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B8 G T H E G LO B E A N D M A I L • T U E S DAY , J A N U A RY 1 2 , 2 0 1 6• REPORT ON BUSINESS

RETIREMENT REALITIES

Everyone knows that “freedom55” has turned out to be more

marketing slogan than reality formost. But there are still an envi-able few who are able to realizethe dream.

Cathy Bernaerts is someonewho made it to the finish line, re-tiring three years ago just beforeturning 56.

In making the decision to leaveher position as director offinance and operations at Missis-sauga-based Edwards Lifesciences(Canada) Inc., she consideredthree factors: family, financesand her future.

For her, it was the first consid-eration that carried the mostweight.

“My husband, Michael, is 13years older than I am and was al-ready retired,” says Ms. Bernaerts,who lives in Collingwood, Ont.“He wanted me to retire as wellso we could spend some qualitytime together and do some of thethings we had always wanted todo.”

At first she resisted.She loved her job and relished

working as part of a team in adynamic company with interest-ing products. But she was puttingin 12- to 14-hour days in a high-pressure environment, and even-tually gave in to the argumentthat the stress might end up

affecting her health.“The first year of retirement

was a challenge, and I struggledtrying to figure out what I wasgoing to do,” she says.

“I relaxed, but I didn’t feel thatpressure to get up in the morn-ing,” she says. “I didn’t feel like I

had a purpose.”Eventually, however, she settled

in to a routine that some wouldconsider a picture-perfect retire-ment – golfing, exercising, travel-ling and wintering in Florida withher husband.

“I’m happy with life these

days,” she says. “So it all workedout.”

For Ms. Bernaerts the key tothis satisfying outcome wasadvice from a financial planner,Anna Knight of InternationalCapital Management in Toronto.

Ms. Knight says most of her re-tirement-planning clients are 50and older and that about half ofthem consider retiring beforethey reach 65.

The ones most likely to do soare those with pension plans,especially the fast-vanishingdefined-benefit kind.

“My job is to make sure theyare financially secure before theydo it,” she says.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trim your spending

Her first step in the planning pro-cess is asking clients to trackthree months of expenses andexamine the results line by lineto separate essential from non-essential spending. Then she asksthem to subtract how much ofthe essential spending is likely todecrease when they leave theworkforce.

Next they add a cushion foremergencies and things likehome repairs. Ms. Knight advisesclients to make sure the essen-tials are covered by pensions orother income streams they cancount on.

The next step is estimating howmuch discretionary spendingthey will need to support the life-style they envisage. The discre-tionary amount, which willfluctuate over the years, cancome from their savings andinvestments.

Then she advises clients aboutinvestment products designed tomeet their goals. (While she isused to working on commission,she also has fee-based servicesfor people who just want her todraw up a plan.)

If the numbers work, Ms.Knight tells clients they are in afinancial position to retire, how-ever early it might be.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mental preparedness also key

But money, she stresses, is onlypart of the equation. Mental pre-paredness is another. She some-times asks clients to draw up alist of all the things they want todo in retirement that theyhaven’t had time for while work-ing, and then to consider howthey plan to manage their timeto fit them in.

“Some people just want to beable to go out for coffee duringthe day or go for a bike ride whenit’s nice outside or work in theirgarden,” she says. Others plan towork part time, take up a hobbyor give back to the community.

“I have one client who is a re-tired teacher who used to call meand say, ‘I’m kayaking on theHumber River in the middle ofthe day!’”

Anne Brandt, a fee-based finan-cial planner in Coquitlam, B.C.,follows a similar approach indrawing up retirement plans butdoes not sell investment prod-ucts or offer investment advice.She says the bulk of her clientsare between 55 and 60 and oftenwant to know the earliest age atwhich they can retire.

“I get people to focus on gettingrid of their mortgage and otherdebts,” she says.

“And then we go from there. Ifthey can’t meet their retirementgoals, we look at what they needto do to adjust. Everyone, ofcourse, would like to maintaintheir current lifestyle in retire-ment.”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Retiring at 55 ‘the exception’

Most people she counsels havedone some sort of planningbefore they end up in her office.But she sees many who say theyfound it hard to save during theirchild-rearing and house-buyingyears, especially in areas of high-cost real estate.

The near-financial collapse of2008 is another thing keepingsome people in the workforcelonger than they had imaginedthey would be.

“I did do a plan for a couplewho retired at 55 with no chil-dren and good government pen-sions,” Ms. Brandt says.

“They have retired and they aredoing well, but they are not thenorm. They are the exception.”

As for Ms. Bernaerts, she hascome around to her husband’sway of thinking that there’s moreto life than work.

It’s not that she never worriesabout money – she occasionallydoes, especially with her defined-contribution pension and marketuncertainties.

But she has Ms. Knight to reas-sure her that the money will last.

“It’s important to have a plan-ner,” she says. “Anna gives methe assurance that we’re going tobe okay.”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Special to The Globe and Mail

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PLANNING

Want to retire at 55? Prepare for a deep diveMeticulously tracking expenses, examining income sources and thinking about your lifestyle are the key steps, planners say

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SUSAN SMITH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Anna Knight, a financial planner with International Capital Management, asks her clients to categorize theirspending and figure out which streams of income will support which expenses. KEVIN VAN PAASSEN FOR THE GLOBE AND MAIL