“Money may be the husk of many things, but not the kernel. It brings you food, but not appetite; medicine, but not health; acquaintances, but not friends; servants, but not loyalty; days of joy, but not peace or happiness.”
Henrik Ibsen

An article in a popular American publication recently listed its five tips for a happy retirement. The first was Financial Freedom. I agree that money does settle the nerves. I also know that it affords choices like taking a three-month trip to warm climates in the dead of a Canadian winter. On the other hand, I keep meeting retired people who tell me they are enjoying their retirement and yet are in debt.

A Harris Decima Poll turned up the following in that regard:

1. A whopping 14 percent of Canadians who are in debt, believe that they will NEVER be debt-free!
2. For those 65 years of age and over, 21 percent say they will die in debt!

Christina Kramer of CIBC says, “Carrying debt over the long term without a plan to pay it off means you are taking a risk with your long term financial goals, including retirement.” Despite this view, many people are retiring in debt. A CIBC poll found that about 42 percent of those 65 years old and over were debt-free. That means that 58 percent are not! Debt repayment on a fixed income can be a challenge but so can make interest payments, especially if they climb and income does not.

Retirement is like snakes and ladders

Lots of people get blindsided on the road to retirement. The financial setbacks that 2008 brought our way were very bad timing for many hoping to retire soon. I talked with one fellow who said that his losses added five more working years to his career if he wanted to retire with the lifestyle he and his partner wanted. For others, it is a health problem or sudden death of a spouse that sends the retirement plan reeling, a separation or divorce that splits the assets and sends the net worth of each partner down a hole, or a job loss or change of position that drains those assets that have accumulated.

Change happens

Like your GPS after a wrong turn, you may need to do some recalculating. Know that if you are in debt, you are not alone. Money coaches, credit counselors, and financial advisors can help come up with a plan to minimize the pain and adjust your lifestyle to the financial realities.

Some plan on working longer, winning the lottery, or using their home as a retirement plan. Some realistic plan is better than just blind faith.

We all need a purpose

The second tip in that article was.. Have a Purpose. Some folks look forward to freedom so much that they do not think about their sense of meaning and purpose. Retirement Shock comes with a loss of routine, no or little interaction with workmates, exhaustion or burn-out, a lack of planning, no replacement activities, and a sense of loss, alienation, disconnection, and identity. Who am I now and how do I count?

Related article: The power of purpose

So often, money has been the goal post and the scorecard. At retirement, the game changes. Many advisors say that they cannot convince retirees to stop saving and making risky investments. They cannot get them to make a spending plan. It is just such a big mindset switch. They are not ready to think about a legacy or even how they want to live their life at this stage.

When I started doing Retirement Readiness courses, I did not expect to see people who were already retired but I often do. They had not done the planning ahead of time and are getting around to figuring out what their plans and purpose are after the retirement fact.

Better late than never. Freedom can be vast and daunting and expensive. Think about what the kernel of freedom is for you!