Hello everyone, and welcome to the Retiring Canada podcast. In today’s episode, we’re discussing Financial Freedom and how to find balance as you approach retirement.
We’ll cover:
- What financial freedom means to you,
- How to strike the right balance,
- The “I want more” dilemma,
- Understanding time as the great equalizer,
- And finally, a few actionable steps you can take.
So, what comes to mind when you hear the term financial freedom?
Perhaps: Independence, Sacrifice, Dignity, Frugality, Success, or Retirement.
In my experience, financial freedom is a term that often gets misunderstood, leading people to mismanage their time, money, or sometimes both.
When I ask people, “What does financial freedom mean to you?” most tend to focus on two parts: the financial and the freedom. It makes sense, right?
Some focus almost exclusively on the financial side—how much money they need to achieve financial freedom and secure a sustainable retirement income. These are the people who feel they can only be free once they hit a certain number—say, X million dollars—only to raise that number later, often ignoring the value of time... freedom.
Others concentrate on the freedom side, believing they need to break free from work to experience true freedom, overlooking what more wealth could mean for their lives.
Do you identify with one of these more than the other?
As you may have guessed, true financial freedom isn’t about choosing between one or the other; it’s about finding a balance that works for you and your family.
This balance is key, as extremes on either side can lead to unhappy outcomes. Focus too much on accumulating wealth without thinking about how it affects your time, and you could find yourself in a time trap. On the flip side, focusing too much on freedom without building enough financial security can leave you equally unhappy, albeit for different reasons.
Ultimately, it's about finding a balance between accumulating resources and managing your most precious, depreciating asset: your time.
A few weeks ago, my business partner and I sat down with a couple who had been running a successful business for over 25 years. They were considering selling it all and retiring at age 56. The only issue? They had spent nearly every waking moment working in the business, with little time for themselves.
While they had built a net worth in the eight figures, they traded nearly all their freedom to get there.
When we showed them a sustainable retirement income plan—a true replacement of their current after-tax income—we expected excitement. Instead, they felt uneasy about stepping into retirement, letting go, and embracing the freedom that awaited.
They wondered: What would their new purpose be?
My business partner, a 30-year veteran in the financial advising industry, told me he has seen this countless times. For some, watching their investments grow becomes a powerful addiction. Even when advisors show them they can retire comfortably, it’s still not enough.
Maybe they want to see the numbers keep growing, or maybe they’re struggling to find purpose in this next chapter of life.
This isn’t just an issue for the ultra-wealthy; the same mindset can manifest in those who have saved modestly and live frugally. Focusing solely on money will only take you so far. At some point, you need to take stock of your time.
For some, this realization comes with the loss of a loved one or a personal health scare—events that put the value of time back into perspective.
As a financial planner, I understand the importance of reaching a number that guarantees sustainable retirement income for life. But once you’ve hit that number and trust the advice you’re receiving, I urge you to shift your focus to your time and embrace the next phase of life.
Time is the great equalizer—don’t let it slip away, only to leave more to your beneficiaries and the CRA.
Earlier in 2024, my team and I developed a *Navigating Retirement* guidebook, which I believe is a valuable resource for anyone nearing retirement and looking to discover their own financial freedom balance. I encourage you to visit our website at *fundamentalwealth.ca* to get your copy and check out our document library, which contains over 15 guides that can have a positive impact on your financial future.
Now, before we wrap up, here are your action items for today:
1. Schedule a meeting with your Certified Financial Planner and update your retirement plan. Stress test your plan against inflation, market downturns, and unexpected losses. Once you’ve drilled down on a retirement date and sustainable income, take stock of your time and mentally prepare for this life transition. What will you do with your free time? Who will you spend it with? Will you pick up new hobbies or volunteer?
2. Soul search for how you will find fulfillment in your newfound retirement freedom. Once the financial numbers are in place (which, in my opinion, is the easy part), it’s time to focus on what will truly bring you happiness.
3. Visit our website for helpful guides and learn more about our Fundamental Retirement Plan process, which can help you navigate this journey.
And that’s it for today’s episode!
For the links and resources discussed, check out the show notes or visit retiringcanada.ca.
If you enjoyed the show, please subscribe and leave us a 5-star review on your favorite podcast app. Be sure to sign up for my weekly Retiring Canada newsletter.
And remember, when it comes to your retirement—don’t leave it to chance.
Make a plan so you can retire with confidence.
All comments are of a general nature and should not be relied upon as individual advice. The views and opinions expressed in this commentary may not necessarily reflect those of Harbourfront Wealth Management. While every attempt is made to ensure accuracy, facts and figures are not guaranteed, the content is not intended to be a substitute for professional investing or tax advice. Please seek advice from your accountant regarding anything raised in the content of the podcast regarding your Individual tax situation. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.