MONEY$TYLE

IN Magazine - - CONTENTS - By Al Ram­say

6 key re­tire­ment plan­ning de­ci­sions

Whether you plan to re­tire early or late, you need to learn how to plan your re­tire­ment

The New Year brings with it many rea­sons to con­sider our fu­ture. We typ­i­cally start by mak­ing res­o­lu­tions that will re­sult in health­ier and hap­pier ver­sions of our­selves. With­out a plan, though, do th­ese res­o­lu­tions ever be­come a re­al­ity? It is of­ten said that fail­ing to plan is plan­ning to fail. With that in mind, this is the per­fect time to make note of a few sim­ple best prac­tices that you can eas­ily put into place to help en­sure a happy and healthy re­tire­ment.

1. Start now

It is never too early, or too late, to start plan­ning. Whether you’ve just joined the work­force or are ap­proach­ing your re­tire­ment, it’s im­por­tant to get or­ga­nized. Start by defin­ing each re­tire­ment goal (e.g., in­come, travel, pur­chase a va­ca­tion prop­erty, etc.) and list­ing them in or­der of im­por­tance so that you can as­sign a sav­ings strat­egy to each.

2. Im­ple­ment a dis­ci­plined sav­ings plan

The key to sav­ing is to do it early and do it reg­u­larly. With this in mind, con­sider set­ting up an au­to­matic sav­ings plan to trans­fer funds on a con­sis­tent ba­sis (i.e., ev­ery pay) into a re­tire­ment sav­ings ac­count. In­vest a por­tion of ev­ery bonus you earn, if you’re so lucky as to get a bonus. Look at your em­ployee ben­e­fits pack­age to see if you have em­ployer-spon­sored sav­ings plans that are avail­able to you.

3. Un­der­stand the op­tions avail­able to you

There are many types of plans and, quite lit­er­ally, thou­sands of in­vest­ment prod­ucts avail­able to help you reach your re­tire­ment goals. Start with the ba­sic ac­count types in­clud­ing Reg­is­tered Sav­ings Plans (RSPs), Tax-Free Sav­ings Ac­counts (TFSAs) and non-reg­is­tered ac­counts.

4. Be strate­gic with tax plan­ning op­por­tu­ni­ties

In ad­di­tion to un­der­stand­ing the pos­si­ble tax op­por­tu­ni­ties avail­able on con­tri­bu­tions and with­drawals for the ac­count types men­tioned ear­lier, it is also im­por­tant to un­der­stand and con­sider what type of in­vest­ment prod­ucts you will uti­lize in each. For ex­am­ple, it would be wise to hold in­vest­ments that are taxed more favourably in non-reg­is­tered (tax­able) ac­counts and hold other in­vest­ments within the tax-de­ferred and tax-free struc­tures of RSPs and TFSAs.

5. Re­view and up­date your plan at least once a year

One con­sis­tency in life is change. Whether it is your em­ploy­ment and sub­se­quent in­come level, changes to re­la­tion­ships or the birth of chil­dren, al­ways ad­just your plans to re­flect your life to­day. It may mean that you are able to start con­tribut­ing more to your sav­ings plan, or that you have to re-eval­u­ate your goals and the time it may take to reach them.

6. Work with a pro­fes­sional

Suc­cess­ful re­tire­ment in­volves con­sid­er­ing other im­por­tant fac­tors out­side of in­vest­ing and sav­ing. For ex­am­ple: prospec­tive re­tirees should also con­sider es­tate plan­ning and char­i­ta­ble giv­ing. As re­tire­ment plan­ning may be a com­pli­cated process, you may want to con­sult a qual­i­fied and ex­pe­ri­enced fi­nan­cial pro­fes­sional. They will not only en­sure you take ad­van­tage of ev­ery op­por­tu­nity avail­able for you, but they will also help you stay dis­ci­plined and on track.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.