The last thing on the mind of a busy real estate professional is planning for retirement. When a person is younger and aggressive, any thought of retirement is far down on the list of things to consider. However, this postponement is often short sighted whatever your age. No matter how successful and career oriented you are, as age and time takes its toll, someday you must give it all up. Sooner than you think, you will join the ranks of the unemployed. Ready or not, you will be forced to retire.

Statistics Canada advises that 45 per cent of people enter retirement totally unprepared, financially and psychologically. The baby boomers are the most common in this group. They do not know what to expect in retirement. Television advertisements are misleading. The problem is largely created by insufficient planning for this eventuality, or more often, no planning at all. As the median age of those in the real estate business is steadily increasing, preparing for the day when you will have to step out should commence now.

Story continues below

Resolving the myriad of personal and other issues that could arise will be more onerous if you are uncertain about your longer term objectives. The germane issues revolve about around the age at which you wish to retire, your retirement needs, spousal and family considerations, health issues and financial matters. In this, you must be pro-active. Delaying could bring about unintended negative consequences. Time is not always your friend.

The big question is, “How much money will I need? Will the money I have, cash in the bank, government pension, savings and all that I know for sure will be coming in last as long as I do?” Financial preparedness is the assurance that you will have as much money coming in as is going out. If too much is going out, financial hardship will occur. In planning, allow for contingencies, changing circumstances and unexpected expenses.

There are many retired folks, not necessarily former real estate pros, who are in dire straits. They did no forward planning and didn’t save any money. It says in The Book of Ruth, “Gather here a little and there a little to provide for the infirmities of old age.” This is wise advice. Many elderly people find that their money is insufficient to support themselves above the poverty level. They must take on part-time jobs, or find income producing methods to supplement their limited government pension(s). So far as I know there are no pension plans provided by real estate brokerages. You are on your own.

The purpose of meaningful pre-retirement planning is to arm yourself with an understanding of what is feasible and what is not. There are several paths you could take, each depending on how and when you leave the business. You need to make your plan flexible in case you change your mind about some important factor or unforeseen circumstances that may come along the way. It will provide you with an understanding, or at least an awareness of all of the options that are open to you that take into consideration your experience and intentions.

Select the appropriate time to retire. This governs the actions to be taken, the critical path of what you do first, second, third and the timetable. You must answer the questions, “How much money will I need to carry me from the date of retirement until the end? Where will it come from? How long will it be before the source dries up? What is the possibility of me outliving my money?”

The initial steps include:
  • Identifying your most important objectives.
  • Bringing you spouse into the process. What you do during your retirement will affect your spouse as much as it does you. Ensure that she/he is in agreement with your intentions. You might include a trusted professional planner to render assistance and advice.
  • Establishing a time line for entering retirement.
  • Creating a strategy. Formulating a critical path timetable.
  • Developing a financial plan for yourself and your spouse, one that ensures a comfortable after-retirement living, considers contingencies and protects your estate.
  • Addressing the legal and tax problems you could have. Determining the best way to minimize income taxes.
  • Developing a contingency plan.
  • Considering all of your options.
  • Expecting a major readjustment period.
  • Getting your bills paid. It is vitally important that you enter retirement without debt.
  • Remember! Retirement planning is not a single event. It requires time and effort.

Timing is all important. Lay out the ground rules while you are still working.  Allow yourself sufficient time to get all of your ducks in order. Develop a written plan and leave some open spaces in it that you can later fill in if things change. Start now: not someday when it becomes clearly a do or die situation, or when, for some reason, you must move on. Far from being an end point, retirement marks a new beginning, a gateway to the next chapter in your life.


  1. Thank you for this valuable REM article, Lloyd, and your pointed biblical reference. You write, in part:

    ‘The Book of Ruth, “Gather here a little and there a little to provide for the infirmities of old age.” This is wise advice.’

    (But then she was abundantly blessed. She was sent Boaz.)

    Maybe someone with real life experience or connections could address, on REM, the topic of Wills. Their preparation specifically attuned to REALTORS(r), many of whom perhaps don’t even have a will. An ideal opportunity for office managers to invite someone to their office to make a presentation on the these and related topics?

    It’s not sufficient to say call your local lawyer, believing anyone can prepare a will. It’s so important that your will be prepared properly.

    Now that we have the world of the Net to deal with, it’s important to take new things into consideration, and perhaps update an existing will; to engage the services of someone knowledgable.

    Do you know how to shut down your website, at your demise, for example? Or sell it? You know what it’s worth, if anything.

    Shut down your Facebook account, your Twitter feed and such? And you have appointed someone to do so?

    All your “tools of the trade” are assets. Some worth more than others.

    What will happen to your “business book?” (So many agents are independent contractors; some have set up actual subset companies within a company.) Your database? Your hard drive? Your key fobs? Have you arranged what happens to all this, at your demise? Have you even thought about it all?

    Does your contract say all your materials at your demise, belong to or become the property of the company you work for?

    Does the company have your passwords? and if so, is that information stored in a safe, under lock and key? Did you read the corporate contract fine print? Does your contract even address your demise and such closing out of your business?

    What happens to outstanding commissions owed to you on yet to be had closings, if such is pending as at the time of your demise?

    Does a REALTOR(r) who owns rental properties (to whom does the rent get paid?) require special will preparation attention? Aside from having a chartered accountant?

    There are so many kinds of assets, and the preparation of wills that are not standard fare can be extremely costly just to set up, requiring weeks, and sometimes months in billable make ready hours.

    If there is more than one person on the receiving end, equitable distribution can create nightmares in preparation. And if disbursements are to be fractured in any manner, you will need to engage the services of an estate planner; one with access to money management skills, not just some family member, or Tom, Dick, or Harry, even as executors
    and or trustees. That alone is sometimes a massive undertaking that requires specific investment reporting skills, outside the limits of many lawyers. Is your chosen lawyer honest enough to say your will requirements are outside his area of expertise?

    Not unlike the real estate command that requires agents commit to seeking outside expert advice when taking on an agency commitment beyond their personal expertise, your will-writing lawyer may find himself in the same situation.

    Banks have estate management counseling departments, but bear in mind the management costs in estate planning can eat up much of the assets. Ever try to get that department to return phone calls? Good luck.

    Ask ahead of time what all the costs and fees are. (Banks mostly don’t like people who ask questions; don’t be intimidated.) And get it all in writing.

    The bank estate planning you choose may require you to work with their legal people, or ones on their recommended list. Be prepared to set aside many hours to prepare all the needed details. The more work you do upfront the less billable hours will accumulate with your will providing persons or their team.

    Speaking of executors and trustees, I came across this information on line a while ago. You may learn a great deal by reading this blog link. A worthwhile agent blog entry:

    Carolyne L ?

    Afterthought: does anyone out there have experience with identity theft or having been declared dead, when they aren’t? There are some interesting documentaries. Either can really cut your life short: literally.


Please enter your comment!
Please enter your name here