Retirement Reality Check: Why I Need To Save Now to Avoid a Broke Retirement

“Congratulations to Our Dorset House Draw Grand Prize Winner 🎉”, it read. An email that came into my inbox from Omaze. A fundraising-lottery that gives prizes in the form of luxury houses, cars and cash to participants who enter their competitions by purchasing entries, with a portion of the proceeds supporting various charitable causes in the UK.

I've been entering these competitions for the last six months, dreaming of winning a house big enough for my family and my mother to live in. A place so spacious that we could host BBQ parties every weekend while my husband spins our favourite old-school jams.on the ones and twos.

For a second, when I saw the email start off with, ‘Congratulations’, my heart stopped because I thought I had won something. Unfortunately, I didn't, but as I scrolled down to continue reading the email, I read about the Omaze’s latest winner of the house in Dorset, UK that I really wanted. They took a quote from the winner, Chris Milnes, after he won, which read, "It still doesn't feel real to be honest. But I'm incredibly happy that I no longer have to worry about whether I can afford to retire, that I can give my kids a helping hand, can rid myself of the stresses of working and can actually afford to travel!". Can I tell you how genuinely happy I was for this man who I didn't even know, and could totally relate to every word he said in that quote?

Ever since my mother was diagnosed with dementia, which progressed rapidly within 12 months, I've had to manage her life on my own as her only child. I've watched her hard-earned life savings disappear due to the extortionate cost of placing her in a retirement home. This experience has made me realise how much I wish I had been smarter with my money by saving more and investing aggressively. I wish someone taught me about investments and how to invest in properties, stocks, bonds and index funds because I most likely would be a millionaire today.  If I die today, I have nothing to leave for my kids, and if I live into my senior years, at the rate I'm going now, I will be heavily reliant on government assistance, which would be minimal. God forbid I can't take care of myself because I would end up in a shitty-ass government funded nursing home that probably wouldn't give a crap about me as a human being.

Which then leads to my next realisation.

At only 75 years young, I don't think my mom ever imagined she would need care so early into her retirement. She believed she could live on her own, and that her savings would cover her living expenses and anything else she wanted to do in life until the day she dies.  Despite not earning much in her career, she was smart with her savings and planned for her retirement. However, she will soon have to leave the retirement home she's in and move into a government-funded long-term care nursing home because her savings is rapidly drying out.

When we're young, we don't think about our retirement future and how much retirement costs when you have to be placed in care. A basic retirement home for a dementia resident (and I’m speaking based on my mom’s care in Canada) can cost you just shy of $8000 per month. That’s double the amount she would have had to pay if she didn't have dementia.  A retirement home above ‘basic’ would cost more than $10k and upwards per month.

That’s when I started to do the math!

Whether I choose to retire in the UK or Canada and need some kind of around the clock care like my mother. I would need to have savings of over 1.3 million dollars to supplement my care. I can tell you right off the bat that my pension could not cover those fees and I would have to mainly rely on my savings, which is nowhere close to 1.3 million.

Retirement living is as costly as having a baby, which is ironic because my mom always used to say to me, “Once an adult, twice a child.”, and she wasn’t joking. If I want my final years to be great and financially worry-free, I’m going to need a substantial amount of money.

Reading Chris’s quote in the Omaze email and reflecting on my mom’s retirement situation opened my eyes to the crucial importance of financial planning for my family and me. Although I feel a bit low and discouraged about my current financial situation, I also feel motivated to change the narrative of my future for my family and myself.

I am determined to make stern steps toward financial success and freedom, and I still have about three decades to do this before I retire. Even though I am starting late in the game, it’s never too late to start.