Our Retirement Philosophy: Lock It Away Until We Need It

This is a guest post from reader Diane Wilson as part of our retirement series.

We live in a small town in Northern Ontario.  My husband is 74 and has been retired 12 years.  I’m 70 and have been retired nine years.  When we retired we had no specific plans on what we wanted to do.

My husband fell in love with golf, so he found his retirement activity.  I continued to work for a few more years because I was not ready to retire yet.

After, I got a seasonal income tax job at the local tax preparation office for six years.  Since my RRSP must turn into a RRIF this year, I have left that position.  So I guess I’m fully retired.

The Early Working Years

During our early working years, we didn’t think very much about how to build our retirement income.

The one smart thing I did, (as I was in charge of the finances) was to set up an automatic plan.  The contributions went into mutual funds at our local branch.  I closed my eyes and let the amount build up.

Eventually, when the children got older, I added a monthly amount to a non-registered portfolio.

My husband’s job paid a decent wage, albeit not a large one.  He was a social worker for the local Childrens’ Aid.

The one good thing the job had was a defined benefit pension with OMERS; his pension now is not too bad.

I gave up teaching and stayed home for 10 years taking care of the children.  As I wasn’t suited for a teaching job, I then found employment at our local Credit Union after trying out a few part time jobs.  So my wages were not much above minimum.

When a Federal government department came to our small town, I jumped on the bandwagon and actually landed a position.

Our Retirement Philosophy

Finally, my salary went up and I was contributing to a defined benefit plan as well as my RRSP.  I don’t have a large pension now, as I only contributed for 13 years, but it sure is welcome.

Related: Should You Make RRSP Contributions If You Have A Pension?

We were not savvy around investments.  He would put his money into penny stocks; I took the family money and put it mainly into GICs.

Back then, the GICs paid very good interest and we were able to put both children through post-secondary education.

When my widowed mother sold the family home, she gave her three children a part of the proceeds, which we promptly put into a RESP; that one came in handy.

My philosophy in those days was – lock it away and don’t touch until it’s time.

My husband and I used to discuss where we would put our RRSP dollars; it seemed that we always made the wrong choice.  As soon as we bought into something, everything would tank.

Related: Why Is It So Hard To Sell Those Investment Dogs?

Not being savvy or having a huge amount to invest, we used mutual funds.  Finally, out of desperation, I made an appointment to speak to a Financial Planner, affiliated with our bank.

Unfortunately, the closest one to us was three hours away.  But we hit it off with him and he has served us well over the last 12 years.  Yes, he sells bank mutual funds only, but he has always had our needs front and foremost.

Our portfolio has grown very nicely under his guidance in spite of the latest downturn.  The most important lesson he has taught us is – be aware of fear and greed.

A Simple Retirement

What do we do in retirement?  It’s not much different than what we did when we were younger.

We live a quiet lifestyle and do not travel.  We go to the city a few times a year to see our daughters and now we will be going to see a new grandchild.

Related: How This Couple Spends Their Retirement Travelling

At some point, I would consider moving to be closer to them, but right now, my mother, 93, is still in this town.

Our portfolio value certainly is not large; realistically, our net worth is around $700,000.  In about 15 years, our RRIFs will deplete to about $1500/year, just when we probably need the money for a nursing or retirement home.

Thank goodness for the TFSAs; they are the best thing to come along since the RRSP.  By maxing out our TFSAs each year, they will grow and be available to supplement our depleted RRIFs.

We are also saving dollars to use in case of medical needs (among other things); this family seems to be hit with some awful autoimmune conditions.

We have no debt and no mortgage.  It doesn’t look like we will have to use any of our non-registered portfolio, so can save that for an estate.

Retirement hasn’t changed my fundamental philosophy; I still lock it away until it’s time to use it for whatever purpose.

I learned early on that we would not be ‘rich’, if ‘rich’ is defined as being able to spend dollars indefinitely and impulsively.  But, our past habits have made us ‘rich’ in many other ways.

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