Oh, hi again. Retirement isn’t just about hitting a savings target or a certain age. It’s about figuring out if your money and your life are ready for the leap. Today, let’s explore what “ready” really means.

How do you actually know when you’re ready to retire? There’s no magical bell that rings when you’ve saved enough or worked long enough. People take the leap anyway, trusting their gut that it’s the right moment.

But what if that gut feeling isn’t enough?

Earlier this month, a LinkedIn post caught my eye on this very question. Joe Nunes, executive chairman at Actuarial Solutions Inc., wrote: “I often tell people thinking about retirement that ‘people generally figure out whether or not they can afford to (retire) about two years after they retire.’”

His point: We spend years obsessing over saving and hitting that magic number, but far less time thinking about the other side of the equation – how we’ll actually spend that money once we stop working. In financial speak, that’s decumulation.

According to Nunes, there are two big blind spots.

First, you don’t really know how your financial plan will perform until you’re living it. Markets change, withdrawals feel different when they’re real, and the day-to-day experience of retirement rarely matches what you imagined. “Half of the challenge in being comfortable that you’re ready for retirement is you don’t really know how this plan is exactly going to play out,” he said.

Second, there’s lifestyle. You may think you’ll travel less, only to find the “travel bug hits” and you wish you’d saved more. As he put it, “The plan is just an estimate, and your idea of what you’re going to do in retirement is just an estimate, and it takes a couple of years of living that experience to really start to” understand the reality.

Avoiding this uncertainty entirely is hard, Nunes said. He said you can save aggressively to give yourself a wider margin of safety, but that likely means sacrificing experiences while you’re still working. Or you can save according to plan and accept that you might have fewer luxuries in retirement. “You can’t perfect this,” he said.

One way to plan more realistically, he suggests, is to think in layers rather than targeting a single annual dollar figure. Instead of planning, “I need $50,000 a year to be happy in retirement,” break expenses into buckets: basic needs such as housing and groceries in one, health care in another, and discretionary spending such as travel in a separate bucket. Then, once you’re actually retired and seeing how withdrawals feel, you can make sure the essentials are covered first and make more informed decisions about things such as that dream trip.

35%

The take-up rate of Registered Disability Savings Plans, a tax-advantage investment account for Canadians with disabilities, according to 2023 government data. That means thousands of eligible Canadians aren’t utilizing the account. And even when people do open an RDSP, research from TD shows many aren’t actually investing the money they contribute, which means they’re missing out on potential growth.

What they’re saying: “Awareness continues to be the largest barrier,” said Pat Giles, TD’s vice-president of Saving & Investing Journey, over e-mail. “Many families simply do not know that the program exists, while others are unsure how to access it or assume they will not qualify.”

In case you didn’t know: The RDSP stands out from other federal savings plans because of the government contributions. Eligible Canadians can receive up to $70,000 in grants and $20,000 in bonds over their lifetime.

What one inheritance taught a 68-year-old about financial independence

The beneficiary: Gabby, 68, a retired grandmother in Ontario, used an inheritance of about $25,000 from her father to escape a toxic relationship and secure her own home at 40.

What she did with it: Gabby bought a house where she and her daughter could live safely and independently. Decades later, she’s writing her own will, ensuring her daughter can inherit freely and benefit from the same security she once received.