Retirement Investments: Why Self-Managing Could Help Scratching the Itch

TORONTO, ON – As retirement approaches, many individuals consider how to spend their newfound free time. While activities like golf, bridge, or even iron-man events may appeal to some, others are drawn to the idea of managing their own investments. This approach can seem attractive, especially for those looking to save on the fees charged by financial advisers.

One reader, recently retired with a substantial retirement savings, expressed interest in a more hands-on approach to managing their investments. Currently, their investments are under the care of an adviser who charges a notable 1 per cent fee. The concern over these fees has prompted the idea of self-managing their investments to save on costs.

However, personal finance experts caution against this approach. They advocate for setting up a separate, smaller investing account with an online broker, allowing retirees to satisfy their desire for hands-on investment management without risking their retirement savings. The argument is rooted in the aging process, as managing investments may become more challenging as individuals grow older.

The reader’s interest in learning more about investing is well-aligned with the general advice for retirees to continue engaging their minds and learning new skills. Yet, there is a distinction between learning about investments and actively managing a portfolio that serves as a key source of retirement income and potential inheritance for family members.

Another suggested approach for retirees is to start afresh by opening a self-directed tax-free savings account at an online broker. Doing so allows them to test the waters without putting their existing savings at risk.

This proposition would provide the opportunity to learn and grow, strengthening new retirees’ understanding of investment markets and bolstering their financial knowledge without the risk of damaging their retirement income.

As the retirement landscape continues to evolve, the conversation around suitable retirement activities and investment management becomes increasingly critical. Finding a balance between staying active and engaged in retirement while also ensuring financial security is a key consideration for many retirees.