The Demographic Shift in the Diocese of Toronto
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Retirement Savings Income
The vexing problem with living off of your savings is that no previous generation has ever had to perform this feat. Previous generations had income from pensions and Social Security throughout the retirement years - any savings were considered a bonus. They didn't have to "live on their savings" alone, so there's really no past model to learn from when it comes to converting savings to income. The question then becomes, how much of your savings should you spend each year? If you spend too much, you may find yourself living on Social Security benefits, which won't buy very much of anything.
Alternatively, if you spend too conservatively, you could deprive yourself of the lifestyle you worked for. Unfortunately, the financial experts we've relied on for so long have been trained in ways to build savings and not on the best means to access them. Therefore, converting your accumulated savings into income that you will not outlive is a challenge that you and your financial advisor will need to face together.
For instance, if you become a grandparent, your financial objectives may change from a simple, guaranteed-income design, to one that will leave some of your wealth for your beneficiaries.
Change is brewing in retirement and income planning for the baby boomer generation due to unique factors such as a longer life expectancy and more savings than any other generation to date coupled with the need for new sources of guaranteed income. How boomers and their advisors adapt to these changes in developing personal pensions will determine the type and quality of the boomers' retirement and, quite possibly, for the generations afterward.1
In Canada and the United States, the Demographic Shift will profoundly change the course of the Anglican, Roman Catholic Church and the United Church. Other non-mainline and smaller denominations like the Pentecostals, Baptists, Salvation Army and Presbyterians will not be as radically impacted but will still feel a ripple affect. These Protestant congregations typically do better in keeping the involvement of their children and teens, and this will be key to helping them survive in the coming thoroughly secular society.
1"Boomers: Twisting The Retirement Mindset" (August 7, 2007 By David Rando, JD, CLU, ChFC)
"Retirement Savings Income"
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