How Many Years Will I Spend in Retirement?


As our life-expectancy increases, North Americans are spending more time in retirement than ever before.  An essential part of financial planning is to recognize how many years you will spend in retirement.

In 1921, the average life expectancy at birth for a Canadian male was 58.8 years. At that time the Ford Motor Co. had a mandatory retirement age of 65.

Clearly for many employees, this mandatory retirement age was just a notional concept.

It certainly made financial planning easier.

Today, many people retire (whether by choice or not) somewhere around 60 to 65.

Based on a United Kingdom study, for someone aged 62, a man has a 52-per-cent chance of living 20-plus years, and a 14-per-cent chance of living 30-plus years. For a woman, she has a 67-per-cent chance of living 20-plus years, and a 26-per-cent chance of living 30-plus years.

Based on these numbers, most Canadians today would want to plan for a retirement of 30 years, to be conservative.

In a related note, how many Canadians expect to actually have put in more than 40 years in the work force? Given how many people don’t even start careers until their mid-20s, that means that effectively, each working year must cover not just today’s expenses, but provide for nine months of retirement as well.

That is a daunting thought.


The purpose of this little walk through Retirement 101 is not to scare people, but rather to encourage people to think differently about their future or current retirement.

Questions that need to be asked might include:

• If still working, do I need to think about ways I can work beyond my early 60s?

• If retired, am I going to be OK if I/we live into our 90s?

• Am I saving enough towards retirement?

• What is my world going to look like in 25 years?

To help with some of these questions, below are a few websites that provide some depth on the topic.

They include:

• How long will I live calculator – from University of Pennsylvania

• A great article and site with a variety of longevity charts, from a Cambridge mathematics professor

• How much money will I have at the end? This is a calculator my firm put together. It assumes that you live to a full life expectancy.

Not surprisingly, the world has changed an incredible amount since 1921. In fact, it feels like the rate of change is increasing. It is because of this rate of change that a 30-year retirement can bring a lot of unexpected situations. The more you understand your own situation, lifestyle, income, and longevity, the better prepared you will be.

Who knows? Maybe the Ford Motor Co. plant will be hiring 75-year-olds in 20 years.

Tips to Manage your Parents’ Money


For an adult child, being asked by your parents’ to manage their money can be a potential minefield. If  you have stayed out of your parents’ financial decisions until this point, it can be overwhelming to even know where to start. In addition, conflicts may arise with your siblings, other family members or parents themselves if others are not happy with your financial management style.

Whether it is for power of attorney situations or because your parents’ simply feel more confident having you take charge, tread carefully and keep in mind these four rules:

1) Understand the full financial picture.

Like any financial planner, you can’t do a good job managing someone’s investments unless you understand their situation, including how much risk they need to take, their annual expenses, income, assets and their personal risk tolerance. If you are not able to communicate or have access to the whole financial picture, then you simply can’t do a good job. Do not wait for an emergency or an illness to get yourself involved. Encourage them to explain to you their full financial picture now so you can be ready. Sit down with your parents and gather all important information (such as account numbers, passwords, company affiliations etc) in a document like the  Tridelta Financial Planning Questionnaire.

2) Don’t be afraid to use a professional.

Even if you manage your own money, you may want to work with a professional when handling your parents’ money.

There are three reasons for this:

  1. It takes some of the responsibility and burden off of you and your siblings might be more comfortable in this setting
  2. A good financial planner can often provide a wider range of insurance, investment, savings and tax options than you might be able to on your own
  3. A planner in emotionally removed from the money. Especially when managing your parents’ money, emotions can wreck havoc on investment decisions
Managing your Parents' Finances can be complicated

Photo: kenteegardin

3) Know how much capital is needed to support your parents.

If a parent might reasonably live to age 90, plan for age 95 and know the capital requirements. If their current amount won’t cover potential needs, you might be restricted in taking risks. However, if someone only requires $350,000 in income and has $1 million, it might be a mistake to be too conservative. Manage the necessary capital safely, but the other $650,00 should be managed based on a higher risk tolerance (for example, don’t make the mistake of an all-GIC portfolio).

4) Communicate with other family members.

In almost every case, there will be some criticism from other family members of how you are managing things. It is one of the reasons why it is sometimes better to hire a professional to take the heat. In any case, you can minimize criticism by communicating what you are doing, why you are doing it, and to get notional buy-in.

While it is a big responsibility to manage your parents’ money, remember these four tips and remember the ultimate reward of this: you parents’ and family’s appreciation.