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Coach’s note - I found this in my archives, written about 5 years ago.  I still stand by it!

Oy Vey. It’s RRSP Time.  They tell me I’ll need about a million to retire in comfort, but I figure if I just use TransLink (public transit) til death, no longer need to buy pantyhose for work, and holiday on SaltSpring instead of, say, Tuscany, I only really need half-a-million.  $500,000.  Saved.  Ummm, let’s see:  Salary in the mid-$50s … yes, that would take me about ten years or so, if I don’t eat, shelter myself and if I cancel Tier Three Food TV (since I won’t be eating).  Then again, I could just plan to work til I drop.  Or buy more lottery tickets.

Apparently there actually are people who make their full RRSP contributions.  I’m not one of them (and if you are, go away.  Read something else.)   This is for the 66% of us British Columbians who didn’t contribute at all, according to Stats Can (and for the record, the 34% who did contribute only scraped together $2,600 on average).  We’re the ones who have mortgage or rent payments, the size of which would buy a gold-plated house in any other city.  We have childcare payments.  Student Loan payments.  Car payments.  Line of Credit payments.  And then the washing machine breaks.  So that extra $1,000 monthly RRSP contribution comes from … where, again?

What are we to do?  A few ideas:

1.  Define our own terms for retirement.  How will our cash flow needs mesh with the rest of our financial picture?  For example, will we own a home by then?  In what ways might our expenses decrease? Are we striving for an “annual-golfing-holiday in Palm Springs” style retirement or would we be content with something simpler?

2.  Do the RRSP Thing anyway.  It’s tempting to despair on the whole RRSP project.  However, all the talk  about tax-free, compound interest is for real. Don’t be intimidated by all the literature throwing around obscene suggested-$1000/monthly-contributions (I mean, honestly!).  I started with $25.00.  Trust me: your few dollars will start to gain interest, which gains interest, which gains interest etc. etc. Your initial few dollars will start to look surprisingly decent.  Frankly, I’m pretty pleased when I look at my portfolio now. Furthermore, again and again I’ve seen people make small efforts, and be it God, the Universe or sheer luck, through some mysterious means the small efforts result in disproportionate reward.  Even if only standard returns come, saving for retirement, once started, will slowly but surely accumulate.

3. If needed, take out a loan.   This will force savings (I still resort to this tactic. My willpower is as susceptible as anyone’s) and at these interest rates you’d be hard pressed not to make a net gain.  RRSP loans are usually easy to obtain, since they’re backed by the asset of the RRSP, so if you’re ‘credit challenged’ still give this a go.

4.  Get Creative.  We don’t have a lot of models for preparing for retirement beyond accumulating huge income-yielding assets.  But there are other means.  One couple I know very happily moved to a developing country where the exchange rate keeps them in high style.  Church groups and other organizations have come up with interesting co-op living solutions.  There could be many more ways to ‘do retirement’ that don’t require a million in the bank.  (“Logan’s Run” solution is not one of them!)

These are a few approaches to the daunting task of preparing for retirement.  One last word.  All the graphs and investment charts in the world cannot convince me we live in a predictable world.  Making peace with uncertainty in general and retirement in particular may be the most freeing way to think about retirement.  Within that uncertainty, be thoughtful, absolutely.  But be panicked if you cannot make the industry’s recommended contributions?  Not me.  I have payments to make on a sweet, little condo.  A washing machine to repair.  And Food TV to pay for, of course.

If you’d like an easy-to-understand RRSP manual in the form of an e-booklet, send me an e-mail with “RRSP-me!” in the subject line.

My Financial Valentine.  1993. 

It should have been the date of a lifetime.  Mr. Tall, Dark and Handsome, fluent in French, sweet, worldly (a doctor to boot!) asked me out.  We were going to Le Gavroche, surely a Dream Date for my mom’s generation.  For me in the 1990s, It was my Worst Nightmare.  Granted, he was a doctor, but that didn’t guarantee he’d pick up the cheque, and I simply didn’t have Le Gavroche kind of money.  But not a chance I’d admit it.

So I put on my sexiest little dress, practiced my French and hoped to hell the Visa-Cupid would magically raise my credit limit that very night.  Needless to say, my flirting skills were diminished as I silently calculated each $25-bite-of-dinner and $30-sip-of-wine. A real conversation killer.

Why is it that we can have sex, bare our childhood-trauma secrets and even get all the way to the altar yet remain coy about matters of personal finance?  What is it about money that is so acutely sensitive?  That feels too vulnerable to disclose to the one who sees us the morning after?   Dr. Phil, any ideas?

All I know is that this matters.  Stress and fights about money can severely cripple relationships.  Financial conflict is one of the leading causes of divorce.

I offer as a Financial Valentine the following points on introducing financial conversation into romance:

1.  Decide here and now that a Financial Discussion, even if awkward and un-sexy, is a foundational part of any grown up relationship.  The time for it may vary, but until it occurs, the relationship hasn’t moved out of fairytale status.

2.  The initial conversation may prove easy, with enough agreement to function well together.  Then again, it may be unpleasant and scary.  Just as in all conflicts, you may need to bring all your negotiation skills to the table (and maybe some good beer).  This is not insurmountable, but a chance to grow as a couple.  It may require  several attempts, and that’s OK.

3.  Eliminate Judgement.  There are usually deep seated reasons for our financial behaviours.  Tread carefully and respectfully.

4.  Stay Optimistic.  This is a chance for you, as a couple, to define and shape healthy operating principles.  Ultimately, this can only serve you well as you get on with the wonder of love and relationship.

Happy Valentine’s Day, and best wishes to those who embark on financial discussion with your partner.   And remember, its never too late to begin a financial conversation, no matter how far down the relationship road you are.