Awareness Series #9|Retirement Planning

10 Sep

Contemplating retirement and its challenges

People are living longer.  Interest rates are lower. Everyone knows someone that was forced to withdraw funds from their investments in the down market of 2008.  When we add in the almost daily barrage of negative media stories about the next financial crisis, it is not surprising that so many investors are nervous.

Retirement Planning
Source: Google Images

Although we may not be able to control the media headlines or when the stock market will move, there are some basic things that we can control through planning.  This includes defining what lifestyle you want in retirement, the annual income you will need and where it will come from – savings, investments, government programs, pension etc.

Whether your retirement dream involves a quiet lifestyle, part-time work, volunteering, visiting children and grandchildren across the country or lots of exciting travel that you never had time for during your working years, I can help you get there.

Together, we look at your current income, projected income (including the amount of government benefits you will receive; we also discuss when to take them), annual expenses and savings levels.  We can then project how much you can realistically save.

We look at your investments and determine whether the projected growth will give you enough money to retire on your target quit work date. You don’t want to be taking on riskier investments in your sixties.  It is also important to be aware of your debt levels as well as your ability to service said debt.  Please also bear in mind that secure investments like GICs do not always offer the best income protection.  For example, I do not recommended that you invest solely in GICs when the interest rate is lower than the rate of inflation.  Last but certainly not least, we plan how to protect your estate for your children, if that is what you wish.

If the numbers work, great! If not, we identify changes that will get you closer to the ideal.  For example, if you want to better protect your retirement income, I often suggest my clients consider “streaming” their investments.  When streaming, only the funds needed for the next two to three years are kept in cash or GICs.  The rest of the funds are invested in the market where your money has the potential to grow faster than the rate of inflation.

You may not be familiar with the benefits of various insurance products such as Long Term Care Insurance.  This insurance provides the funds for home care or the cost of living in a nursing home.  It takes effect when you cannot perform two or more activities of daily living or ADLs.* Although Long Term Care Insurance can be costly, it is worth considering, especially if you are single and don’t have children or family to help with your care.

Planning for retirement can be challenging. I help my clients set and achieve specific financial goals and provide advice on investments and insurance. Contact me at mheenan@assante.com to find out how I can help you achieve your ideal retirement.

It’s just good advice.

*There are six basic ADLs: eating, bathing, dressing, toileting, transferring (walking) and continence.