Never too early or late to plan!
By Caroline Nevin
Since I joined the CBA staff in 1997, many things have happened to make me proud to be associated with the organization. Two significant initiatives really stand out in terms of how we’re positioned to help lawyers prepare for life post-law.
First, the CBA created the first lawyer-driven, lawyer-serving group RSP plan in the country, through CBAF (Canadian Bar Association Financial Services). The massed invested funds of Canada’s lawyers, staff and families are being tapped to ensure exceptional saving and returns for the legal profession. More importantly to me, CBA members get an extra discount that means that their dollars go even further. For that reason, after significant due diligence, the B.C. Branch staff switched and we are now completely invested with CBAF. We encourage all CBA members and their firm staff to do the same.
Second, in B.C., the CBA led the way in protecting RRSPs, RIFs and other non-pension retirement savings vehicles. Every lawyer in B.C. will benefit from the work of the CBABC to ensure that lawyers who do not have pensions have their retirement savings protected in the same way that pensions are when it comes to creditor claims.
I tell you this because all of the research I have reviewed when it comes to the retirement preparations of lawyers says that the profession is woefully unprepared. Perhaps this is exacerbated by the fact that 75 per cent of the firms in B.C. practice are solo practitioners, with no-one but themselves to rely on.
I surveyed about 80 CBA members who were within the age of considering retirement. I also surveyed a small number of members who have already retired. Here is what I can tell you.
First, most respondents had 30 years of call or more. Most of those who responded intended to retire in the next 5-10 years (20 per cent intended to be retired sooner). By far, the majority of pre-retirement behaviours included “actively talking about retirement with my spouse/partners/others” and “worked out a financial plan, either by myself or with an advisor.” Many (85 per cent) had either already decreased hours/clients or were intending to decrease their hours/clients over time.
Of particular interest to all of you should be the fact that only 21 per cent of practising lawyer respondents to this survey had taken up new, or renewed old, hobbies or social activities. Across all demographics and professions, engagement in activities unrelated to work is highly related to a happy retirement. One of the most important factors recommended by lawyers who had already retired (second only to ensuring you have enough retirement savings!) is investing in other interests. Anyone who knows and cares for lawyers knows that the profession consumes a large part of one’s life; it is exceptionally important that someone who intends to leave that life consider and invest in activities outside of legal practice.
It was a relief to me that even in this time of economic uncertainty, 83 per cent of lawyers who responded to my survey were either fairly confident or very confident of their financial preparedness for retirement. However, even among those who express confidence, a very large proportion (79 per cent) were “somewhat anxious about the world economy.”
What fascinated me in terms of response to my survey was this: many lawyers are adamant that they will work until they drop, they love it; a smaller number of others can’t wait to retire, and wish they had never entered law. I suspect that none of this is unique to lawyers; my only advice is that everyone who reads this considers their personal wishes and takes the time right away to figure out the financial plan that helps them get there (and please consider CBAF when you’re doing that!).
This article was published in the December 2011 issue of BarTalk. © 2011 The Canadian Bar Association. All rights reserved.