Consider the words of Charles Kettering:
“My interest is in the future because I am going to spend the rest of my life there.”
The future begins now. You know why?
Today is the tomorrow that you talked about yesterday. Meaning the future is not
far off. It is every second rolling by. And before you know it, it’s going to be here! It is at this stage that regrets begin to set in for those who did not plan for the future.
The understanding that we had in the olden days was that retirement is that time of your life when you actually do nothing. However, that perception is changing slowly around the world. That idea of retirement does not apply to life in Canada. Retired life takes different meaning here – it can mean a life free of financial worries, a life to travel, spend time with your grandkids.
Most people erroneously think that retirement is still a long way off while some also believe that retirement is for senior citizens and since they don’t yet belong there, it is not a topic they are willing to consider.
Retirement is not a phase it is a continuum of the journey. Why should we wait for the years to advance before planning for retirement?
The Teachers Insurance and Annuity Association of America (TIAA) did a study and came up with 3 major things that Americans look for in retirement, which are:
- Freedom from financial worry.
- Flexibility to do whatever they want.
- Relaxation time with family and travel.
This pretty much summarizes what most mortals look forward to in retirement and it isn’t about being American or Canadian. We all want the freedom to do what we really want to do as an extension of absence of financial worry.
The Immigrant Narrative
Most immigrants relocate to Canada in midlife. The implication is that our plans for retirement must be an aggressive one. For us we have to make our bed as we lie on it. We can’t afford to do otherwise by following the template of those born here or who moved here before the age of 18. For one, our life expectancy may have been compromised already even before coming here which forces us to think differently. Also, many of us inadvertently fall into all kinds of debts as we take on loans while trying to settle down into our new environment.
- Get as less debt at possible. Do not get sucked into the credit whirlpool.
- Slowly get rid of the debt or try to find your way out of it. Having a debt is like fetching water in a basket which is leaking. Invest in something where you can have return or a non-leaking basket.
- Cut short your mortgage. Most of our biggest investment is on the house where we pour money every month thinking that’s our asset. Let’s be clear, it is not because it is taking money out of your pocket. Who owns the property? It is the banks. You only swapped landlord.
- Dig your way out of that debt. How? There are many ways to get out of the mortgage earlier. Start with a higher down payment if you have the means to do so, pay higher every month if you can, double up on the loan. Explore those options with your lender instead of getting stuck with the only deal they give you.
- Create an emergency fund. Think of unusual circumstances when you might not have the constant flow of income and put aside some money that can see you through six to twelve months. Let’s call that “peace of mind fund.”
For first generation Canadians there is a need to redefine what retirement means as we begin a new life in a new country a little late in our life. Pick a date for retirement and walk back from there. It is easier said than done but needs to be done, nonetheless.
How then should you approach your retirement planning?
- Consider your age: How old are you? At what age do you plan to retire? Since majority of us come here in middle age we must plan differently.
- When do you want to retire? Think about the time you want to stop working and be free of financial worries.
- Consider lifestyle plan: What will retirement look like for you? Consider the choices. Some people go for volunteering, some learn new skills, others become mentors, some travel, some rekindle old hobby that dropped due to career, some choose to continue to work, and some get active in social life etc.
- Consider your health: Get a checkup done. Understand your vitals and what you need to watch out for. That will help you in planning and focusing.
- Consider your responsibility towards your kids and people around you. Where are they in life? Do you have to support them? Are they able to support you?
- Create a retirement fund. Start with keeping aside some percentage of your earning.
- Get a life insurance. This will come handy in times of crisis when you did not think of all that could go wrong particularly when it comes to your health.
- Create a will. As scary as it sounds, yes you will leave the world behind. A will helps the people you leave behind.
There is however no one size-fits-all for immigrants but there are valid steps we can all take. The Immigrant Life offers you an immense wealth of guidance in the Episodes 93 and 94 of the podcast series.
Listen to the podcast here.
This article was written by Meena Kaini.