Are you ready for retirement? It seems that question is a dreaded one for most people. But retirement planning need not be daunting! Here is a simple guide that will help you get on your feet and come up with a solid plan so that you will be ready when it comes time to relax and unwind from the perpetual daily grind.
How much money do you need to save for retirement?
To avoid unveiling a mystery box, use the Canadian Retirement Income Calculator provided by the federal government. There are no hidden agendas, it is just a simple (and sometimes brutally honest) estimated account of how much money you will need to retire, the impact of inflation on your retirement income, and much, much more.
For more information on sources of retirement income, check out this link where you can learn more about public pensions, CPP, OAS, RRSPs, employer pensions and other sources of personal savings.
Have you considered working during your retirement? It might be worth looking at the federal government’s link on the impact of working during your retirement on your OAS, CPP or other pension income.
Is It Worth Selling Your Family Home?
In addition to the federal government’s link on housing options for seniors (which provides an excellent resource on housing costs) another informative tool is this worksheet which illustrates the financial impact of downsizing. The worksheet explains in detail important information such as any potential income you might generate if you invest your money after downsizing.
Are you unsure if moving into a condo will actually lower your monthly costs? Use this worksheet to answer that question.
How Much Will Your Retirement Investments Grow?
When it comes to retirement planning, you want to leave nothing to chance. Here is another worksheet provided by The Globe and Mail where you can get an approximate idea of return expectations on your investments.
Who Do I Go To For Advice?
There are plenty of retirement planning experts out there whose advice you can seek. Instead of going to one who will try to sell you investments, try to find a financial planner who charges an hourly or flat rate, and whose sole job it is to give you genuine advice. While there is no simple directory you can look up of these planners, this 2012 listing from MoneySense magazine will give you a good head start on your search.
If you want to save every penny you have, perhaps using a fee-only financial planner may not be the route for you. You can use online advisers who provide automated management of exchange-traded funds and low-cost portfolios. Running your own portfolio through an online broker can substantially reduce your fees so you can just focus on the growth of your investments! All you need is some time and patience to do all your homework online and you can be ahead of the crowd.
What Kind of Investments Should I Make?
The best answer to this question is that you should not invest in anything you do not know. Take some time to familiarize yourself with investment options that are of particular interest to baby boomers such as dividend stocks, ETFs, preferred shares and bonds. Many of these investments are tax-efficient or low-risk. In order to make the best investments you will need to take the time to read through all of them alone, as well as with a financial planner, so do what feels most comfortable for you and your goals.
With patience, a few deep breaths and the right advice, retirement planning can be a breeze. Being prepared will help to ease any concerns about the future, and help you look forward to enjoying the days when you no longer have to “clock in” every day. I hope this guide will get you started on the right path!
