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[edit] Retirement Planning


[edit] What is Retirement?

Retirement is a major life transition when people leave the work force either voluntarily or involuntarily. This can be positive and/or negative [1][2][3].Retirement is not necessarily reached at age 65, it is a milestone that depends on when you are ready and prepared.Many retirees have difficulties adjusting to a loss of identity from their professional role, which can result in unwillingness to accept their retirement options[1][3][2]. Retirement itself has many paths and is unique to each individual depending on their contexts such as finances, health, marriage, anxiety life events and more [1].There is no cookie cutter template for retirement success, because life is unpredictable.Retirement planning is more than just financial, also developing a new lifestyle plan maybe around leisure. Retirement can then be seen as starting a new. Research has indicated that planning ahead can make the life transition smoother and is a key strategy in successful adjustment [1][3][2]. This includes making clear goals that can stimulate activities and give focus to one’s life again. So don’t fret! Plan ahead!

[edit] Planning Strategies for Retirement

Planning is a personal process that takes careful thought and consideration that can help you manage your retirement goals. When planning ahead, never think that you are alone. A good starting point is speaking with a Human Resource Professional who can give you tips on what to expect and guide you to help make decision about retirement. Also, look to your social supports and networks for help such as your spouse, children, parents, community, friends etc [4]

[2][1].These resources have been shown to aid the adjustment process[2][1][3] It can be a helpful to write down and brainstorm how to spend discretionary time. By assessing the kinds of activities that provide a sense of meaning, positive emotion, that are based on strengths, skills, and interest can be an effective coping mechanism for the life transition [5]. By writing down your attributes, it allows you to visually look at how you want to spend your valuable discretionary time. The exciting part of retirement is that it is freely chosen. Time is the most valuable possesion you have so spend it wisely and get creative! Planning can look at personal fulfillment, family involvement, and understanding personal motivation such as money, personal reward, or learning a new skill. Furthermore, this allows you to pick out those items which you see as most meaningful, and authentic to you. Planning can also include preparing lists such as where you want travel, how you spend your time with family, fixing up the house, getting more involved with the community etc [5].Make sure you have a balance of different ideas and that they are not specific to just career or just on physical health. You really want to strive for a holistic view of what you want your life to look like or to be like. This can include your bucket list which outlines accomplishments before passing on. Once there is a clear vision the next step is goal setting.

[edit] Reminders to Help you Plan

  • Stay positive
  • You are not alone
  • Plan ahead

[edit] Goal Setting

Goal setting is seen as a valuable tool to give focus, meaning, and a sense of purpose and value in life [5]. Goals can aid you in achieving something and can lead to success, which can also bring joy and positive experiences to your transition [5]. Lastly, goals can help determine motivation and give you a step by step on how to achieve these aspirations. Goal setting takes time, and goals can be difficult to determine. Attainment of goals can change over time, due to changes in your life or reevaluating what you wish to accomplish. By clarifying goals it can help predict planning practices, and in turn, predicts savings tendencies which determine how much money can be spent on varying leisure activties. Look at needs, wants, and how much it will cost! Goal setting can help navigate life after retirement. Domains for goal setting can include:

  • Finances
  • Travel
  • Take on a new hobby / devote more time to an existing one
  • Teach/ Coach
  • Family Time
  • Volunteer
  • Career or work related
  • Health related domains;spiritual, social, physical, emotional, cognitive.

[edit] Types of Goals

Bullseye for goal setting
Bullseye for goal setting

Since goal setting can be shaped around developing a new skill or improving current skills, beating old habits, or developing better ones and producing an outcome, achieving a dream there are two types of goals short term and long term. The great thing about goals is that they can be changed at any time and can help with time management.

Short Term versus Long Term Goals

Short term goals are those that are done within a short time frame such as week, month, year. For example, six months from now I will volunteer three times a week for an hour [5]. Whereas long term goals indicate a longer time period example in 5 years from now I want to have saved $6000 for my trip to Australia[5].Long-term goals are often the most meaningful and important goals. One pitfall, however, is that the achievement of these goals is usually far in the future where people can lose positive attitude and motivation.

It is important to layout a step by step process on how to achieve them to give guidance along the way. Just like anything in life you need a balance between long term and short goals to ensure you can achieve your outcomes.

Many professionals such as financial planners,retirement counselors, and human resource professionals agree that goal setting helps plan strategies and give focus to life after work. Work does not always have to have a financial value, where giving back to world without financial reward can be just as meaningful as work. Planning and goal setting is also an excellent coping mechanism with the this life milestone. Access resources that can give guidance! Planning will help people be prepared.

[edit] Financial Planning for Retirement

[edit] Before Retirement

Preparing to retire in today’s society requires thorough and complex planning. It is essential that those approaching retirement arrange a financial plan far before they leave the working world.[6] There are a number of questions that should be answered well before an individual receives their last paycheque:

  • How old do you want to be when you retire?
  • How much accumulated income will you require at retirement?
  • What kind of government support can you expect?
  • How and when will you receive your pension?

The list of questions you can ask yourself before retiring could be endless. To make life easier, it is vital for individuals wanting to retire to implement a financial planning program.[7] The purpose of financial planning is to review your present financial state, as well as to create short and long term goals. In addition to creating goals, financial planning generates an approach to achieve those goals [8]

Before you begin the planning process, it is a good idea to create an objective. Setting an objective helps you realize what you need to achieve before retirement [8].When establishing an objective it is important to be realistic and set attainable goals. An objective is something an individual must work towards over the years. For example, having enough money to do what you want in retirement, such as; taking classes at a university, going on a vacation, or joining a group exercise class like aqua fit. [6]

After creating an objective, the next step in the planning process is determining the income amount you will need in the first year of retirement [6] Normally, 70% of what an individual has earned over the past 3 years is what they need to remain at their current standard of living [9]

With an average gross annual income of You will need
$20,000 $14,000
$30,000 $21,000
$40,000 $28,000
$50,000 $35,000
$60,000 $42,000
$70,000 $49,000
$80,000 $56,000

Question Retraite. (2011). [Table 3] how much will you need at retirement. Quebec: Question Retraite.[9]

[edit] Reliable Sources of Income

Types of Government Pensions

Federal Old Age Security Program (OAS): This program provides individuals with three types of assistance : the OAS, the Guaranteed Income Supplement (GIS) and the Allowance. [10]

Old Age Security Pension: A basic pension for anyone who has been a legal resident of Canada for a minimum of 10 years, after age 18. OAS can be applied for at age 65, it is paid monthly, and the amount depends on current income. It is a taxable benefit [10]
Guaranteed Income Supplement: In order to receive the GIS pension, you must already be receiving the OAS pension. The GIS pension is calculated based on your marital status and income, together they must not surpass a certain fixed sum. This is a tax-free benefit. [10]
Allowance: If an individual is married to, or has a common law spouse who receives OAS pension, they may apply for the allowance. If the combined sum of annual income does not surpass a certain/fixed amount and they are between the age of 60 and 64, they may qualify for an allowance .The allowance for survivors is a benefit for low-income seniors whose spouse or partner has passed away. [10]

Old Age Security Benefit Payment Rates
October - December 2011
Type of benefit Average amount (June 2011) Maximum amount Income level cut-off Income level cut-off for top-ups
Old Age Security pension $498.22 $537.97 N/A N/A
Guaranteed Income Supplement (GIS)
Single $453.38 $729.44 $16,320 $4,448
Spouse/common law partner of someone who:
does not receive an OAS pension $424.81 $729.44 $39,120 $8,896
receives an OAS pension $281.67 $483.68 $21,552 $7,456
is an Allowance recipient $375.27 $483.68 $39,120 $7,456
Allowance $387.13 $1,021.65 $30,192 $7,456
Allowance for the survivor $594.36 $1,143.78 $21,984 $4,448

Service Canada. (2011).Old age security benefit payment rates. Ottawa, ON: Service Canada.[10]

The Canadian Pension Plan (CPP): Is a retirement pension for individuals who have worked and contributed to the program. Individuals must be at least 60 years old in order to be eligible. The amount you receives varies depending on the amount the individual has contributed, in addition to the age at which they choose to retire. Presently, if you retire before 65, pension is reduced by 0.5% per month, up to a maximum of 30%. However, if you retire after age 65, the pension is increased by 0.5% per month, up to a maximum of 30%. [10]

[edit] Personal Saving for Retirement

Types of Personal Savings

Registered Retirement Savings Plans (RRSPs): This is the most popular form of saving for retirement.[8] An RRSP includes tax benefits that allow individuals’ savings to grow tax-free. Stocks, shares, bonds, and guaranteed investment certificates are all types of RRSP investments. The total sum deposited into an RRSP is deducted from an individual’s net income, which in turn lowers the applicable taxes.[6] Your earnings can be compounded until you want to receive the funds as income, allowing the investment to mature to the largest possible amount. RRSP’s are only taxed once a withdrawal is made.[10] A crucial aspect of RRSP’s is that the sooner an individual invests their money, the faster they can retire, as money can grow a vast amount over the years.[6] Note that leisure activities while you are retired can come at a cost so be sure to save according to your goals.

The Tax-Free Savings Account (TFSA): Is a program introduced Jan 1st, 2009. A TFSA is an investment opportunity for individuals who are at least 18 years old, who want to save for retirement. Investments in a TFSA are not tax deductible, and the TFSA account is not taxed, even when withdrawals are made. The maximum contribution limit for this account is $5,000 a year. The TFSA includes a carry-over feature where any unused area under the $5,000 cap is applied to future years.[9]

[edit] Leisure Activities in Retirement

When entering into retirement, seniors inevitably find themselves with more time on their hands. This increase in free time is often filled with participation in leisure activities. Retirement is the point of a person’s life where they can finally achieve goals they otherwise did not have time for. Retirement can lead to exploration of many different types of leisure activities. With the right financial preparation, there are many different types of leisure pursuits you can access. Different categories of leisure activities may contain benefits to cope with the aging process and maintain a higher quality of life. Physical fitness, social engagement and cognitive leisure activities may have benefits that one may not realize exist. For instance, Socially engaging activities may help to prevent depression and improve overall health, perhaps by reducing stress [11] In addition, cognitive leisure activities have been found to lower risk of Vascular Cognitive Impairment in old age. [12] Finally, physically stimulating activities can reduce depression, and may decrease risk of Alzheimer’s disease.[13] Filling free time with participation in such activities can ease the transition into retirement and help individuals to live a longer and fuller lives.

[edit] Socially Engaging Leisure Activities

Seniors keeping socially engaged

Social interaction is an important aspect of life to keep engaged in throughout old age. In old age, an individual’s social situation can have major effects on psychological well being.[11] Loneliness is a common obstacle for the elderly.[11] Studies have found that high systolic blood pressure was associated with loneliness in older adults.[15] High blood pressure is associated with cardiovascular disease.[15] Therefore, having an enriched social environment may help to lower blood pressure, and consequently reduce risk of other complications like cardiovascular disease.[15] In addition, research has found that 40% of the risk factors of depression can be attributed to a social network that is not stimulating. [11] Therefore, increasing prevalence of social interactions can help decrease the risk of depression.[11] Consequently, quality of life in old age can be improved by maintaining social interactions and staying involved with social activities.[11] Social activities can help an individual in old age remain cognitively healthy.[16] It has been found that elders who remained socially involved lived longer than those who did not. [16] In addition, elders who cannot remain physically active can acquire some of the same health benefits from regular social interaction. [16] During retirement, remaining socially engaged can help to fill the new time slot created when no longer working. Social engagement during retirement is an important factor to promote a healthy aging process and longer life.[17] Activities in the community that can promote social engagement include:

  • Group card game nights
  • Curling
  • Lawn bowling
  • Playing bingo
  • Volunteering
  • Getting involved in church activities

[edit] Cognitive Leisure Activities

Reading is a good example of a cognitive leisure activity

Participating in cognitively stimulating leisure activities during retirement can have positive effects on the aging process. Studies have shown that engaging in cognitive leisure activities contributed to lower risk of Vascular Cognitive Impairment (VCI) in healthy older adults.[12] Doing crossword puzzles in particular was found to help reduce risk of VCI with dementia in older adults.[12] Simply increasing the amount of leisure activities an individual engages in was found to help reduce risk of VCI.[12] Some examples of cognitive leisure activities that can be utilized to gain such positive effects include:

  • Reading
  • Writing
  • Doing crossword puzzles
  • Playing card games
  • Playing music [12]

[edit] Physical Fitness Leisure Activities

Seniors engaging in physical activity

In old age, physical activity has been seen to have many benefits to the aging process. Examples of physically stimulating leisure activities that may be appropriate for individuals approaching old age can include:

  • Tennis
  • Golf
  • Swimming
  • Bicycling
  • Dancing
  • Walking
  • Climbing stairs
  • Babysitting [12]

Regular physical exercise can decrease risk of depression and Alzheimer’s disease, along with improving quality of life, preventing falls, and increasing balance and strength.[13] It has also been suggested that aerobic exercise in particular may assist with visuospatial processing in older adults.[20] Researchers have found that 20 minutes of moderate physical activity and at least one hour of light physical activity seemed to be the best amount to optimize the overall health of older adults.[21] Men’s health benefits were associated with time spent doing the physical activity, whereas women’s health was affected by daily step count.[21]Remaining physically active but not overdoing it is important to the well being in older adults. Retirement can be the perfect time to get out and become physically active. Doing so can help to prolong a healthy life and a satisfying retirement.

[edit] Helpful Tools

Retirement Planning

Financial Planning

Leisure Activities

[edit] Notes and References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 Kloep. M, Hendry. L (2006). Pathways into retirement: Entry or exit? Journal of occupational and organizational psychology. 79. Pp. 569-593.
  2. 2.0 2.1 2.2 2.3 2.4 van Solinge. H, Henkens, K. ( 2008). Adjustment to and Satisfaction with retirement; two of a kind?.Pychology of aging. 23(2). Pp. 422-434.
  3. 3.0 3.1 3.2 3.3 Wang.M, Henkens. K, van Soling. H. (2011) Retirement adjustment a review of theoretical and empirical evidence. American psychologist. 66(3).Pp 204- 213.
  4. van Solinge. H, Henkens. K . (2005). Couples’ Adjustment to retirement: a multi- actor panel study. Journal of Gerontology. 60B(1). Pp. 11-20
  5. 5.0 5.1 5.2 5.3 5.4 5.5 O’Donnell. J, McWaters. G, Page. J (2004). Your life plan. In The Canadian Retirement Guide: A comprehensive handbook on aging, retirement care giving and health how to plan and pay for it. Pp. 25- 38. Toronto, Ont. Insomnic Press.
  6. 6.0 6.1 6.2 6.3 6.4 Bray, A. (1989). Financial planning for early retirement. Riverwood, IL: Commerce Clearing House Inc.
  7. McDonald, L. P., & Wanner, A. R. (1990). Retirement in canada. Vancouver: Canadian Cataloguing in Publication Data.
  8. 8.0 8.1 8.2 O’Donnell, J., McWaters, G., & Page, A. J. (2004). The Canadian retirement guide. Toronto, ON: Insomniac Press.
  9. 9.0 9.1 9.2 Question Retraite. (2011). Guide to financial planning for retirement. Quebec, Quebec: Question Retraite. Retrieved from http://
  10. 10.0 10.1 10.2 10.3 10.4 10.5 10.6 Service Canada. (2011). The differences between the OAS and the CPP. Ottawa, ON: Service Canada. Retrieved from
  11. 11.0 11.1 11.2 11.3 11.4 11.5 Golden, J., Conroy, R. M., Bruce, I., Denihan, A., Greene, E., Kirby, M., & Lawlor, B. A. (2009). Loneliness, social support netwroks, mood and wellbeing in community-dwelling eldery. International Journal of Geriatric Psychiatry, 24, 694-700. doi: 10.1002/gps.2181
  12. 12.0 12.1 12.2 12.3 12.4 12.5 Verghese, J. B., Wang, C., Katz, M. J., Sanders, A., & Lipton, R. B. (2009). Leisure activities and risk of vascular cognitive impairment in older adults. Journal of Geriatric Psychiatry and Neurology, 22(2), 110-118. doi: 42430147
  13. 13.0 13.1 Deslandes, A., Moreas, H., Ferreira, C., Veiga, H., Silveira, H., Mouta, R., Pompeu, F. A., Laks, J., & Coutinho, E. S. (2009). Exercise and mental health: Many reasons to move. Neuropsychobiology, 59(4), 191-198. doi: 10.1159/000223730
  14. O'Niel, D. (2009, January 03). Socialization. Retrieved from
  15. 15.0 15.1 15.2 Hawkley, L. C., Masi, C. M., Berry, J. D., & Cacioppo, J. T. (2006). Loneliness is a unique predictor of age-related differences in systolic blood pressure. Psychology & Aging, 21(1), 151-164. doi: 10.1037/0882-7974.21.1.152.
  16. 16.0 16.1 16.2 Cromie, W. (1999, Sept 16). Social activities found to prolong life. The Harvard University Gazette, Retrieved from
  17. Cromie, W. (1999, Sept 16). Social activities found to prolong life. The Harvard University Gazette, Retrieved from
  18. Grabmeier, J. (2010, August 30). Over 50? you probably prefer negative stories about young people. Retrieved from
  19. Rio. (2011, August 03). Best exercises for elderly. Retrieved from
  20. Bakken, R., Carey, J. R., Fabio, R. P., Erlandson, T. J., Hake, J. L., & Intihar, T. W. (2001). Effect of aerobic exercise on tracking performance in elderly people: A pilot study. Physical Therapy, 81(12), 1870-1879. doi: 5639100
  21. 21.0 21.1 Aoyagi, Y., & Shephard, R. J. (2010). Habitual physical activity and health in the elderly: The nakanojo study. Geriatrics Gerontology International, 10, S236-S243. doi: 10.1111/j.1447-0594.2010.00589.x

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