FINANCIAL FOCUS
ment lifestyle – what you planned to do, where you hoped to live, etc. – to meet your new reality?
INCOME
Just how financially affected you’ll be from an early retirement depends on several factors: how much you’ve already saved and invested, whether you’re married and have a working spouse, whether you’ve paid off your mortgage, and so on. In any case, though, you’ll need to answer several questions, including these:
Do I need to start taking withdrawals from my Tax-Free Savings Account (TFSA) and my Registered Retirement Savings Account (RRSP)? If so, how much can I afford to take out each year without running the risk of outliving my resources?
Should I adjust my current investment mix? If I haven’t yet started collecting my Canada Pension Plan (CPP)/ Quebec Pension Plan (QPP), should I do so now, or can I afford to wait until my monthly payments will be bigger?
wAre there any other sources of income I can leverage? You may want to work with a financial professional to address these and other key incomerelated issues.
INSURANCE
If you received health insurance through your employer, an early retirement could present you with a dilemma. As an alternative, you might be able to negotiate an extended severance package, which could provide you with health insurance for several months. Or, you might be able to get on the health insurance plan of your working spouse.
LEGACY
Many people want to take care of their family while they’re alive – and leave something behind when they’re gone. If you take an early retirement, you might lose your employer’s group life insurance. Of course, if this plan was not sufficient, you may have already supplemented it with your own policy, but, if you haven’t, you may need to shop around for some coverage, particularly if you have children still at home. You also may want to take this opportunity to review your key financial accounts to make sure your beneficiary designations still accurately reflect your wishes.
Going through an unplanned career transition is certainly challenging.
But looking closely at the four areas described above, and making the appropriate moves, may help you reduce some of the stress and can put you in a better position to start the next phase of your life.
Kevin Dorey is a financial advisor with Edward Jones. Based In Tantallon, Dorey specializes in helping individuals reach their serious , long-term investment goals. He can be reached at 902-826-7982 or kevin.dorey@edwardjones.com. Edward Jones is a member of the Canadian Investor Protection Fund.