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Four Key Questions

Your retirement picture has four corners: who, what, where and how. By giving careful consideration to these four corners, you’ll help shape your retirement picture. Once you understand what you want retirement to look like, you can take steps to make it a reality. It is important to consider not only your finances, but what steps you can take to give your life in retirement meaning, satisfaction and a sense of purpose.

Who will you spend retirement with?

Many of us envision spending a long, comfortable retirement with our spouse. But that’s not always the case. You might be single and planning to retire on your own. Or you could end up caring for a dependent child or elderly parents, or both. Who you spend retirement with will affect what you do, how much it costs, and whether you’ll be able to share expenses.

What will you do in retirement?

You might choose to spend your retirement at home with family or friends, or travel the world. You might even want to start a business, work part-time or go back to school. But no matter what the big picture looks like, you’ll also have to think about your daily life during a retirement that could last 20 to 30 years. How will you fill each day? Will the things you enjoy now—perhaps hobbies, volunteering or working—bring satisfaction in retirement?

Keep in mind that some retirement pursuits, such as travel or school, can be expensive. You’ll need considerable cash to finance that kind of retirement. On the other hand, retirement at home can be less costly. And if you start a business or spend part of your time working, you’ll supplement retirement income.

Where will you live?

Where you live will shape your retirement lifestyle, and affect how much you spend. If you stay in your current home and have no mortgage, living expenses may not change much. If you sell your home and downsize, you’ll free up additional capital for retirement. Or perhaps you can free up cash for other retirement pursuits by selling your home in the city and living in a cottage or other vacation property.

Becoming a “snowbird” is another popular choice. By splitting your time between Canada and a warmer climate in the winter you’ll have the best of both worlds. Some of us dream of permanently moving from Canada to a warmer climate, or back to our homeland.

Where you live not only influences what you’ll spend, but can affect other areas of your finances, such as taxes. For example, moving outside Canada requires comprehensive tax planning.

How will health affect your plans?

The state of your health is a key consideration in retirement. Health issues can restrict your retirement options and result in higher medical expenses.

Are you in good health now and likely to remain that way as you age? Does your personal or family medical history indicate that health and health care could be a problem down the road? Do you already have health issues that you know will affect retirement? The answers to these questions can influence where you live, what you do in retirement and how much income you’ll need. And remember, there are no health guarantees, so a contingency plan for health care is a must.

Retirement Resources

  1. Use our online planning tool to build your retirement picture and discover the potential financial implications.
  2. Discuss your retirement picture with a BMO investment professional and develop an action plan to address any financial implications.

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