** Edited by
Baha and Margaret Habashy
The Challenge
Retirement doesn’t just happen—it must be planned. Without a clear roadmap, you risk outliving your savings, delaying your dreams, or becoming a financial burden to loved ones. Inflation, health costs, and unexpected life changes can derail even the best intentions. A thoughtful retirement plan gives you peace of mind, financial freedom, and the ability to enjoy your later years with dignity, security, and purpose. Don’t leave your future to chance.
Meet Mark and Lisa
At 55, Mark and Lisa found themselves staring at a future they hadn’t prepared for. They had spent their lives working hard—Mark as a contractor, Lisa as a school administrator—raising two children, paying the mortgage, and helping with college fees. Retirement had always felt like a distant horizon.
But now, it was close—and terrifying. One quiet evening, Mark glanced at his thinning portfolio and said, “Lisa, I’m not sure we can retire at 65.” They had no clear retirement plan, only a patchwork of savings, a modest RRSP, and rising living costs. Their home held equity, but they still had a mortgage. Vacations, a second car, and helping their aging parents had slowly eaten into what they’d hoped to save.
Lisa felt overwhelmed. “We’ve always talked about retiring by the lake. What if we can’t afford it?” she asked.
Without a plan, they were guessing—how much they needed, how long their money would last, and what they’d do if health issues arose. The lack of clarity was robbing them of peace.
That night, they made a decision: no more guessing. It was time to face the numbers, seek advice, and take control—before retirement controlled them.
BIBLICAL INSIGHTS
Proverbs 21:5 “The plans of the diligent lead to profit as surely as haste leads to poverty.”
Careful planning and consistent effort lead to success. When it comes to finances, rushing or acting without thought can result in poor outcomes. Good stewardship includes planning for the future—like retirement—wisely and patiently.
Luke 14:28 “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?”
Explanation:
Jesus teaches the importance of counting the cost before starting something important. This applies to managing money and preparing for retirement. Wise stewards think ahead and plan realistically.
Proverbs 13:11 “Dishonest money dwindles away, but whoever gathers money little by little makes it grow.”
Building wealth slowly through honest, consistent saving is wise. Retirement planning works best when you save regularly over time rather than seeking quick wins or shortcuts.
Matthew 6:19–21 “Do not store up for yourselves treasures on earth… But store up for yourselves treasures in heaven… For where your treasure is, there your heart will be also.”
While financial planning is important, it’s not the ultimate goal. Our hearts should be centred on eternal values. Stewardship means managing money well while using it to serve God and others.
THOUGHTS AND TIPS
The following explains the structured approach we have taken in creating this financial planning tool. For simplicity, you will find the key questions we used with an explanation of why each one is essential to creating a sound long-term retirement plan.
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1. Family Information
Key Questions:
- What are your names, current ages, and target retirement ages?
- How many children do you have, and what are their ages?
- What are your total annual living expenses today?
- In which country do you reside?
Why It Matters:
Family structure affects both the timeline and duration of retirement needs. Understanding the number of dependents and living expenses helps in estimating future financial commitments and the length of post-retirement support needed. Country of residence impacts tax rules, healthcare, and pension systems.
2. Income & Taxes
Key Questions:
- What are your current salaries?
- What are your expected annual salary growth rates?
- What is your applicable income tax rate?
- Do you expect any annual commissions or bonuses?
Why It Matters:
Current and projected income affects your saving capacity and future lifestyle. Understanding taxes helps determine net income available for savings and expenses. Bonuses and commissions may offer opportunities for lump-sum savings or investments.
3. Assets & Investments
Key Questions:
- What are the balances in your retirement savings (RRSP/401K)?
- How much do you have in tax-free or Roth accounts?
- What is the value of your taxable investment accounts?
- How much have you saved for your children’s education?
- What is the current value of your home?
- What other investments do you hold?
- What are your expected investment return rates before and after retirement?
- What inflation rate are you projecting?
Why It Matters:
Assets determine your net worth and income-generating potential during retirement. Proper diversification and growth assumptions help project future value. Inflation assumptions are crucial for maintaining purchasing power over decades.
4. Liabilities
Key Questions:
- What is your current mortgage balance, interest rate, and years remaining?
- Do you have any other debts (e.g., car loans, credit cards)?
Why It Matters:
Debt impacts your monthly cash flow and net worth. Understanding your liabilities helps manage risk and structure a debt-repayment strategy before retirement, when income may decline.
5. Savings & Contributions
Key Questions:
- What % of your income do you contribute to retirement savings?
- How much are you contributing annually to each child’s education fund, and for how many years?
- What is your target emergency fund?
- Are you making other planned savings or investment contributions?
Why It Matters:
Savings habits are a predictor of retirement readiness. Contributions to education, emergency funds, and investments must align with long-term goals while leaving enough room for retirement accumulation.
6. Major Future Expenses
Key Questions:
- How often do you plan to buy a new car, and at what cost?
- When do you expect to replace the roof and appliances, and at what cost?
- What do you expect to spend on weddings and celebrations?
- What are your travel and leisure expectations in retirement?
- What long-term care (nursing home) costs do you anticipate for each spouse?
Why It Matters:
These are non-recurring but significant costs that can derail your plan if not anticipated. Long-term care and lifestyle choices especially affect withdrawal rates and longevity of funds.
7. Retirement Assumptions
Key Questions:
- What percentage of your current living expenses do you expect to need in retirement?
- What is your assumed life expectancy?
Why It Matters:
Spending assumptions and lifespan define how much you need and how long it must last. Underestimating either can lead to outliving your resources.
8. Social Security, Pension & Passive Income
Key Questions:
- When will you start receiving pension or social security benefits, and how much?
- What passive or part-time income do you expect after retirement (e.g., annuities, consulting)?
Why It Matters:
These income sources provide stability and reduce pressure on retirement savings. Knowing amounts and start dates helps calculate the required drawdown from investments and allows for bridge funding strategies.
Summary
Each of these categories feeds into a comprehensive retirement model. High-quality inputs enable more accurate projections, better risk management, and ultimately, a plan that provides both security and flexibility through retirement.
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** Note: This blog content was developed with help from ChatGPT 3.5. The story, names and images are for illustration only.
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