Common Money Mistakes in Retirement

Michael Wiener shares the two retirement spending mistakes he sees Canadians make most often.

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What do you see out there right now as being the big mistakes people are making? So as you’re doing your writing and you’re online and you’re researching, you’re talking to people, where are we going wrong? I mean, we’ve talked about fees already as being something that Canadians still don’t pay enough attention to, although we’re getting better, but what else disturbs you?

So I’m at an age where I’m seeing a lot of friends who are retiring, and a lot of my friends were fantastic savers. And a mistake that I see is some of them are trying to live at the beginning of their retirement the same way they lived when they were working. They’re trying to, you know, live on just what they see as their income.

They’re trying not to touch their RRSPs and so on. And what they then do is they say, “Well, I better, I have to take my CPP right away because I just can’t live on what, this little pittance that I’m getting.” So that’s one, one big mistake. But then I see the other side, too. You, you get the odd person who, uh, you know there tends to be the people who don’t have a ton. They’ve got 300,000 saved or something, and they say, “Well, you know, you only live once. I’m, I’m, I’m 64. I’m retired now.” And they start spending too much. So they’re, you know, I see some of each. And you know, you average that out and, uh, you know, everything’s fine, but averages cover up a lot of, a lot of problems.

No, it’s very true, and I do see both. Robb Engen’s been on our show a couple times and talked about the first one of the two you brought up and how tough it is to get some people to spend to the appropriate levels. They’ve been conditioned to save their whole life. Psychologically, they’re having so much trouble flipping that switch, and they have a fear of outliving their money, which I think is a very real fear.