Work

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  By Guest Blogger Doug Rowat

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Many of us love our jobs, myself included.

Working can provide the satisfaction of helping others, intellectual stimulation, sociability and an overall sense of purpose.

However, the academic research suggests that most of us have a desire to work less and, ultimately of course, to not work at all. Unsurprisingly, Gen Zers desire the shortest work weeks of all. Nevertheless, working less is indeed the longer-term trend in our country. According to StatsCan, Canadians now work roughly three hours less per week than they did in the 1970s.

Average hours worked per week by Canadians.

Click to enlarge. Source: Statistics Canada

The bigger, and far more complex, question is when can you stop working entirely and how much money do you need to do this? The 2025 BMO Retirement Survey says that Canadians, on average, think that they need $1.54 million to retire. But before you accept this number as gospel, consider that Fidelity Canada’s 2025 Retirement Report, which in fairness did survey an older age group, pegs the magic retirement number at only $1.02 million. Still, the results of most retirement surveys vary so widely that they’re largely unhelpful, even misleading. So, when deciding whether you’re on track with your retirement plan don’t base it off of retirement survey results.

Retirement planning is an involved, detailed and highly circumstance-dependent process. However, I advise clients that answering just two key questions makes for a good starting point.

The first: “What do you need to live off of in retirement?” This seems obvious, but I ask this question because I always get the same answer: “Oh, we live pretty modestly.” An honest answer perhaps, but otherwise meaningless. For some clients, living modestly means sitting on the back porch watching sunsets. For others, it means racing Porsches on the weekend. How you plan to live in retirement requires an actual dollar figure to back it up.

Detailed household budgeting and listing potential retirement expenditures (how much travel per year, for example) is necessary. In other words, it requires plenty of thought and the hard work of number crunching. Lifestyle expenses are just that—expenses—and these have to be presented as a cost (i.e., an actual dollar amount). Only then can an advisor do the work of determining whether a client’s investments are even close to supporting such a lifestyle.

The second question: “What’s the financial legacy that you plan to leave to family, friends, charitable organizations and so on?” Again, a highly personal question. For some, it’s “I want to leave every penny to my kids.” In other words, they want minimal principal erosion throughout retirement. For others, it’s “Screw it, I want the last cheque to bounce.” Obviously, if you’re in the eroding-principal camp then you have much more flexibility with your retirement lifestyle. But this question is also prone to the same vague answers (“Well, we’d like to leave a modest amount to our kids.”). Again, meaningless. How much of your wealth exactly, or at least what percentage, do you want to leave to them?

The finer retirement-planning details—tax avoidance strategies, effect of inflation, other potential sources of income, life expectancy, etc.—will come into play later. But it starts with answering those two basic questions: How much do you need and how much do you want to leave. And the answers must be precise. As advisors, we can help modify the answers if they prove unrealistic, but it must begin with an exact number. Vagueness has no place in retirement planning.

How much is actually needed to retire is a complex question, absolutely impossible to answer in a generalized way, but here’s what I can assure you of: The old adage “money doesn’t buy you happiness”, in aggregate, simply isn’t true. Money very much buys you happiness. The below chart plots life satisfaction versus wealth. I highlight the lower extreme (Afghanistan) versus where we are in Canada, but the global trend is clear: having more money equals a better life. Gen Zers should think about this chart if they think that the road to happiness will run through a 20-hour work week.

Self-reported life satisfaction vs GDP per capital 2021

Source: Wellbeing Research Centre, OECD, IMF and World Bank. 1o represents the highest possible life satisfaction. GDP per capita is adjusted for inflation and differences in living costs between countries.

So, the more money you have, probably the happier you’ll be in retirement, but the retirement-planning process is also going to be hard work. Be prepared to abandon vague language. Be prepared to number crunch. Be prepared to support lifestyle expectations with precise dollar amounts. And be prepared for some occasionally uncomfortable conclusions (“So, we may have to work longer to afford this?”).

But we can help. And start the process by answering my two questions.

And be precise. Answers that include the word “modest” will not be accepted.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Investment Advisor, Private Client Group, Raymond James Ltd.

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About the picture: “Murphy from Powell River has made your blog before, but we figure he is so cute he deserves a repeat!” writes Scott. “Happy Holidays to you and your crew and thanks for the blog!”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/12/20/work/