I do intend to retire

Nigel Chamberlain (name changed) spent 35 years serving patients in his Calgary psychiatric practice and acting as an expert witness during court proceedings. But he’d neglected the investment side of his finances.

“I’d been too busy earning a living to sensibly look after what I had,” he says, adding that despite having a hard time finding a buyer for his business, he plans to fully retire so he and his wife can travel and sail. Unlike some older boomers, who now claim they’ll remain active in work-life until mental capacity issues intervene, Chamberlain looks forward to a day when the office is only a memory.

He’s already cut his hours in half while maintaining his income level. “But full retirement is looming and I could have had a lot more peace of mind and be in a better financial situation if I’d done this years ago.”

Getting a later start on formal retirement planning vis-à-vis most of his peers makes him sensitive to market swings, and he frequently looks to Jason Pereira, a senior financial consultant at Bennett March and IPC Investment Corp. in Toronto, to quantify the size of his economic cushion.

“I am by temperament someone who probably needs more reassurance than should be the case,” he says. “Nearly everyone who knows me says, ‘Of course you can retire tomorrow.’ Intellectually, I understand that but psychologically I don’t always feel secure. Jason understands me well in this regard; he knows I’d probably overact if something didn’t go right.

“We spent six months [talking] before we actually started doing things. The risk profiling was extensive. The greatest difficulty I had was acquiring proper understanding of the whole financial process; I’d been doing routine saving but hadn’t been engaged in formal investing.”

MacGillivray, by contrast, says she’s relatively comfortable with volatility, thanks to the fact that she and a group of 11 friends formed an investment club two decades ago—each putting in $20 to buy a stock the group selects. She says this experience makes her less sensitive to market fluctuations than some investors her age.

“I’ve seen the market go up and go down, and I watched [my husband] George’s portfolio go down 30% in 2008,” she says. “I wouldn’t let him look at it because I knew he would panic. It’s back up now but not quite to where it was.

“I’m more laid-back about it than a lot of people. My advisor says I have enough to last until I’m 90. I’m not sure he understands all my spending habits but he’ll learn them over time. And if I have to reduce my spending, I will. Whatever it takes.”

And she’s not alone. With only one exception, the clients we talked with say they’re comfortable with market cycles and worry far more about an advisor’s ability to generate cash flow, in the form of dividends or real estate returns, than they do about net portfolio value.