Some time ago, MoneySense Magazine chatted with actuary and pension guru Malcolm Hamilton about retirement.
In the article Hamilton stated the following:
“I was cautious and now have more than I need. I have no good use for the money, although I might if we have another 2008.”
At the time of the article’s print, Malcolm Hamilton was 63. He works as a senior fellow for the C.D. Howe Institute. He is one of Canada’s to-go experts for anything related to pensions and retirement.
I have to wonder by making such a statement, if Hamilton is duly encouraged about his own financial affairs largely because he saved “enough money” but also because he knew how to do so. Thanks to his trade, he understood long before most, spending less than you make, saving 10% of your net income (or more), and keeping your investment costs as low as possible for as long as possible, are some of the keys to financial freedom. Most Canadians are either unaware of these essential retirement building blocks and/or they cannot consistently execute on these gems of financial wisdom for various reasons.
The article goes on to quote Hamilton a bit more:
“Most of us will be able to get by with 50% or even just 40% of what we earned in our working lives.”
“No one can tell exactly how much we will need to save. Canadians are unduly and irrationally discouraged about their prospects.”
I think most Canadians should be worried about retirement. I know I am and I’m fortunate to have a good job with good benefits, benefits that include a pension, insurance and more. The thing with life is there are no guarantees or certainties. You also don’t know what you don’t know. That makes it essential to learn about personal finance and investing for your financial well-being, since nobody will care more about your financial future than you do.
I do appreciate the context of the article. The reality is unless you have the requisite knowledge to put together a well-designed financial plan and you can stick to this plan for decades on end you have every right to be discouraged about retirement. The discouragement begins with how much you should be reasonably saving, where to invest, using what financial institutions and products, how to disaster-proof your life and much more.
Do you have a comprehensive financial plan and if so, how did you figure it out? Who helped you?