Is It Worth It? The Hidden Costs of Skipping Professional Financial Advice in Retirement

Canada Life recently surveyed Canadians over 55 about their retirement experiences, especially in light of rising living costs.

The findings revealed a concerning trend: nearly 80% of retirees chose to manage their finances without professional guidance. Unfortunately, this DIY approach has left nearly 30% of them disappointed, as their retirement isn’t turning out as they had hoped. In contrast, those who did seek professional advice were more likely to enjoy a positive retirement experience.

One of the major drawbacks of not consulting a financial professional became evident when 11% of retirees admitted they severely underestimated how much money they would need. This lack of foresight has led to financial struggles in retirement, making life after work more challenging than anticipated.

Beyond financial concerns, more than a third (36%) of retirees faced unexpected health issues that disrupted their plans. Although 27% managed to stay happy despite not living the retirement they envisioned, the reality is that many were unprepared for the financial impact of these surprises.

The survey underscores that money—or the lack of it—is a critical factor in retirement satisfaction. The ongoing inflation and cost-of-living crisis have blindsided 21% of retirees, who didn’t factor these rising costs into their retirement plans. Additionally, 13% faced unexpected expenses, and 12% realized they hadn’t saved enough to fund the retirement they wanted.

Tom Evans, Managing Director of Retirement at Canada Life, emphasized the importance of professional advice:

“These findings highlight the risks of going it alone in retirement planning. Financial challenges like rising costs and insufficient savings are significant, but unexpected health issues can be even more devastating, shattering the dreams of many.

“Planning your retirement and ensuring it is flexible enough to navigate the many challenges you will face is vital to feel in control to enjoy your later years. Engaging the services of a qualified financial professional early on is a fundamental part of that process. A professional will not only be able to help with product choice, investment selection and tax, but will help you navigate any unexpected bumps in the road along the way.”

At AJ Wealth Management, we conduct complimentary workshops on Financial Literacy to help you plan more effectively for your financial goals—both short and long term... Retirement being just one piece of the puzzle.