Sun-kissed beaches, lapping azure seas, coconut drinks with little umbrellas; the word “retirement” conjures something different for everyone. For most, there is often some concern about being able to retire and still live comfortably. One way to alleviate this concern is to have a financial plan in place, before your retirement.

The first step in creating a financial plan is to determine the living expenses you will need once you stop working. Typically retirees spend more in the first few years after retirement than they do later on.

Where do you plan to live? If you are staying right where you are, you already have a good idea what the cost of living is. Maybe you will live in a smaller town where it is less expensive. A change we are seeing here in the Comox Valley is the recent influx of retirees from larger city centres, who are selling their homes at higher prices and purchasing here at relatively lower valuations. For these people, their retirement plan involves changing their lifestyle somewhat, since they are realizing tax-exempt profits on their current home elsewhere and injecting more investable money into their retirement portfolio. Many retirees see this as an attractive option.

What would you like to do with your spare time? Some retirees continue to work part-time or open a small business to keep busy and add to their retirement income.

If you plan to retire in high style, generating some additional income to support your lifestyle may be a necessary choice. Your retirement plan should include the type of activities you plan to do and an estimated annual cost, even if your hobby is gardening which, in the Valley, can result in expensive trips to the nursery when the deer have eaten your latest project.

How healthy will you be? This is a tough question for anyone to answer. Generally speaking, you may have an idea of your health situation by reviewing your own and your family’s medical history. Your health will affect your retirement plans in many ways, including early retirement or higher than expected medical costs. If your family has a history of living well beyond statistical life spans, this definitely should be considered as part of your plan as long-term care can be very expensive.

Is it important to leave an estate? If so, a retirement plan will give you an idea of whether or not it is possible and what the potential estate may include based on different scenarios. It may also give you the time and foresight to structure your portfolio in a more tax-efficient manner.

We all need a retirement plan, even if the plan is to keep working, which seems to be a growing trend among baby boomers. There are plenty of reference materials available at bookstores and libraries as a starting point. It is also beneficial to work with a qualified investment adviser to create a financial plan that suits your needs. It is never too early to have a financial plan.

Janine Martin is an investment adviser with Odlum Brown Limited, Member CIPF. Her column appears Fridays.