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Take control of your Retirement!

Smart planning today will help you retire the way you want! Did you know that 1 out of every 5 Canadians will be retired in 2020? By 2030, the number will approach 1 out of every 4.1.  With such a significant number of Canadians approaching retirement and living off a fixed income, now is the time for investors to take control of their retirement income plan.

Nothing will be the same after you retire. If everything goes according to plan, you will be able to do what you want, whenever you want. Sounds good, right? That’s why it is so important to get things in order. Here are key topics that you’ll need to consider:

  • Your ideal retirement lifestyle, including large expenses like vacation properties
  • Your retirement date
  • Potential health issues based on family history
  • Taxes, today and in the future

After you clearly document this and any other vital information, ask yourself “How much will I need?”

When will you retire?

  • 46% retired as planned
  • 48% retired earlier than planned due to circumstances beyond their control
  • 6% retired later than planned due to circumstances beyond their control

How will you generate your retirement income?

  • It’s important to note that the rules for Canada Pension Plan (CPP) and Old Age Security (OAS) are changing in order to meet the needs of an aging population. While aging investors would typically turn to bonds, historically low interest rates are forcing them to consider higher-risk alternatives.

Although your assets may be scattered across different accounts at different investment providers/planners, you will likely be able to generate a retirement income from a number of sources:

  • Registered plans, such as a Tax-Free Savings Account (TFSA) or Registered Retirement Income Fund (RRIF)
  • Non-registered investments and savings
  • Government plans, such as CPP and OAS
  • Home equity
  • A private pension from your employer

Ensuring that these potential sources of income are working together with the appropriate investments that suit your individual needs can take time. Advice can have a positive and significant impact on the growth of your financial assets. Households that receive advice for 15+ years accumulate 2.73x more assets than households that do not receive advice.

Advisors help with more than just savings. Advisors can also assist you in your efforts to reduce your tax burden and help you organize your estate so that your wishes are met. When it comes to planning for retirement, you are not alone, if you don’t want to be.

 

By: Darren Reith