I recently had a reader write saying that the only people who understand retirement are people who are retired. I think there is some truth to this so I went to some of my clients who are already retired to try to find out what things they thought were keys to a successful retirement.

1. Plan ahead. John and Sylvia have recently retired and despite the state of the markets, they are grateful they planned ahead. It was through planning that they set some goals and determined what they needed to do to retire. Their circumstances have changed over the last 5 years but the plan kept them on track and their goals were reached. Too many people fail to plan their retirement properly.
2. Be conservative in your assumptions. Assumptions are an important part of any retirement plan. Too often assumptions do not leave room for variability or margins of error. According to John and Sylvia, “it is better to be conservative with your assumptions for rates of return, inflation and spending. Specifically, we are thankful that we did not project our investment returns at 10% to 15%.”
3. Have a diversified portfolio. Ray and Betty have been retired for only 2 years. They are concerned about their portfolio but are happy that they added some income trust investments to their portfolio for income. In their words, “Make sure you have a diversified portfolio of investments. We have a diversified portfolio of GICs, bonds, equities and income trusts. At a time when stocks are losing money, we are very happy that we have other asset classes to balance the portfolio.”
4. Account for inflation. For Suzanne, a widow in retirement, it was enlightening to find out how inflation impacted the future income needs in retirement. She says, “For the last few years, my costs have been increasing steadily and I have had to make some adjustments to my income. My hope is that everyone planning for retirement makes sure they account for higher costs of living.”
5. Develop hobbies and interests before retirement. For Larry, retirement came as a result of some downsizing by his company. Although he was somewhat prepared financially, he found himself with too much time on his hands. It took Larry a while to fill his time with interests and activities. His advice is to plan what you want to do with your time before you actually retire.
6. Understand the sources of retirement income. Jill attended a seminar because she was thinking about retirement. For Jill, she was unsure where she was going to get income from in retirement. With a little planning, Jill determined that she would benefit by taking Canada Pension Plan early. For Jill, she was completely unaware of the rules surrounding the government benefits. Jill thinks everyone should know about your sources of income whether it is pension plans, RRSPs or government benefits.
7. Minimize tax. Phil and Sue have been retired for over 10 years. For Phil and Sue, they made some changes a few years back that has changed the way they think about finance and investing in retirement. “It is so easy to get caught up worrying about safety of capital in retirement when really the focus should be on minimizing tax. The bottom line is good tax planning made a huge difference to our retirement.”
8. Be conservative when it comes to investing. Rose has been retired for quite some time and financial advisors have always tried to convince her that GICs were too conservative and that she was missing out on higher potential returns from other investments. For Rose, she thinks her success comes in the fact that she stayed conservative and lived a modest life. “It is times like these that I can sleep at night. Sure, I don't spend money foolishly but I am not losing 30% like some of my friends. Retirement is about living a comfortable life with what you have.”
9. Live a healthy retirement. It sounds all too obvious but for Marvin, he had a heart attack only 2 years into his retirement. Today Marvin is much more conscious of what he eats and makes sure he goes out walking at least three times a week. The healthier you are, the longer you will likely live and the more you will enjoy your life. You can have a lot of money, but if you don't have your health you really can't benefit from a lot of your money.
10. Just be happy with what you have. According to Susan, retired for 21 years, “It is so easy to get caught up in the wants of life and too often people, (especially you young ones), don't appreciate what they have. I don't have a lot of money but I have enough to get by. I've had a good life and the one thing that is very important to me, is my family. They bring joy to my life.”

So there it is . . . a little advice from some experts. Living proof that retirement can be the best years of your life.