10.1.1 Different approaches and needs

Here's a sampling of Canadians and their different approaches to saving for retirement.

Marlene carefully saved for her retirement by investing a portion of her salary in conservative investments. She had a company pension as well as a government pension plan. After her husband died, she sold the family home and moved into a condominium downtown. It was actually a step up in price from her suburban home, but she loved the excitement of living in the city, and she figured she had enough saved to cover her monthly fees. Then the condo administration sent a notice saying that the building needed major repairs, and everyone was being assessed $10,000. Marlene's retirement planning had not included an emergency fund. She wasn't sure if she could continue to live in her dream home on her fixed income.

Marlene is not prepared for major expenses after her retirement.


Vivianne and Tim took early retirement and set off on the trip to Asia that they'd always dreamed about. It was expensive, but they had good pensions and ample savings. When they got back, however, things began to change. Vivianne's parents' health declined and they needed costly nursing care. They hadn't purchased long-term health insurance, so Vivianne had to pick up the cost. Then Vivianne and Tim's son, Philip, lost his job, and he and his wife and baby moved back home. Philip received employment insurance for a while, but his wife had left her job when she had the baby. Soon they had no income. Vivianne and Tom had to help support them, too. "I guess this is what they mean by 'the sandwich generation,'" Vivianne said. At 63, she was considering going back to work.

Vivianne and Tim have to change retirement plans to look after their parents and their children.


As a young couple, Juan and Elena were just getting by on their two salaries. With two children, house payments and all the other expenses of daily life, Juan didn't see how they could afford to put aside anything for retirement. Besides, he argued, that was far in the future. Why not wait until they were making more? But Elena insisted. She saw her own parents struggle during their retirement years. So every month, she and Juan each put $200 in a savings account, and then invested it in their RRSPs. By the time they were ready to retire, in addition to their pensions and other government benefits, they had $300,000 saved in their RRSPs. Juan admitted that Elena was right. If it had been up to him, they wouldn't have saved enough.

Juan and Elena build financial security by putting aside some money each month.


Edward loved his work and didn't want to retire. After all, he was in good health and his mind was sharp. He worked until 70, and then looked at his retirement savings. He had a pretty good nest egg and figured it was enough. "Surely I won't live much past 85," he thought, "and if I make it that far, I won't be doing much, so it won't cost much to live." To his surprise, though, Edward remained healthy and active for years. He hiked. He skied. He travelled. He visited friends all over the world. By the age of 82, he was still going strong, and there was plenty he wanted to do. But his retirement savings didn't cover these plans. He had enough to live on, but not enough to continue his adventurous lifestyle. He started cutting back on his activities.

Edward has to cut back his lifestyle when his money begins to run out.

Which of these scenarios could be a possibility for you in the future, considering your current retirement planning?

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