Retirement
Planning for the Future..While Living the Present
Planning for retirement while living life along the way takes some time and expertise. This is where we can help.....
We all have experiences where friends or family members are so devoted to retirement or financial independence that they can't live life along the way. And sometimes they don't make it to retirement to enjoy their savings.
And we have other friends or family that live entirely for today and won't have a dime saved for retirement.
Retirement planning is best done as part of a full financial plan. Consider the following:
Financial planning is about creating a balance between living today, saving for medium term goals (ie. child's education or cottage) and investing for retirement. It's about reducing your debts with low interest rates and taking advantage of government programs to help you save for your children's education. It's about balancing saving for retirement that saves you taxes now (RRSPs) and investments (Tax Free Savings Account) that will save you taxes in retirement. It's about properly protecting your family with insurance that fits within your financial plan and doesn't sacrifice your goals. It's about being able to "de-stress" with hobbies or vacations and enjoying life along the way.
You may be asking, "What if I just max out my RRSP limit every year? Won't that be enough?". And yes, you could be fine but, if all your money is tied up in RRSPs, you'll be paying a ton of money in taxes when you take out enough to replace 4 or 5 cars during your 30 year retirement.
There are better ways to plan out your retirement savings - and we can help!
Creating Your Retirement Lifestyle
Retirement planning involves much more customization than ever before. Your financial planner has to understand what your retirement lifestyle will look like before recommendations can be made on your financial plan.
In today’s workplace, we see several scenarios for retirees and here are a few examples:
- People taking early retirement as soon as their pension will allow. Then they take another job to keep busy and cover living, travel, hobby, etc. expenses.
- Business owners that sell, people with large retirement savings or employees with excellent pensions that choose to retire and stay out of the workforce. They may volunteer or help family or golf or travel.
- People that will continue to work as long as their health will allow. Sometimes out of financial necessity but often out of personal preference.
In any event, we meet with people from 50 to 70 years old where discussing their retirement lifestyle becomes a big part of their financial plan. Once we have provided for general living expenses, more questions come up:
- What are your plans to replace your car?
- What are the typical costs to maintain your home each year?
- How much do your hobbies cost? Golf memberships? Travel?
- Do you see your spending habits increasing or decreasing over the next few years?
- What are the causes and people most important to you and what do you spend on them each year?
- Do you know who will take care of you when you can’t take care of yourself?
Once you know these and other costs, we can create solutions to help clients enjoy their retirement in the lifestyle they can afford.
Developing Your Retirement Income Plan
Having enough to live off is one thing…..Having more flexibility and more tax advantages from the same amount of money is another!
We help clients create a tax efficient retirement plan starting many years in advance of retirement. Using a strategy we call “How the Wealthy Do It”, we save clients thousands in taxes while they are working and create a non-registered portfolio that can provide tax efficient retirement income in the future.
By properly balancing your RRSP and non-registered investments prior to retirement and then planning your retirement income, we help clients qualify for more government benefits and pay less tax in retirement.
Prior to retirement, we’ll:
- Review your pension statements to understand what you can expect and any penalties for early retirement or benefits of staying longer. We’ll also look to protect your spouse with appropriate beneficiary designations.
- Review your RRSPs and other investments for growth and income performance as well as most advantageous time to start withdrawals.
- Review your tax returns to plan tax efficiencies to give your accountant something to work with to reduce your taxes.
- Create a debt reduction plan, if necessary.
As you enter into retirement, we’ll have created a portfolio that provides flexibility and tax-efficiency using proven income products that will make your money last a lifetime!
