What Will Your Retirement Look Like?

Before calculating a number, it's important to visualize what your retirement will actually look like. Consider these questions:

• What kind of lifestyle do you want? Will you live modestly, or do you want to travel frequently and enjoy luxury experiences?
• Where do you plan to live? Staying in your current home, downsizing, or moving to a different city can have a big impact on your financial needs.
• What are your expected expenses? Healthcare, hobbies, travel, and daily living costs all factor into your budget.
• Will you have other sources of income? Pensions, rental income, or part-time work can reduce the amount you need to withdraw from savings.

By answering these questions, you shift the focus from an arbitrary retirement number to a customized financial plan that supports your real goals.

How to Align Your Savings with Your Needs

Once you have a clear picture of your retirement lifestyle, the next step is to align your financial strategy accordingly.

1. Covering Essential Expenses

The first priority is ensuring you have enough to cover your basic needs—housing, food, utilities, and healthcare. Government benefits like the Canada Pension Plan (CPP) and Old Age Security (OAS) can provide a stable foundation of income.

If these benefits don't fully cover your needs, personal savings and investments must fill the gap. Understanding whether you'll rely on government benefits will also help determine the optimal age to start withdrawing them.

2. Funding Your Ideal Lifestyle

Beyond essentials, you'll want to plan for discretionary spending—such as travel, hobbies, dining out, and entertainment. This is where retirement savings and investment returns play a key role in providing financial flexibility.

For example, if you plan to take a trip to Australia in retirement, where should you withdraw from to cover the cost while minimizing taxes? Making the right decision can prevent unnecessary tax expenses and ensure you maximize your retirement savings.

3. Preparing for the Unexpected

Life is unpredictable, and retirement is no exception. Unexpected medical costs, home repairs, or helping family members financially can disrupt even the best-laid plans. Having an emergency fund or contingency plan provides peace of mind.

Being able to simulate unexpected expenses or a market downturn can be vital for ensuring that—even in extreme circumstances—you'll still be financially secure. You have a plan.

4. Leaving a Legacy (or Spending It All)

Some retirees aim to leave behind wealth for their children or charitable causes, while others prefer to maximize spending and fully enjoy their hard-earned money.

Your approach will shape how you manage withdrawals, tax strategies, and estate planning. A well-structured financial plan ensures that whether you're saving for heirs or focusing on spending, your money works exactly how you intend it to.

The Power of Knowing Your Financial Flexibility

Instead of focusing on a single savings goal, many retirees find confidence in understanding how flexible their financial situation is. This means knowing:

• How different spending levels affect long-term sustainability
  Example: How much longer will your savings last if you spend $50,000 per year vs. $70,000?
• The impact of different investment returns
  Example: What happens if you earn 4% vs. 7% in annual returns?
  Should you be more aggressive, or is a lower-risk strategy sufficient to meet your goals?
• How market conditions impact your plan
  If investment returns fluctuate, what adjustments would you need to make?
• How to make informed trade-offs
  Example: Is it better to downsize your home or work part-time for a few extra years?

Optiml helps retirees assess these factors, providing clarity on the real-world impacts of financial decisions. Rather than guessing whether you'll have "enough," you can see how different scenarios play out—helping you retire with confidence, not just a number.

Conclusion: Retirement Is About More Than a Number

There's no magic number for retirement because everyone's needs and goals are different. Instead of fixating on how much you need, focus on what you want your money to do for you.

By aligning your savings, government benefits, and investments with your personal goals, you can create a flexible and fulfilling retirement plan that works for you.

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