Conquer Your Middle-Aged Money Worries: Why Now’s the Perfect Time to Plan for Retirement

One of the benefits of an exciting life development, like changing jobs, is having an excuse to make the time to catch up with old friends and colleagues. It was on one of these catch-up coffees that I sat across from a former colleague who was, like me, also in his 40s. I shared with him some of the key highlights of the first few months on the job. When I mentioned the importance of a strong Wealth Plan as a key part of the overall Investment Management process, and how much someone like us may need to save for retirement, his face turned a bit pale. “How much do I need to retire, and when should I start saving?” he worried.

This is a common concern for many “middle-aged” individuals (between 40 and 60). We’re often at the peak of our careers, but also juggling family responsibilities, caring for aging parents, trying to keep an active lifestyle, maintaining a social life, etc. With all these conflicting pressures, it’s easy to get caught up in the day-to-day whirlwind of life and put long-term planning on hold. I hear it all the time from friends and acquaintances: “in five years when x changes, then we will be able to really start saving for retirement”. To further support my observations, a recent FP Canada survey found that over half of Canadians under 55 prioritize short-term goals like travel and dining out, over saving for retirement¹.

Why Your 40s Are Prime Time for Wealth Planning

The salient point of this article is that financial decisions made during this stage can significantly impact your future. The truth is, your 40s are some of the most crucial years for financial planning. Here’s why:

• Time is on your side: You still have the time to adjust and optimize spending, savings and investment goals and ultimately make any adjustments required if you are falling short.
• Informs key decisions: Will you make that costly home reno, or take on debt and upsize your house? Private school vs. public? Can you buy that vacation property you always dreamed about? A Wealth Plan will help you find the answers.
• Develop an achievable plan: A Wealth Plan helps you understand your current financial situation and set achievable savings targets.
• Peace of mind for the future: By planning ahead, you can reduce financial stress and enjoy greater peace of mind about your retirement years.

What is a Wealth Plan and how will it help? A Wealth Plan is a personalized roadmap to help you reach your financial goals. Meeting with a Nexus Wealth Planner will allow them to understand your unique financial situation and conduct a comprehensive analysis. The result of our Nexus Planning Process is that it enables you to make informed decisions with confidence and achieve peace of mind about your financial future. Importantly, it provides a specific action plan for achieving your objectives.

Key points to consider when creating a Wealth Plan during middle age:

• Retirement Planning: When do you want to retire? Do you know how much you need to save to maintain your desired lifestyle? Have you factored in healthcare costs?
• Estate Planning: Do you have a will and power of attorney in place?
• Investment Strategies: Does your investment mix align with your risk tolerance and time horizon?
• Risk Management: Are you financially prepared for unexpected events (e.g. job loss)?
• Tax Efficiency: Are you taking advantage of tax-sheltered savings accounts like TFSAs, RRSPs, and FHSAs?
• Debt Management: Can you strike a balance between paying down debt (e.g. mortgages) and saving for retirement?
• Reduced Dependence on Inheritance: Don’t rely solely on inheritance for retirement. Increased life expectancy and inflation can strain your parents’ retirement savings.

Overall, it is never too early – or too late – to take control of your financial future. In fact, the bigger risk is waiting for the opportune time when your circumstances are “right” to start. That time is likely never going to come – or you simply won’t realize it when it does. By working with a Nexus Wealth Planner you can create a plan that brings you financial stability, freedom, and peace of mind. Reach out to us today to find out how to get started!