What comes to mind when you think of retirement: Florida, golf, hobbies, volunteering, generosity, inheritance, higher education, death, or what will I do if I don’t have enough money?
The financial services industry recommends that we replace up to 80 percent of our working income to retire comfortably. This can make us slaves to our own retirement. Today, if 30 percent of our income goes to taxes, 20 per cent to mortgage payments or rent, and 10 per cent to raising kids, then we’re already living on 40 percent of our income!
Malcolm Hamilton of Mercer, a human resource consulting firm, suggests that Canadians realistically only need to replace 50 percent to 60 percent of their working incomes to maintain their current lifestyles into retirement. The $64 question is, “Are we happy with our current lifestyle?”
Retirement is a psychological, social, financial and spiritual issue. What will you do? Do you and your spouse agree? Do you have enough money? Does God still care to use you for kingdom work? Most of us concern ourselves with the money question.
Moses is a classic example of someone who, with some encouragement, believed God wasn’t finished with him even though he was 80 years old (Exodus 7:6). For many of us, a 30-year retirement is a distinct possibility and should be planned for.
How do we make our money last for decades? Most experts agree you should not withdraw more than an amount equal to 4 percent (plus inflation) of your initial principal each year. A part-time job earning $10,000 per year would be similar to a $200,000 investment portfolio. Government sources like the Canada Pension Plan and Old Age Security can provide between $12,000 and $17,000 per year.
Retired seniors typically live on less because their expenses are less. However, having the best financial planner and earning the best rate of return is not a guarantee of success. Ultimately, we must trust someone greater than the best human wisdom. Psalm 31:14,15 says, “But I trust in you, O Lord; I say, ‘You are my God.’ My times are in your hands.”
I recently spoke with three retirees and asked them to evaluate their retirement. Each spoke about a sense of gratitude—for health and strength, for strong relationships with family and friends, and for a sense of self-worth and belonging. Their retirements are testimonies to Ecclesiastes 5:19, 20: “Moreover, when God gives any man wealth and possessions, and enables him to enjoy them, to accept his lot and be happy in his work—this is a gift of God. He seldom reflects on the days of his life because God keeps him occupied with gladness of heart.”
What is the alternative? It’s the guy who says, “?‘Self, you’ve done well! You’ve got it made and can now retire. Take it easy and have the time of your life!’ Just then God showed up and said, ‘Fool! Tonight you die. And your barnful of goods—who gets it?’ That’s what happens when you fill your barn with self and not with God” (Luke 12: 19-21, The Message).
Kevin Davidson is a stewardship consultant at the Calgary, Alta., office of Mennonite Foundation of Canada (MFC). For stewardship education and estate and charitable gift planning, contact your nearest MFC office or visit Mennofoundation.ca.