I like to think I’m in the FIRE group – that’s financial independence, retire early, Rob Carrick writes.Blair Gable/The Globe and Mail
You have instant community when you retire – just go to a mall, diner or blood donation clinic early in the morning on a weekday.
Retiring is stepping into a different life with different rules. Let me tell you about a few of them based on personal experience.
I retired – we’ll get back to that word shortly – from my full-time Globe and Mail column-writing gig on Friday, June 28 at age 62. The following Monday I went to a mall in Ottawa, where I live, to take care of some mobile phone business. Not everyone I observed there was retired, but I’m guessing most were – based, in part, on their leisurely pace.
That’s the first way retirement differs from your working life: Regardless of your financial status, you’re rich in time. You can do what you want, when you want. And so, you go to the mall when it’s emptiest.
Same for going out for breakfast. I met a friend for a morning run on a weekday and we went to a nearby diner afterward. Behind our outdoor table, a trio of retired guys gabbed at the exit. It was the same deal at the blood donation clinic – all men and women (of an older demographic) with the flexibility to take care of business at non-peak hours.
Eight lessons learned in 27 years of covering personal finance and investing
For me, the most jarring retirement shift lies in the management of our week-to-week finances. Thanks to our different pay schedules, my wife and I were fortunate to have a paycheque arriving every Friday, which vastly simplified the job of managing household cash flow. Just survive seven days and more money would arrive. Now, some of our income comes monthly, as modest pension payments. (I’ll have more to say on pensions, so stay tuned for future columns from me on the view from “retirement.”)
Getting paid monthly means new thinking on how to save for big expenses. Right now, I’m carving off some of those monthly payments as soon as they’re received to cover recurring costs such as property taxes, insurance premiums and utilities. We have separate savings accounts for these, each labelled specifically. I find this really helps with organization.
Another expense to be covered is income tax, which brings us to one more way retirement differs from your working life. If you have an employer, the correct amount of taxes for your income is taken off the top of your paycheque. You may have a balance owing to Canada Revenue Agency when you file your annual income tax return, but it shouldn’t be anything unmanageable.
My wife and I both have a 15-per-cent withholding tax applied to our pension payments. I set up yet another high-interest savings account to hold the additional amount of tax we expect to owe after we file our 2025 tax return next spring. With each pension payment, money is automatically transferred to that account.
As Rob Carrick retires, he answers all your personal finance questions
One more expense I’m trying to cover off with monthly savings is health care. I know that some retirees buy health insurance to cover the costs of dental work as well as expenses not covered by provincial plans. But when I asked financial planners for their thoughts on this option several months back on LinkedIn, the response was unenthusiastic.
My fave comment: “I usually ask my clients if the plan provider is in the business of losing money.” We’ll self-insure instead by keeping a separate health spending account.
One more life adjustment when you leave the full-time workforce is how the word “retirement” sounds to your ears. Telling people you’re retired earns you all kinds of reactions – some envy, some surprise and some disapproval from those who can’t imagine their lives without the fulfilment and status of a job.
There are a few alternative phrases to retirement that I’ve come across – rewirement and findependence, for example. I like to think I’m in the FIRE group – that’s financial independence, retire early. Okay, a bit early.
What you learn about retirement after you retire is that it’s up to you to invent your own personal narrative, be it a full-stop cessation of work or a blend of work and other activities. I choose the latter, and that’s why you’ll see me writing in The Globe and Mail every other week on retirement and other personal finance stories of the moment.
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