Can you afford to retire?
By Diana Cawfield • Bankrate.com

For starters, a lot of preretirement income for many people goes to pay off mortgages or invest in retirement or your children's education. For many families, those payments represent 25 percent or 30 percent or more of their net after-tax expenses. But they are expenses you won't need to pay after you retire. Baldwin also cautions investors not to forget income streams such as the Canadian Pension Plan (CPP), Old Age Security (OAS) and private pension plans.

For couples, Baldwin recommends looking into pension income splitting for tax advantages. "It's absolutely great," says Baldwin. "It's a very sexy and exciting piece of legislation for people." That said, the fine print varies, so an experienced financial professional is your best source of information, he says.

As well, take advantage of the wonders of today's technology, whether through software programs or tapping into your favourite bank's website. "The beauty of these programs is that they'll calculate the tax and show the net income in the future," says Baldwin.

Which retirement is right for you?
When it comes to retirement planning, "retirement is more about lifestyle" than it is about money, says Patricia Lovett-Reid, senior vice-president at TD Waterhouse Canada.

Recently, Lovett-Reid was sitting in a doctor's office and two women who recognized her from media appearances started chatting about their retirements. One woman leaned over and said, "I've got to tell you, I've got $2 million but I don't have enough to retire," which prompted the other women to say, "I've got $200,000 and I've got more than enough to retire."

To which Lovett-Reid replied, "you're both living your own reality. The one that has $2 million may have a lifestyle that's extremely extravagant that she's used to, so she's got to put a plan in place to support that. The other woman, she's comfortable with her reality and she's going to be totally fine because her lifestyle supports the money that she has."

So the issue is more about being realistic with who you are and what you want in retirement. More often than not, Lovett-Reid doesn't hear about people who are dissatisfied with retirement, rather, they're dissatisfied because they don't feel engaged, they've lost structure in their lives or they don't socialize the same way they used to. "It's rarely about the money," she says.

Granted, she also stresses that you have to be pragmatic -- you don't want to head into retirement with debt. Realistically, you won't have the same disposable income to be able to manage the debt.

To realize your best retirement, visualize a path to retirement -- literally picture yourself doing what you really want to do. "That's the lifestyle equation," says Lovett-Reid. "Then, set yourself up with path strategies to reach your goals, with investment strategies according to your lifestyle to transition into retirement." 

Diana Cawfield is an award-winning writer, specializing in finance, health sciences and corporate communications.