Retirement Planning

It’s can be difficult to see into the future to determine your retirement needs, however, it’s a great exercise to undertake in order to develop a retirement plan and provide some peace of mind. Simply putting money away every month may not be the solution because you need to have some idea of how much income that money will generate in the future and what the other income sources will provide. That’s where a professional can help.

The cost of living in the future could be very different when you retire simply due to inflation. Couple that with your desire to live a certain lifestyle and the needs become more difficult to calculate. On top of those uncertainties, the ever changing Canada Pension and Old Age Security amounts need to be factored in.

The way to build a plan is to work backwards by using the best estimates you have. Plans should be reviewed every few years and adjustments made, but it’s important to get a starting point drawn up. By enlisting the help of a professional, you’re likely to get a more accurate picture of what your future will look like. The best part is that professional services are typically offered at no cost.

Once you’ve determined your required future income needs, you’ll have a clearer picture of how much you’ll need to put away. Most people don’t realize that the amount is a lot more than they think it is. In addition, calculations may need to be run using an iterative method (continuous re-calculation) since future income levels may affect the amount of Old Age Security that you’re entitled to and taxation needs to be factored in.

All these factors will let you know how much to save, how much risk you should take in your investments and when you can realistically expect to retire comfortably. With so much uncertainty in the world, I feel really good about a career in which I help people properly plan for their futures.