Steve rossiter, a 50-year-old information technologist who lives in Erin, Ont., has a teenage son, a daughter in college, a mortgage on his house and a line of credit at his bank. He also has an interest in community theatre and a dream to, one day, own a bar.

What he does not have, however, is a financial plan of any kind.

“I’ve always considered the odds of me living to retirement as less than 50/50, and I probably won’t want to retire when I reach 65 anyway,” Rossiter says with a shrug. “Besides, I don’t know the first thing about retirement investing.”

It’s not too late to learn, say
financial advisors, who increasingly meet people in their practices with stories similar to Rossiter’s. There are several things advisors can do to help clients jump-start their retirement savings.

“There is always hope,” agrees Kent Coulter, an investment advisor with Canaccord Capital Inc. , in Edmonton.

John Cowman, vice president of Burgeonvest Securities Ltd. , a Hamilton-based investment firm, says it’s not surprising that many people are in Rossiter’s situation: “We’re talking about a lot of people who have three kids they’re trying to support with hockey, baseball, soccer. And then when the kids get to university age, the parents are forking over $5,000 a year if the kids stay home, and $10,000-$12,000 a year if they go away.”

Indeed, says Deborah Metcalfe, an investment advisor with Winnipeg-based Bieber Securities Inc. , sometimes it’s about the kids; sometimes it’s the expense of a major life event, such as a divorce; sometimes it’s an abiding trust that the government will take care of us in old age so retirement savings are unnecessary. And some people, she adds, are just irresponsible.

The first order of business is to encourage late-in-the-game players to decide on some numbers: how much will they need at retirement — and how much do they want to have at retirement? The “70% of pre-retirement income” rule of thumb may not work for everyone.

“It comes down to how much money people need,” says Coulter. “I can show you people who can live on $2,000 a month. Others couldn’t live on less than $10,000 a month.”

With numbers in mind, unpractised investors need to determine their comfort level with sourcing the investments that will get them there. Ideally, they’ve paid down their mortgages and some of their other debts by this point in their lives, and so have a bit more flexibility when it comes to entering the investing arena.

“If clients are trying to pay off mortgages as well, then they have bigger issues,” says Coulter.

Cowman believes strongly that the best bet is to urge clients to take out a bank loan in order to fill all of the RRSP space left vacant by themselves and their spouse.

“Max out to $37,000,” he says, to capitalize on the 21%/31% return split. “That’s pretty well the easiest route. Hopefully, the client will have the wherewithal to do it, whether it takes three years or five.”

For example, a client can buy a guaranteed investment certificate at a bank within an RRSP, then repay the loan out of the ensuing tax refund.

Coulter says that, for some people, that kind of risk is simply too much to contemplate. However, he points out, if a 50-year-old virgin investor envisions him- or herself retiring with an income of $4,000 a month: “The client is simply going to have to take some risk to get there.”

In a lot of cases, says Cowman, his clients take comfort from the fact that they have parents with property, the value of which will be passed down to them upon their parents’ deaths: “They can go out and borrow money against that house or a charge card and have that in the back of their mind.”

Just the same, says Metcalfe, investment newbies must stay alert to the possibility of falling victim to “get rich quick” schemes. These should be ignored at all costs, she says, no matter how tempting.

“A well-diversified, balanced portfolio of quality investments is where these investors should start,” she says.

That late-starting investors have hurt themselves by depriving their investments of years of compounded returns is a no-brainer, says Metcalfe. “The earlier you start,” she says, “the smaller the amount you have to put away each year because the timeline for growth is that much longer.”

@page_break@To wit: $100,000, invested in 2006 at 6%, will have grown to $178,067.80 in 15 years. But if that same amount had been tucked away 20 years earlier, when the investor was 30 instead of 50, he or she would have $384,325.56 at age 65 — 115% more.

“I haven’t exactly been on top of this financial planning stuff up to this point,” says Rossiter. “I’m not so far into the journey, though, that I can’t turn this ship around.” IE