Advice from an Expert: From Chamber Member Investors Group
Your Retirement Readiness Check-Up
John Wolff
Chamber Member
You’ve thought about it for years – the day you move into retirement. But now that ‘the day’ is just around the corner, you may be having other thoughts. Retirement is no longer as simple as it used to be-in fact for many of us it is not a single major event, but a gradual transition into a second phase of our lives. Knowing all the issues and options can help relieve the stress of the transition.
Your retirement income will derive from public sources like the Canada Pension Plan (CPP) or Old Age Security (OAS), from company pension plans and from your personal registered and non-retirement savings. You will need to apply for CPP and OAS. You can choose to start receiving CPP benefits any time between 60 and 70 but the benefits are reduced if you receive them before 65 and increased if you do so between 65 and 70.
A retiring allowance from your employer compensates for loss of employment, recognizes long service, or pays out accumulated sick leave benefits. It is fully taxable but you may be able to shelter a portion.
Your employer-sponsored pension plan may allow you to transfer your accumulated benefits into a locked-in, personally-directed plan. You then assume the investment risk, but you also reduce the risk of forfeiting some of your pension assets in the event that you and your spouse die prematurely.
Your group health coverage will likely end at retirement. Critical illness, long-term care and other supplemental health and dental insurance coverage may be needed to fill the gap.
Your RRSP income can kick in when you retire or, if you don’t need the income, you can contribute until the end of your 71st year when you have the choice of cashing in your plan, converting it to a Retirement Income Fund (RIF) or buying an annuity.
Plan for a fulfilling retirement lifestyle. Here are six keys to success*:
1. Have a clear vision of your future – all the facets of your retirement life.
2. Practice good health and wellness
3. Decide whether your retirement will be freedom from work or freedom to work at something you truly enjoy.
4. Be adventurous, find a happy leisure ‘life balance’
5. Enjoy your personal relationships
6. Feel financially comfortable – and take steps to ensure that inflation and ‘new’ costs such as medical care don’t whittle away your purchasing power and savings.
*Source: The Retirement Lifestyle Centre
For additional information contact John at Investors Group Financial Services Inc. at 604.941.4697, email john.wolff@investorsgroup.com or visit his website at www.investorsgroup.com/consult/john.wolff.
This column, written and published by Investors Group Financial Services Inc.
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