read volumes of material (including CARP’s annual Financial Guide) and attended as many finance-related seminars. “I’d ask so many questions at these,” she recalls. “It got to the point where speakers would simply look the other way whenever I raised my hand!”

Communicating goals

As Sue’s experience expanded, she took a more active role in her finances. At 50, she could afford to make longer-term, higher-risk, investment choices, including RRSPs, segregated funds and stocks. Brian, 60, chose a more conservative, retirement-focussed plan. And to further confuse matters, they each brought their own financial adviser to the marriage.

The trick was to communicate their entire package of needs to both financial advisers and come up with a winning game plan. Not an easy task. "Most people I know have a fear of financial advisers," says Campbell. "They don’t know what questions to ask and may fear looking silly asking them." Sue’s persistence and knowledge helped her overcome these fears. In the end, by involving herself fully, she successfully communicated all of their objectives and developed a neatly-tailored plan addressing the entire scope of their financial situation.

She stresses that financial advisers are there to do more than push mutual funds, RRSPs or stocks. You must let them know your specific financial goals and, together, decide on what strategies will garner the best results. Ideally, a good adviser should be "pro-active, knowledgeable, sympathetic to your needs and, above all, a good listener."

A winning plan

Through close contact with their advisers, Sue and Brian have nailed down the basics and have hammered out a plan. They decided, since Brian was still working, that a spousal RRSP would be a good idea. Also, when she left her job and married, her insurance and benefits needs had changed. So she modified her insurance policy and shopped around for a private benefits package that took into account her new circumstances. Likewise, the couple have begun estate planning because, as Sue says, "it’s never too early to start tying up those loose ends."

Every six months, Sue and Brian review their finances and make directional changes, depending on their circumstances. When it’s time to retire, they hope to travel a little and spend time with their grandchildren. The two dream of wintering in Mexico and setting up a clinic where she can teach English and Brian can practise medicine.

Everyone involved has put in a lot of work to build a plan that will make this retirement dream possible. Sue knows she had an advantage — not everyone has the time, inclination or the resources to tackle financial planning she had. However, everyone is capable of learning the basics and communicating your needs.

Most important, though, is to involve yourself in the process. "It’s your money, after all, and you have the say," she says.