Empty Nestor

Set a Date for Retirement!

Typically this is when most investors become very serious about their retirement planning. You are probably thinking about setting a retirement date. Because of reduced or eliminated debt repayment, there is an opportunity to increase your long-term savings. It is important that investment portfolio volatility is reduced – especially as you get closer to retirement. You don’t want your portfolio to drop by a significant amount day by day or month by month. Although there is still a significant need for portfolio growth because of inflation, you don’t want a stock or bond market decline to change your retirement date. Preservation of your principal becomes more and more important. You don’t want surprises in your retirement plan. You have set your date for retirement and you want to have the assurance that this date can be kept – even if the stock market performs poorly. This is an issue that is way too important to leave to chance.

Think Long Term – You have a Long Life Ahead of You

Your investment portfolio must continue to be viewed as a long-term asset – measured in years and decades. If the money you have is needed in the next five years or so then it should be in cash or a GIC – but when this money is required to provide an income in retirement then this is a long-term investment and needs to be viewed over a suitable long-term time period – say 5, 10, or 20 years. Life expectancy is rising each year and you need to plan your retirement with the assumption that you will live long beyond an actuary’s opinion. You are planning for your life, not a theoretical situation.

Conservative Investments for the Long Term

With respect to investments, growth is still required. Growth investing means owning a portion of your investment portfolio in stocks, either individually or in a mutual fund. Of course you need a diversified portfolio – holding a variety of investments so that you increase your chances of success and decrease your chances of your portfolio varying in value by extreme amounts. Confidence in your investment portfolio and retirement plan should allow you to sleep peacefully.

You need to position your investments so that there is much less chance of losing money. This conservative approach has worked well for investors since investing began. Warren Buffett, one of the most successful investors in history, is famous for saying that “there are three rules to investing: Never lose your money. Never lose your money. And never lose your money.” This is not entirely possible to achieve, even by Warren Buffett, but when capital preservation is the paramount investment thesis and therefore influences all investment decisions – your portfolio should do quite well.

Inflation is NOT your friend

Inflation goes from being an economic principle when you are working and your income is rising with or beyond inflation – to a stifling force that steals money from your pocket each and every year in retirement if your investment portfolio does not include investments that rise along with inflation – stocks. Assuming 3.1% inflation, $10,000 today would be worth only $7,369 in 10 years, $5,430 in 20 years and $4,001 in 30 years. It is frustrating because the only way to protect a portfolio from inflation is to buy volatile investments like stocks – it can seem that we are simply trading inflation risk for volatility risk – and that is 100% true. However, I believe that volatility risk can be managed while holding a diversity of stocks whereas inflation risk cannot be managed without holding stocks. These are not easy decisions to make or maintain. I believe it is essential to work with an objective and independent professional who has significant experience working with investors in this exact situation as well as experience with volatile financial markets. I have seen some of the worst that history can throw at us and my clients’ retirement plans have remained intact.

Retirement Planning - the Definition

Retirement planning involves inputting key assumptions such as inflation, investment growth rates, age of retirement, current investments, planned future investments, pensions, and of course the amount of income that you would like to have in retirement into retirement planning software. Of course there are other factors and considerations that are essential for your long term plan which I will also advise you on. If your current retirement plan is not desirable, you will know what changes can be made today to improve your financial situation tomorrow.

Plan to Spend

My role is not to set a budget or tell you where to spend their money, but to ask probing questions and remind you of the importance of long term planning. Let’s create a financial plan together so you can have peace as retirement quickly approaches.

Eliminate Debt

Your children are becoming independent and not as reliant on you for their economic needs. This can be an extremely exciting and dynamic time in your life as your time and financial commitments are reducing – and often considerably. You have paid off your mortgage or are getting very close to doing so. These are typically the highest earning employment years and so the focus is on complete debt elimination as well as ensuring your retirement nest-egg is entirely funded.

Continue to Protect Your Income

Life insurance is required if you have anyone who relies on your income. Your life insurance is essential for your dependents’ financial future. However, you may not need as much Life Insurance as you once did as, typically, life insurance needs are reduced as you approach retirement and have an increasingly large investment portfolio, or reduced income needs from dependents – or both. However, if you would like to leave more money to your heirs or a charity, there is no better way to do so than through a life insurance policy. Life insurance proceeds are provided to named beneficiaries confidentially, bypassing probate and a will, tax-free within about two weeks of the death of the life insurance policy owner.

Accident and Sickness (also known as Disability and Critical Illness Insurance) insurance is required so that you can receive income even when bad health strikes. Your income needs don’t stop just because you are unable to work due to health issues. You need to be protected against all financial risks.

Financial Advice

My role is to be a source of answers and discussion for all questions financial.

Have Fun – You are Ready

You have addressed all of your financial questions and concerns. You are reducing your debt and saving for retirement. You are spending less than you earn. You know that your financial future looks fantastic. You can peacefully enjoy today knowing that you are ready for anything that life has in store for you.


  • Focus on reducing portfolio volatility while saving for retirement and reducing taxes through RRSP, TFSA and Non-Registered investment contributions.
  • A documented retirement plan is essential to achieve set goals.
  • Eliminate debt obligations while investing enough to ensure a comfortable retirement.
  • Ensure your future is protected with adequate Life and Accident and Sickness Insurance.