Be Thrifty

How to Build A Low-Cost, High-Value Retirement – Part 1

While I truly believe that a happy, fulfilling retirement depends more on good health and great friends than on big savings, it would be silly to pretend that the amount of money you have at your disposal will have absolutely no bearing on your last few decades.

We will all need some cash, if only to pay for food, utilities, and housing.

And (barring the total collapse of society as we know it) we will all have some cash, as provided by the government, personal savings and/or a pension plan, and any revenue-generating opportunities we realize.

(I’ll talk about potential post-retirement side gigs in a future post.)

The aim, for those of us who are feeling a bit nervous about our retirement income, will be to continue to enjoy life’s true pleasures, while keeping a tight rein on our expenses.

I think that’s a completely achievable goal, and hereby designate this (totally-made-up-by-me) approach the “low-cost, high-value” retirement.

The Five Ways to Prepare for A “Low-Cost, High-Value” Retirement

I think there are five practical steps we can take now, during our working years, to lay the foundation for a retirement that delivers maximum satisfaction, for minimal cash.

They are:

  1. Adjust your retirement vision;
  2. Practice spending time instead of money;
  3. Develop a minimalist mindset;
  4. Invest in high-quality life essentials; and
  5. Learn how to cut costs (without sacrificing pleasure).

Because the first – adjust your retirement vision – requires a little more discussion than the other four steps, I’m dedicating this post covering that idea.

You can find a discussion of Steps 2 through 5 in How to Build A “Low-Cost, High-Value” Retirement – Part 2

OK? Let’s dive in.

Step 1. Adjust Your Retirement Vision

To my mind, the most important step when planning for a low-cost, high-value retirement is to spend some time thinking about what your post-work life will actually look like.

Your retirement might not look exactly like this (and that’s OK!)

According to every retirement planning ad I’ve ever seen, we should all expect to quit working forever between the ages of 55 and 65, and be prepared to (literally) set sail immediately with a silver-haired, (but obviously still extremely vital) partner for a life of golf, yoga and endless handholding on sandy beaches.

Ummmm. No.

For most of us, that scenario is totally unrealistic, for several reasons.

What’s the Right Retirement Age?

To begin, I do not expect to completely halt work by age 65, and neither do a growing number of Canadians.

An Angus Reid survey conducted in June 2022, for example, showed that many of us are choosing to postpone retirement due to:

  • A lack of savings;
  • Too much debt;
  • A desire to provide financial assistance to adult children; and/or
  • Mounting inflation and cost of living increases.

Delaying retirement for financial reasons makes perfect sense to me.

When the Canada Pension Plan was first established in April 1965, the average lifespan for Canadians was 69 years for men and 75 years for women.

Today, Canadian men and women can expect to live to age 80 and 84, respectively.

So, if you quit working at 65, you now need to be able to cover all your financial requirements for a good 15 to 20 years (or more).

It’s no wonder 66% of Canadians are worried they’ll run out of money before they run out of life.

You Don’t Have to Stop Working (Ever)!

To help augment their savings, many people are choosing to reduce their working hours after age 65, rather than quit altogether.

Others continue to work part-time to remain socially connected and intellectually stimulated.

And some simply love what they do too much to give it up.

This 106-year old tattoo artist from the Philippines says she’ll stop “once her vision gets blurry.”

This 104-year old neuroscientist didn’t retire until age 99. 

There’s also evidence that working past age 65 is good for your health.

So, I think the first question to ask yourself when envisioning your own retirement is “what is the right age for me to stop working (if at all)?”

What Will My Retirement Lifestyle Really Look Like?

My second issue with the standard retirement planning ad is the “money-is-no-object” lifestyle it portrays.  

And sure, who wouldn’t want to spend their time exploring foreign countries, sipping $30 glasses of wine in high-end restaurants, and lounging on sailboats?

Who doesn’t love a $30 glass of wine?

But as a picture of what the average Canadian’s retirement will look like, it’s way off.

(And, honestly, even if you could afford to do nothing but stroll by the ocean and drink coffee at sidewalk cafes, don’t you think that, eventually, you’d get a bit bored?)

It’s time to start imagining (and normalizing) a more realistic kind of retirement.

One that probably looks a lot like the life you’re living right now, but with significantly more time to pursue your personal interests.

Still sounds great, right?

I think so, too – but it’s not a given.

Many studies, like this one, show that a considerable number of retirees find themselves quite lost without the day-to-day structure and social interaction provided by a full-time job.

They’re bored, lonely and depressed.

Which is why an essential part of retirement planning is giving some serious, practical thought to how you’ll fill your extra hours.

If you’re not going to be emulating those glowing models in our retirement ad, what (exactly) will you be doing?

I have some thoughts.

The Three Building Blocks of a Low-Cost, High-Value Retirement

As our goal is a low-cost, high-value retirement, our core pursuits – the primary activities we organize our lives around, and spend most of our time doing – will need to be both rewarding (physically, emotionally, spiritually, or intellectually) and inexpensive.

The “inexpensive” criteria narrows things down quite a bit, as this means any activities related to our core pursuits should take place relatively close to home, and not demand pricey equipment or fees.

Building Block #1:
A Consistent Exercise Program

If you’ve read this post, you already know that regular physical activity should be a central component of your retirement lifestyle, to help ensure you stay healthy, happy and smart for as long as possible.

Invest in yourself. Make regular exercise a priority.

So, I think the first building block of a low-cost, high-value retirement is a consistent exercise program.

A good fitness routine will also help you keep your costs down, as it can fulfill your need for recreational activity and social connection, without adding much to your daily expenses.

Depending on where you live and what you like to do, low-cost exercise activities could include walking, hiking, racquet sports like squash or pickleball, swimming (indoor or outdoor), skating, cross country skiing, snowshoeing, or yoga (there’s tons of free yoga-related videos on YouTube).

Community centres can be a great resource here, typically providing admission to ice rinks, swimming pools, racquet courts, weight rooms, and group fitness classes, at extremely reasonable prices.

(My local community centre offers seniors admission to all facilities and many drop-in classes for $43.75/month, and also has a LIFE i.e., Leisure Inclusion for Everyone program to ensure people living on a very low income are not excluded from these recreation services.)

Building Block #2:
An Active Social Life

OK. Even if you fully embrace the Younger Next Year philosophy described here (i.e. exercise vigorously, six days/week) you’re going to need other (cheap but rewarding) ways to fill your day.

With apologies to confirmed introverts, that probably means spending time with other humans.

Spending time with other humans at the beach!

As explained here, staying connected to the people around you is a key factor in longevity, good physical health and overall wellbeing.

And, as with your exercise routine, being social does not have to cost very much (or anything at all.)

You could invite your friends to go for a walk, hang out at a park, or meet you for a cup of coffee.

You could join clubs that focus on an existing passion, such as gardening, reading, or cooking, or that will introduce you to a new interest, like birdwatching, geocaching, or knitting.

Even better, you could join a club that will help you stay fit and social at the same time e.g., hiking, biking, or tennis.

The options for connecting with others are unlimited, and making the effort to do so always pays huge dividends.

Building Block #3:
A Larger Purpose

Finally, as virtually every current retirement planning guide will tell you, we all need a larger purpose in order to thrive.

During the first two-thirds of adulthood, our day-to-day energy typically goes toward achieving big life goals like getting educated, building a career, finding a partner, and raising and launching our kids (while managing all the other totally unpredictable highs and lows thrown our way).

During the latter part of life, as those objectives are met, we need to find other ways to stay interested in, and engaged with, the world around us.

Usually, this involves focusing on something outside of ourselves.

This could be our family, our community, or a passion project that’s been simmering on the back burner for years.

Many people choose to volunteer in later life, in order to advance a cause they believe in, productively use their skills, meet new people, have different experiences, or challenge themselves.

Grandkids can also be a source of immense pleasure.

Or maybe there’s a creative endeavour you’ve been mulling, but never previously had the time for.  

Whatever it is, your new purpose needs to be compelling enough to get you out of bed every morning with some sense of excitement and anticipation.

(Feeling lost? Check out What Color Is Your Parachute? For Retirement: Planning A Prosperous, Healthy and Happy Future.)

Next Step: Start Building Your (Non-Financial)
Retirement Assets

OK. There you have it.

My take on the three core pursuits that make up a low-cost, high-value retirement: a solid fitness program, an active social life, and a larger purpose.

Obviously, these would be complemented by non-negotiable activities, like eating, sleeping, and cleaning, as well as more personal choices, such as reading, listening to podcasts and/or music, gardening, cooking, streaming, or (perhaps) working on a side gig.

Honestly, I’m wondering if 24 hours/day will be enough time to get everything done!

The point is, your retirement can still be fulfilling and fun, even if you don’t have the funds to travel extensively, eat at fancy restaurants, shop like a Kardashian and/or zip around town in your sports car.

Which brings us back to Step 1 in laying the foundation for a retirement that delivers maximum satisfaction, for minimal cash – Adjust Your Retirement Vision.

(Here’s where the how to plan part of “How to Plan for a Rich Retirement” comes in. 😊)

As I said at the beginning of this post, it is essential that you start to think seriously (today) about YOUR ideal retirement lifestyle, given your particular financial position, interests, and goals.

That way, you can start investing your time (today) in building the non-financial assets you’ll need to realize that lifestyle.

I already have a larger purpose (writing), so I intend to begin investing my time to develop my physical fitness and ensure my social network is solid.

(Stay tuned for future posts on how I manage to do that.)

I’m also planning to identify realistic ways to reduce necessary expenditures.

For more on that, check out How to Build A “High-Value, Low-Cost” Retirement – Part 2

What Do You Think?

Can you envision building a satisfying, low-cost retirement around a regular exercise program, an active social life, and a larger purpose? Please leave me a comment at the bottom of this page.

Do you think other people would enjoy reading this post? Please click the purple button to share on social media. (Thanks so much!)

Elizabeth Quayle has been an avid reader and writer for more than 50 years. Since earning a BA in English Lit (1991) and a Journalism Certificate (1996), she has written professionally for diverse public and private companies, as well as magazines, newspapers, non-profits, and government agencies. She started Live Well Anyway in 2023.

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