Canadians are some of the richest people in the world. What’s more is that because of the redistributive social system as well as a number of other factors, Canadians get even richer as they grow older. This is why Canadian seniors are among the most affluent in the world. Before reaching retirement age many mid-lifers will most likely come into some money through inheritance, pensions, retirement funds, and even perhaps winning the lottery.
This article looks at the different ways to spend that money wisely depending on what you want to get out of it.
Entrepreneur has found increasing evidence that shows how spending money on experiences makes us happier than buying material things. At a time when you think you’ve seen and done it all, take yourself out of your comfort zone. Go on that dream vacation to Greece or take that Caribbean cruise. Traveling in your later years often allows you to spend more time away, especially if you have retired. Take advantage of the time you now have.
Money Sense notes that during retirement, people reverse the process of investing by living off dividends and selling stocks when the financial need arises. To get to that point, one has to make sure they have enough money in the bank. There’s a phenomenon called the pre-retirement financial stress syndrome where “mature investors realize they may not have enough savings to generate the stream of retirement income they’d been counting on.” This is why if you happen to come into a large sum of money, most likely through inheritance, investing is a very smart option.
Buying a New Home
Buying property is another thing to consider when deciding where to spend your money. CBC states that a quarter of Canadians expect their home to be their primary source of income when they retire. As we age, there’s less of a need for that big house with a sprawling yard. Trading the house and lot for a more manageable property may be the refreshing change you need at this stage in life. This will also give you the opportunity to generate even more income.
Setting Aside Money for the Family
Many people feel it is important to set money aside in order to give your family a better life. Some do this through setting up a Registered Education Savings Plan or purchasing life insurance for their grandchildren. If you happen to be fortunate in life then helping out those you love is one of the best gifts you can give. This is exactly what one couple did after winning the MegaMillions in 2011. The couple won half of the second highest jackpot at the time (511 million CAD). Instead of spending it on expensive trips, they decided to use it to help future generations of their family. While that may seem like a lot, it is almost pocket change compared to the record MegaMillions jackpot last year, which Lottoland reports was 2.19 billion CAD. Nevertheless, that couple’s fortune (both literally and figuratively) enabled them to help those they cared about.
It’s important to note that these choices aren’t mutually exclusive, and you can find ways to integrate all of them. Pam Mundell discusses private wealth management services, which are a group of experts who personalize a portfolio for you based on your financial goals. Whether or not this arrangement’s for you, it’s always good to get expert advice before making major investments and purchases. Remember that navigating these financial choices one smart step at a time helps get you closer to that dream retirement.