How To Be Prepared For Retirement in Canada

What are we taught to do? We're taught to take our money and put it into these different vehicles where the money could be trapped potentially for a very long time. We can't access that money without sales fees or penalties or taxes. It's not very liquid. We put it in these vehicles and we hope that that money grows and then that we can some and doesn't take a massive hit from the market or whatever. I can now go start drawing down on that money to create an income, a passive income stream for me and my family or, or whoever I'm with at that time to meet my needs. And what am I doing, Liz? I'm hoping really that I've built up enough assets and I'm hoping that those assets have performed well enough to live longer than I do.

Hello there. My name is Vernon McCarty. I'm an authorized infinite banking practitioner with, through the Nelson Nash Institute and a member of the Ascendant Financial team. Welcome to our YouTube channel, the Banker's Vault. This is my colleague, link, Liz LeMond.

Hello, everyone. Today we're going to talk about how to be prepared for retirement. We're going to cover four things that are really, really important when you're looking at how to make sure that you're prepared for retirement, whether that's in a few years or in lots of years time.

All right, so Liz, the first thing that you and I wrote on that page is really just to think about the types of assets that you're actually acquiring and to avoid putting your money what we fondly refer to as a financial prison. Is that right?

Absolutely. It's making sure that you have liquid access to those assets, make sure that you're not trapping your money. Because for most of us, when we're building up money for our retirement, we need to be able to continue to grow it, take the advantage of opportunities and not so just being careful not to put it in places where there's high fees or restrictions around how you can use that money and invest that money going forward.

Yeah, Liz, you would have heard this before. Isn't it interesting that the minority of the people in the world control and accumulate the capital while we continue to do what the minor, what the majority of people do financially and wonder why we don't get ahead? It really makes no sense, right?

Absolutely. And I think, you know, that that understanding of assets and income streams is really important not only while we're preparing for retirement, Verne, but also, you know, to our point number two is understand what impact that's going to have when you get to passive income time. So a lot of people don't like the word retirement. So, you know, we can say passive income time whenever that happens to be everybody. You know, depending on the day you're watching this, you might hope that that's sooner rather than later. And understanding that those, that the impact of creating certain assets can cause you some either tax issues or problems with how you can access that capital without creating attrition of that money because of how you've set up different income streams. So really understanding right through the path of that asset in terms of what it's going to mean for your income as you're trying to draw on these different things that you're talking about deciding and building for your retirement plan.

What I'm hearing, Liz, that's key is actually have an exit strategy. Know if I'm going to, you know, invest or purchase a piece of real estate, well, what am I planning to do with that person, piece of real estate long term or whatever that asset class that you're getting involved in, stocks, bonds, mutual funds, maybe you're doing private lending, maybe you're acquiring real estate. But understand what's going to happen today and what's going to happen in the long term. And I get that Liz and I are talking about a lot of different things here. So if I could offer, you know, you don't have to be an expert at everything. And what I would, what I would implore you to do is just do a little bit of research. How do you eat an elephant one bite at a time. You don't need to know all of these things, but maybe just learn about one thing and maybe you'll discover that that thing isn't for you and that's okay. So then learn about another thing and then you can slowly start to practice and incorporate those into, into your, your wealth strategy.

And yeah, I think that's really important. And understanding that there might be assets that you want to use while you're still working, but they may not be ones that you're going to hang on to when you retire. So to your point, Vern, of like having that exit strategy, it doesn't need to be complex. It can be very, very simple. But just understanding what do I need to do so that I can maximize the amount of capital that I can want to use when I get to passive income time. Another one that's really important is plan for what you're going to be. This is the fun part, Van. This is where we can, we can dream and think about you Know, who am I going to be when I'm in that passive incomes part of my life?

Yeah. One of the things that I talk to my clients about a lot, Liz, is that while you and I are both in a very similar position, I absolutely love what we do. I love our business. I love to coach clients and I get up every day and I get excited. However, what I don't love is I don't love being dependent on my income. Very interesting distinction. So what I talk to my clients about is like, look, if you love what you do, that's fantastic. Well, let's create what I like to refer to as a work optional lifestyle. Right. Financial freedom, whatever you want to call that. I have enough capital available and I have enough income streams. My money's working hard enough for me that when I earn income through my business or my employment, that's more or less a bonus. More capital I can use to grow even more wealth. That's what I recommend to my clients. Like, think about what you're passionate about, about. It doesn't have to be a job or a business, but what is it that you actually want to spend your time doing when you, when you get to this elusive retirement or passive income time? Well, what are you going to be.

Doing with your life?

You get to start thinking about those things now and exactly what you said, Liz, you know, at the risk of sounding cliche, but you get to dream a little bit and have fun. The only place you don't have a limitation is between your ears. So use that thing. Put it to work.

One of the reasons we're talking about this now is that that's going to give you the motivation and the drive and the understanding of all the other pieces that we're talking about, about what needing to create in terms of your asset and income streams and everything else, and to do the education to move yourself in the direction that you want to go. And you know, really important in that, Vern, is like, what have we traditionally been taught about financial planning in terms of, you know, assets that dwindle out at this, at a set, you know, determined number of years?

Yeah. You kind of triggered two thoughts in my mind. One is building off of that time that you'd mentioned, like, what are we going to be doing with our time? Because a lot of times we're told in retirement. I speak to many people in retirement and very few of them tell me just how low their expenses are today. Right. Most people, if anything, they tell me that they need more money because they want to go out and live their life and they want to try new things and they want to travel and they want to shop and they want to experience all the things that they couldn't do when they were working 30 to 50 hours a week. Well, now that time is all freed up, so they need to figure out what they want to do with their time, for one. And to your other point, I think that you were more closely segueing into. Is that the traditional financial planning model, what are we taught to do? We're taught to take our money and put it into these different vehicles where the money could be trapped potentially for a very long time. We can't access that money without sales fees or penalties or taxes. It's not very liquid. We put it in these vehicles and we hope that that money grows and doesn't take a massive hit from the market or whatever. I can now go start drawing down on that money to create an income, a passive income stream for me and my family or whoever I'm with at that time to meet my needs. And what am I doing, Liz? I'm hoping really that I've built up enough assets and I'm hoping that those assets have performed well enough to live longer than I do. Is that what we're talking about?

That's a recipe for stress, man.

That sounds like. That does not sound like a very secure retirement plan. And it also doesn't sound like a very abundant mindset, does it? Gosh, I hope that I don't outlive this money. I hope. I hope I have enough money to last until I die. Gosh, that doesn't sound like a very. You said earlier the motivation. That doesn't sound like something that's really motivating for me in terms of like inspiring me for my future.

The other thing that's really challenging with that idea too, Burn, is it's very hard to work, you know, raise a family, have your own living expenses, pay a mortgage, whatever it is that you're doing with your working life and put aside enough to create enough income income for that passive income time, given that we're all living so much longer. So that's the other really significant flaw in that plan. The idea of doing that was when people were retired for no more than about five years, that worked. Whereas now we're looking at 30 plus years of retirement for people where people are having that passive income time. And so shifting the mindset around what we need to do, we need to be creating assets that are actually going to continue to compound and grow while we're working so that they can continue to do that while we in our passive income time as well. So assets that are expanding, not contracting, because, you know, we're very fortunate to have an increased life expectancy, but that comes with a different shift in the mindset of what we need to create for ourselves.

Yeah, absolutely. It's a good problem to have, but it's still something that needs to be solved. Right, Liz? And it takes me back to the point that we made earlier about doing what the major, what the majority of people do. What the majority of people do is they save just enough or they hope that they have enough or what have you. But the wealthy people in the world, the minority of people, just because I'm 60, 70, 80 years old, does that mean I'm not going to acquire assets anymore or am I still continuously building my wealth? Yeah, I'm using those assets, enjoying my life, but I'm also building wealth till the day I die. Right. And so if I have more than I need when I pass, okay, great. That's far better than not having enough or having just enough. I get to bless other people's lives now. So change your mindset and think more abundantly.

If you'd like to learn more about how to do this in your own life, you can click on our videos to learn more about the process of becoming your own banker.