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Retiring Within Your Means

Retirement is supposed to be a happy part of life where you enjoy the fruits of your labors and relax after a long career but in today’s economy it is becoming more and more difficult to do so comfortably. It is not impossible, it just takes more thorough planning than it used to. Here are some tips to help.

Bob Ramsey, 63

Vancouver Island, British Columbia

The challenge: Lent money to adult children

When Bob Ramsey and his wife relocated from Nevada to Vancouver Island nine years ago, they envisioned a comfortable and picturesque retirement. But after arriving, the couple made a number of loans to their four adult children. “I suppose our generosity was a little bit overboard,” he says. “A couple of them had divorces and tough issues to face.” Another daughter lived with them on and off for five years when she had trouble getting work. There were verbal agreements to pay the money back, but little cash has been forthcoming. Ramsey estimates the loans depleted his savings by a third.

He’s also found it difficult to find work. Visa issues put his career on pause when he moved to Canada, and he has found it challenging to get work in either insurance or media, the two fields he’d worked in back in the U.S. “The transition to Canada created a career gap,” he says. “It’s really yet to be filled.”

The advice: “I’ll be as gentle as I can while still wanting to be clear: Stop lending money to your children,” Duong says. “You need to prepare for your own retirement first.”

“Often folks make decisions with their heart,” Duong says. “But in the case of adult children, they have many, many years to earn money and pay their own debts, whereas you have a much shorter time horizon.”

He says Bob should “continue trying to find full-time work as soon as possible,” even if it’s a job he’s not thrilled about. “Retirees or near retirees who are looking for work just need to be really, really flexible,” Duong says. He also says Ramsey should delay taking Social Security as long as possible. As for the family loans, Ramsey could ask his children to sign promissory notes to pay at least some of the money back.


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