Cause And Effect Of Retirement Planning For The Future Of Retired Employee

With the average retirement age being 65 years old, and the average lifespan is around 80 years old in many developed nations, saving enough money to last you a good 15 to 20 years or more after you end your career is critical. 

People can have more than one reason for not having a retirement plan in place. Some of those reasons can even sound quite convincing; it’s too expensive to have a plan, you’re nowhere near the retirement age, you can keep working after retirement, and so forth. Most people don’t even know how much they will need to have to maintain a good standard of living after retirement. 

businessman retirement

But let’s take a hard look at this number: A report published by the Agnus Reid Institute showed that nearly 50% of all Canadians are forced into early retirement either because of illnesses, disability, or layoffs.  Only 6% said that they planned for early retirement. Canadians are also worried that they will outlive their savings.  

Americans aren’t much better: with around 47% forced into early retirement.

The point is you don’t know what can happen, and you don’t want to be left to fend for yourself when you are retired. While not everything has to look bleak, but nothing is getting cheaper and no one is getting younger, which will make your retirement tough without a plan, to say the least. Here are some factors to understand about retirement planning, and the crucial role it’s going to play in your life:

Depending on social insurance

People with no retirement plans depend on their social insurance. The effect of which isn’t anything to write home about. Most people will not have a pension check that can carry them through the month easily, let alone the rest of the months and years of their life. Pensions and social security, unfortunately, are not enough to pay for things like medical bills and doctor visits that are most likely to increase. Nor will there be enough to pay for more enjoyable things like travel. If you live in Canada, you will need to qualify for a pension monthly plan, otherwise, you need another source of money; so it’s a good idea to check out retirement planning for Canadians to understand what other options you have in terms of retirement plans. The right plan will put your mind at ease knowing you have enough to afford a good standard of living, while also being prepared for any unexpected expenses. 

Policy changes

Many laws, rules, and regulations are not engraved in stone. They are prone to change, especially when a new government takes over. Retirees might find themselves at risk with new policies made; they might see an increase in taxes or a decrease in medical coverage insurance. Your retirement plan needs to take this factor into consideration, and you should know that policies can change at any time. Inflation is another issue that concerns anyone living on a fixed income.

Personal changes

Besides government policies, you might feel that you need to make some changes for yourself. The longer you live, the more you might need medical assistance on a full-time basis. Other changes can happen suddenly, as changes due to illness. 



Even when working full time, the debt will always put you in a risky position. The cause of debt could be any number of reasons, but the effect of it is always one; it will drain your personal savings, which you will need every cent of. And if you’re taking out from your retirement savings to pay off debt now (while you’re still working), you would be basically robbing yourself from a comfortable future. You need to pay off debts before you retire, and avoid getting into one during retirement. 

Dependency on others

Due to poor or no planning whatsoever, retirees might think they can depend on their children. Lack of planning could mean that you have to sell your home, for instance. Moving in with your adult children can put an enormous amount of stress on the relationship. Your children have their own lives to lead, and you don’t want to feel like a burden. Besides that, maybe your children live far away or maybe you don’t even have kids. There is no one to depend on to fund your retirement except you.

Even the best plans can fall victim to unknown and unsure circumstances. Yet, that’s no excuse to not prepare for your retirement and understand the options available to you. The worst risk of all is to not have a retirement plan at all. The consequences of that can be plenty. You’ll want to avoid that and see how you can manage your money to secure your golden years.