“Redefine Retirement” - and conquer your fears of becoming a bag lady

You probably already know that the shelf at your local bookstore has a whole section on retirement, and most of the books have titles like “The Retirement Time Bomb” and “Smart Women Finish Rich“.

Those titles are meant to be motivational, but they might only motivate you to avert your eyes when you walk past that section of the bookstore, thinking if you aren’t among the “smart women” who “finish rich,” you will…get blown up by a Retirement Time Bomb?

Now there is another entrant on the bookstore shelf, a book designed specifically to consider retirement planning from the perspective of Canadian women. “Redefining Retirement: New Realities for Boomer Women” (Second Story Press, 2007) was written to support boomer women in creating their own vision of retirement. The authors, psychologist Dr. Margret Hovanec and lawyer Elizabeth Shilton, do so by “peeling back the old definitions and understanding of retirement and examining what retirement will really mean for baby boomer women.”

Shilton and Hovanec say the purpose of the book is to provide an alternative to the plethora of retirement planning books that are “still stuck in the old ‘male breadwinner’ ways of thinking about work, retirement, and family life” by creating a “woman-centered, integrated approach…to prepare us for the next stage of our lives.”

So how do they do this? And how well do they succeed at the task they have set for themselves?

The first chapter of the book creates a context for discussing retirement planning from a Canadian woman’s perspective, by describing the challenges we face in the new world of retirement from our increased life expectancy to the length of time we expect to live after we “retire”, however we define retirement; to the decrease in pension coverage for retiring workers and our generation’s changing expectations of how we will spend our time in retirement.

Building from that broad context, the book gives a brief overview of many of the major areas we should consider when looking at life after work. The authors don’t shy away from confronting our “fears of becoming a bag lady,” as one section is titled. “As women,” they note, “our chances of ending up old and poor in Canada are statistically significant.” But they admonish us to not let those fears stop us “You have choices: let’s get down to the business of considering them.”

The sections of the book which deal with the economics of retirement planning guide the reader through creating an estimate of her likely sources of income in retirement and the amounts; projecting expenses in retirement; and sections on spending effectively and sustainably (including a chapter on housing). There are also sections on health, relationships, and work in retirement, including a chapter on self-employment.

After the reader has worked through her expected income in retirement and her projected expenses, the authors acknowledge that most readers will be “shocked and appalled” by the mismatch between their resources and their needs. If your projected income and expenses don’t balance, “you’ve got some work ahead of you,” they say.

Shilton and Hovanec acknowledge that it can be difficult to know where to start when discussing the topic of saving money to boomer women. “Many of us were raised by Depression-era mothers who taught us the basics in our cradles,” they note, adding, “but we are constantly surprised to run into otherwise savvy women who don’t know the ABCs of low-cost living.” The rest of the chapter continues with suggestions for reducing overall expenditures, framed as “living sustainably.”

This book is pitched at women who are on the cusp of retirement, those who have more limited opportunities to change their course than women who are ten years or more away from the retirement horizon. For the most part, it is assumed that the major savings efforts on the part of the reading audience have already taken place, and what there is to do now is trim expenditures, not put more money aside to fund them.

It is at this point that I think the book loses some of its sure footing. Although the tips the authors provide are useful and valid, my concern is that they may not go far enough - or they are coming too late to make a sufficient difference for the book’s readers.

There’s a paradox about retirement planning which the authors are faced with head-on: by the time the notion of “retirement planning” hits most people’s decision horizons, the opportunity to make a really significant difference in our financial situations has likely already passed.

The statistics about retirement savings in Canada are very clear: as a group, we are not saving sufficiently for retirement. The Canadian Institute of Actuaries, in their special report “Planning for Retirement: are Canadians saving enough?” (published in June 2007) estimate that fully two-thirds of us will not be able to meet our household expenses in retirement if we continue to save at the rates we are saving now.

But this book doesn’t take an unblinking look at that gap. Instead, there are general statements about the need to close it, but no clear, hard and fast bottom line about how to make radical change if it is required - for the women who have worked through the exercises in the book and adopted the savings strategies outlined and are still faced with a gap. (Or how to accept the reality that the need to earn income from employment may be essentially a never-ending part of some retirees’ lives.)

To be clear - I don’t know what the best approach to discussing this issue is, either. I just wonder if the authors’ relatively soft-pedaled approach best serves Canadian women as we prepare for the journey to retirement. And I acknowledge the difficulty the authors face in designing a framework to support all of us in getting a firm grasp on the reality of our situations, while our individual scenarios will differ significantly.

In addition, there is almost no technical information about the mechanics of how to invest wisely in this book, and the concept of working with a financial advisor or financial planner is given relatively short shrift, with less than two pages devoted to this topic.

Do the authors succeed at creating a path for boomer women to follow in planning for retirement? My assessment is yes, with the caveat that because our demographic is tremendously varied, it may be difficult for any one individual to find herself in its pages. But if you want a general guide to start you thinking about these issues, this is the best resource I’ve found to date. And if you read through this book when you still have opportunities to make significant course corrections to your existing retirement savings strategies, you’ll be ahead of the game!

A version of this post was originally published on The Best Kept Secret: Toronto’s Resource for Women 40+.