Retirement Planning: The Future is Now
Article revised on 28 February 2020
What are your dreams for retirement? Sailing? Flying off to sunny destinations surrounded by white sand and palm trees? Spending as much time as you want at the golf club? You’re smiling just thinking about it, aren’t you? A word to the wise: If you want to get there, you’ll need a road map.
Prepare for the future!
We have to live in the present – of course, we do – but it’s also important to look toward the future. An increasingly growing segment of the population will spend almost as long in retirement as they did as active members of the work force.
Those who delay preparing for retirement may be in for an unpleasant surprise. So, what’s the best thing to do? Start saving as soon as you enter the work force.
Ask the right question
In Aesop’s fable of The Ants and the Grasshopper, the grasshopper spent an entire summer making music and had no food stored away for the winter. When you retire, will you be unprepared, like the grasshopper? As you move closer to retirement, rather than wondering if you will have sufficient funds, ask yourself if you will have enough money to maintain your current lifestyle.
Everyone wants to enjoy the good life in retirement, but the little extras (meals in restaurants, social activities, books, trips) all come at a cost. You may not be incurring the same expenses, but your income-to-expense ratio is more or less the same.
Commonly used sources of income include your employer-sponsored pension plan, the Quebec Pension Plan, the Canada Pension Plan, RRSPs and investments. Will they give you the financial flexibility you’ll need for a comfortable retirement?
A new trend: supporting adult children
Lots of people these days find themselves having to help their kids out financially. In fact, a growing number of retirees still have young children or young adults living with them.
A recent poll found that 66% of parents who provide financial assistance to their adult children (non-students, 18 years and older) are finding it hard to make ends meet. About 23% of them spend more than $500 a month.
It’s something to consider when the family income decreases. If you want to be able to help your kids, you need to have the means to do so.
What do you do?
Whatever the situation, it’s important to plan your financial security. To do this, why not enlist the services of a financial security advisor? He or she can analyze your financial situation and come up with a strategy that will enable you to set aside the funds you will need in retirement.
Tell your financial security advisor if you are nearing retirement and have young or adult children at home or kids in college or university. He or she can give you some ideas on how to have the funds necessary to help your offspring without jeopardizing your well-deserved retirement.
Need more information?
Contact one of our financial security advisor!