April 10, 2019

[Ep. 192] Planning for a Successful Retirement with Larry Swedroe

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I’m Jessica and I’m a money expert, speaker, Accredited Financial Counsellor Canada®, host of the More Money Podcast, and am currently writing my first book with HarperCollins Canada (2025).
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I don’t know why exactly, but lately, I’ve been hearing from my millennial clients about their big concern about not being able to afford retirement. I’m talking 20 and 30 years olds freaking out because they have no idea how they’ll ever be able to save up $1 million (or most likely more) for retirement, plus pay off their student loans, buy a home, start a family, and just simply live!

So, I thought I would bring on a retirement expert who can shed some light on the most important things we all need to know about retirement. My guest for this episode is Larry Swedroe, the author of Your Complete Guide to a Successful and Secure Retirement, as well as the director of research for Buckingham Strategic Wealth and the BAM Alliance.

Here are a few things we discussed in this episode.

What People Forgot to Plan – What to Do in Retirement

Most people focus on the money part. How much do I need? How should I invest to reach that number? Will it be enough? But really, you should start by outlining what you want to do when you’re actually retired. How do you want to fill your days? What’s your exit strategy from the workforce? Are you going to do a full-stop retirement or ease into retirement by going part-time or consult? Before testing out any retirement calculator, define what your retirement will look like first.

Planning to Live Longer Than 20 Years in Retirement

Another concern I often hear is that we’re all living longer. Many of us will live until 100! So if we retire at 65 and live until 100, that’s 35 years of retirement we need to prepare to have income for. That might make your palms sweaty, but it’s actually fairly simple math to figure out how to afford a long retirement. Larry suggests taking the number of years you plan on being retired for and multiplying it by the gross annual income you’ll need to live off of in retirement. Then, figure out how inflation will come into play, and that’s your number!

How to Be a Savvy Investor

Larry shared some amazing pieces of wisdom when I asked him about how we all can be savvy investors. Here are his top tips:

  • Make sure you’re only spending money on things that are important to you.
  • Save as early and as often as possible.
  • Make your savings automatic through auto-debits and auto-withdrawals to your savings and investment accounts.
  • Read the book Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler & Cass R. Sunstein to learn how to nudge yourself into doing the right things
  • Invest in low cost Index funds or index ETFs
  • Avoid investment products sold by insurance companies and Wall Street investment brokers as they’ll be more expensive and most likely won’t outperform index funds.
  • Don’t work with any financial profession who earns a commission when working with you.
  • Diversify your portfolio to include more foreign equities and fixed income. Don’t focus solely on domestic stocks and bonds (just Google what happened in Japan).
  • Don’t mistake the home you live in for a real estate investment. If you live in it, it’s not an investment. Once you sell it, it is.
  • Be careful with real estate investing (just look at what happened and is happening in the U.S.)

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Want to jump start your investing journey but don’t know where to start? Enroll in my Wealth Building Blueprint for Canadians online course to learn everything you need to know about how to start investing, building wealth, and planning for retirement!

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