RETIREMENT PLANNING

 

 

 

Americans are increasingly healthy into their 70s, 80s, even 90s. Are you prepared for this fountain of youth in retirement? You may think so, but a risk index produced by the Center for Retirement Research at Boston College indicates that 51 percent of households are “at risk” of not having enough to maintain their living standards in retirement. The best time to start saving for retirement is today. If you're within 15 or 20 years of retirement, the decisions you make now can have a profound impact on the retirement you'll enjoy later. Do you have the right investments for the kind of retirement you want?

 

A study by Statistics Canada showed that 45% of Canadians hoped to retire before the age of 65, 24% planned to retire at age 65 or later and 31% just did not know. Where do you fit into these statistics?  

 

Soon-to-be retirees are asking themselves:

 

1. Will I be ok?

2. How will I fund a longer retirement?

3. Will my income last as long as I do?

4. How do I keep my options open just in case?

5. How can I ensure my money is protected and growing?

6. How do I make sure more of my money goes to me rather than taxes or fees?

 

The Plan 

 

It's a fact: Life changes happen. That's why flexible retirement income is the key.

Working with a qualified retirement advisor can help you put everything together, with someone who knows your plan inside out. 

 

An Income Annuity is a simple way to turn a portion of savings into regular guaranteed income - for a fixed period or rest of your Life. 

With Lifetime income annuities you will receive a stream of guaranteed income for as long as you live.

 

Since income needs can change, the best mix, we believe is to put some portion of savings into flexible investments like Segregated Funds that allow your money to grow on top of guaranteed annuities.

 

Guaranteed sources of income in retirement can include CPP (QPP), OAS, Pension plans, RRSP, TFSA etc... Some of these sources are inflation protected while some are not. Calculating the total income from these sources with consideration of inflation can help us determine how much additional income you may need in retirement. 

 

Prepare for the challenges:

• Outliving your retirement savings - Unfortunately, it’s not uncommon to underestimate your life expectancy. Even though 71% of advisors suggest planning for more than 25 years of retirement, only 27% of individuals expect to do this

• Inflation - Inflation can erode your buying power over the long-term. So if you currently need $60,000 to maintain your lifestyle, in 20 years you would need nearly double that income — $108,366 annually — to live comfortably (considering 3% inflation)

• Taxes - Tax laws change. Not long ago, retirees were caught by surprise by rising taxes. And many regretted not planning taxes before retirement.

• Market volatility - If you’re in or near retirement, market risk can outweigh the rewards. But if you have a longer investment timeframe, avoiding market opportunities could inhibit the growth of your retirement savings.

• Long-term care expenses - Nearly 70% of people turning age 65 will need long-term care at some point. Yet, the cost of care is rising. Typically, government health insurance does not cover long-term care.