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Stages of life and retirement planning
Whether your retirement is 20 years away or tomorrow, we want to help you make it great. One way we can help is to answer questions you may have. Below are people at different stages of their financial journey. Explore their questions and find the answers you’re looking for.
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Plan
Your plan matters
With children in school and a mortgage, we still have a fair amount of debt. We’re focused on our children and work. As a result, we may not be spending enough time planning for the future.
I’m not sure what my retirement will look like. What do I do?
When you meet with your advisor, discuss the emotional side of saving, investing and retirement.
It’s here you’ll uncover your true goals and learn how your financial situation impacts your outlook on life.
How to save for your future self: Engage your emotional brain
How to save for your future self: Interact with the future you
How to save for your future self: Confront the demons under the bed
How much income will I need in retirement and how much should I be saving to meet our needs?
The amount of money you’ll need depends on your living expenses and your ability to generate the cash required to pay for them.
How can I save for the future?
One of the best and most straightforward approaches to achieving your meaningful financial goals is to “pay yourself first”. You can do this by setting up an automated transfer between your bank and your investment accounts.
It’s an effective, hassle-free way to save.
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Prepare
Where emotions and money meet
We like to keep a close eye on our investments. While we know a fair amount about the stock market and the fundamentals of saving and investing, we want to improve our financial situation by examining our retirement readiness.
How can I prepare for a seamless transition into retirement?
The key is creating a comprehensive plan that accounts for all your goals across the important areas of your life, with clear steps to accomplish each goal.
Going through the discovery process with your advisor may help you understand and confirm your goals, as well as put your plan into action.
Am I emotionally ready to retire?
Being financially prepared for retirement is only part of the equation. Paying attention to your emotions and maintaining an open line of communication with the people you trust most — your family, close friends and professional advisors — is the other part.
What will you do to stay happy and engaged in retirement? It’s a crucial question to consider and your answer may have an impact on your finances as well.
What are my potential sources of income?
The Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) are pension payments available to all working Canadians, funded by mandatory contributions from employers, employees, and self-employed Canadians.
Old Age Security (OAS) is generally based on Canadian citizenship or legal residence, as well as the period of Canadian residence. If you have an income over $75,910, your benefit will be “clawed back” (reduced).
You may have other sources of income such as RRSPs, TFSAs, non-registered investments, and more. Your advisor can help to identify the sources and develop a strategy that fits your retirement lifestyle.
Pension or lump sum: How to choose when faced with this decision
Slash credit-card debt before you retire
The great divide: Income-splitting strategies may lower your family’s taxes (PDF, 85 KB)
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Retire
Planning continues into your retirement
Our children are in university. After years of financial diligence, we’re comfortably retired. Still, we monitor our spending and want to minimize tax wherever possible.
How do I financially support my grown children?
Few parents imagined their children would be turning 30 while still living at home. But, it happens.
With rising rents, growing student loans and broadening job insecurity, spending a few years at home to gain control over debt may be a good financial move for children.
- 66% of parents are supporting their grown children1
- 42% of young adults (aged 20 to 29) live at home2
1 CIBC August 2015 survey
2 Canada Census 2011Are you caught between your children's and your parents' financial needs?
How can we arrange our investments to help minimize taxable income and address short-term market risk?
There are ways that may generate tax-efficient income, like investing in securities that provide capital gains or Canadian dividends.
Investing in lower volatility mutual funds and having a broad diversification strategy for your portfolio may be good ways to reduce short-term market risks, but it’s always a good idea to keep the long-term in mind — even though you’re nearing retirement.
Your advisor will help you decide the best approach to managing these key concerns.
Diversify your portfolio to protect against market volatility
How do I convert my RRSP into a RRIF?
For most investors, it is simply a matter of converting to a RRIF by the end of the calendar year that you turn 71, and then taking your minimum withdrawal amount the following year.
If you require more income than you had planned for, you can increase the amount you withdraw from your RRIF.
How do I draw down on my investments once I’m retired?
If you’re able to withdraw money from your RRIF, TFSA or other potential sources of income (such as a holding company), you can remain nimble. This is highly important when you’re on a fixed income.
Things to consider:
- Your anticipated tax rate in the current year and in future years
- The type of income you’ll receive
- How using these sources of income will impact your overall financial situation
How do I plan to pass my estate to my family?
Thinking about your estate can be challenging because estate issues often bring up many difficult emotions.
Your advisor can help you create a robust estate plan that includes gifting to relatives and charities, and asking if your Will and Powers of Attorney are up to date.
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