For some reason, I was particularly puzzled that morning.  Perhaps it was one too many late-night hockey games, or maybe the early morning darkness had me disoriented, but I was struggling with a decision that I make about 300 mornings each year.

In the darkness, I could make out the shape of the sock I was holding up in front of my face, perplexed as to which of my feet it belonged to.  The humour of the situation was not lost on me, despite my momentary confusion, and I thought of how many times we get stuck on easy decisions.  After being put on the same foot repeatedly, my socks develop a certain “memory”… they had each adopted a shape (despite frequent washings, just to be clear) that informed me which one fit most comfortably on which foot.  And, with the first sock installed on the proper foot, where the second sock belonged became a certainty.

What has this epiphany to do with preparing for a successful retirement, you ask?

It’s said that “the journey of a thousand miles begins with a single step”.  Likewise, I’m convinced that, for most people, the retirement of one’s choosing begins with a single decision.  Perhaps this is an oversimplification, but in my years of financial planning, I’ve found that most people approach retirement with a measure of trepidation as a result of failing to make a singular decision:  what do I want my retirement to look like?

Consciously or sub-consciously, we typically wrap our luxurious lifestyles in a blanket of entitlement.

Financial planners are often asked, “How much money do I need to retire?”  The answer, of course, is as individualistic as each of us.  Champagne and caviar or beer and beans – which one best describes your tastes and aspirations for retirement?  Each comes with its own pricetag.

For many, the simplicity of the question does not make the answer come easily.  Look at how you spend your weekends and vacations.  Are you a homebody, happiest working around the yard or visiting with nearby friends?  Or do you look for opportunities to break from the norm of the working week to travel, attend shows, spending fun money at the mall?  Now, think of each year of retirement as 365 days of vacation.  If you aspire to travel, experience events, places and activities that may be beyond the reach of others, it’s likely that your retirement will take on a similar tone.  Your retirement is going to demand more financial resources than that of your neighbor who takes joy in being around the yard, taking in events on the widescreen, and satisfying his travel-bug with the Discovery Channel.

Settling this decision is like finding a home for your first sock.  Once that decision is made, your next step (pardon the pun) is simple.  Notice, I didn’t say easy.  Whether your retirement lifestyle is going to be of the order of beer and beans or champagne and caviar – and for most of us it’s somewhere in the middle – once that vision is firmly in place, the actions that follow flow from logic.  Just as the second sock logically belongs on the remaining bare foot, so the preparations that you make for retirement must logically support the retirement standard to which you commit yourself.

A word of caution:  Don’t confuse simplicity with ease.  It can be relatively simple to identify the annual retirement income you need after taxes to fund your planned activities and purchases, especially with the help of an experienced financial advisor.  However, the work really begins when you start to adjust your pre-retirement lifestyle to make room for your future retirement.  Cutting back on your lifestyle is difficult when you’ve worked hard to attain a certain status. Consciously or sub-consciously, we typically wrap our luxurious lifestyles in a blanket of entitlement. Sacrifices will be required, and so perhaps new disciplines, but keep your eyes on the prize.

Visiting your financial advisor for an annual status report and checkup will allow you to witness your gradual progress toward your goal.  And when that day comes, the sweet comfort that comes with financial freedom will make it all worthwhile. And don’t forget, your spending pattern will not follow a consistent trajectory throughout retirement. While most people seize the opportunity to travel and enjoy high levels of activity during the early years of retirement, we tend to slow down, travel and spend less in our later years…thus requiring less income – assuming our health does not betray us.

My next blog will provide a Retirement Planning process that you and your advisor can look to as you map out your retirement blueprint. In the meantime, if personal experience has taught you lessons you’re willing to share, we love reading your comments!