Who Do I Talk To About Retirement Planning?

Retirement planning, all you need to know.
Who do I talk to about retirement planning
Article Overview

Welcome to our article, where we will give you the most helpful insight on who you can talk to about your retirement planning. You might be wondering if you have enough for retirement and whether you are ready for retirement. This article serves as a great guide!

To help you succeed in your retirement goals, we have created these other articles that can help you.

Who Do I Talk To About Retirement Planning?

Retirement planning is an important aspect of financial planning that is easily ignored. This is mainly because people view retirement as something that takes decades to arrive at that point. I have many years ahead of me, I don’t have to worry about it for now. That is exactly what some people say. This has made some slack on retirement planning, leaving them to regret it when it is too late. There is no specific age for starting a retirement plan, so you should start today.  

Once you decide to start, it is always advisable to engage the services of a professional retirement advisor. The reason is to be able to deal with the different elements involved in retirement planning. Things like inflation, budget and investment decisions are what make up a retirement plan. Unless you have a good understanding of the financial world, a professional retirement advisor is your best bet. Even if you have your plan, an advisor can help you improve on it and suggest better ways to manage your budget, savings, investment and tax benefits in your retirement plan. Of course, their services are not free. Some charge direct fees for the services, commission on the financial products they recommend and some do both. Find out the one that suits you and offers the best services and engage them today.

Before Meeting Your Financial Investor: 6 Must Do's

Before meeting with a professional retirement advisor, you should put your house in order because he can only work based on the information you have. Here are somethings you have to do before meeting with your advisor:

1. Find your ID

Your ID will be needed for any form of registration. It is usually a government issued IDs like Passport or a Driver’s License. This is needed to confirm your identity and address.

2. Gather Financial Documents

Your financial documents are what tell your financial story. It says what you own, owe, and how much you are worth or will be worth. This information is needed to build a good retirement plan. This is what will most likely inform how much you need to save towards retirement and what kind of portfolios you should invest in. some of the documents you will be needing include:

  • Bank account statements including savings and chequing accounts.
  • Tax-Free Savings Account (TFSA)statements, if any.
  • Pension plan paperwork, if any.
  • Registered Retirement Savings Plan (RRSP) statements if any.
  • Tax returns issued by Canada Revenue Agency for the last three years or for however long you have been working if less than three years.
  • Other investment statements such as bonds, stocks, and mutual funds.

3. Create a list of current expenses

This is an important assignment that has to be done before meeting your advisor. This helps give you clarity on where your money is going. This way, you can plug leakages in terms of some avoidable expenses you make to divert the money into your retirement savings account. This will also give you an idea of how much you may spend when you retire. Your current lifestyle will give you a hint of what your retirement lifestyle will be. To create this list, you can assess your credit card and bank statements in the last three months to see where your income is going. A three months bank statement will show what are the recurring expenditures which can be assumed to be your basic living expenses. Some of the expenses you are likely to come across include:

  • Rent.
  • Property tax.
  • Clothes.
  • Home supplies (toilet paper, paper towel, cleaning supplies, light bulbs, etc.)
  • Transportation (public transit, car, rideshare.)
  • Utility bills (hydroelectricity, water, gas, sewage and waste collection.)
  • Food (groceries, eating out at restaurants, Starbucks, Tim Hortons.)
  • Other bills (phone, cable, internet, Netflix, Spotify, insurance.)
  • Entertainment (movie tickets, concert tickets, going out with friends, books etc.)
  • Alcohol, if this applies(store-bought, going to bars, clubs and breweries.)
  • Pet supplies, if this applies(food, treats, toys, medical expenses.)
  • Vacations.

4. Create a list of debts and loans

Debts and loans are some of the drag-backs of having sufficient retirement savings. You do not want a situation whereby you are using your retirement income to service debts. You may not get to live the retirement lifestyle you dreamed of. That is why advisors encourage people to ensure all debts are paid before retirement. That way, you will not place a burden on your retirement funds. To achieve this, you will need to create a list of your debts and loans to have a clear picture of your financial obligations. Questions like, What type of loan is it? How much do you currently owe? What payment plan do you currently use? will help you know where you stand in terms of figures.  

After creating the list, the information gathered will be used to assess what you can pay off by the time you retire and what you may need to plan for when you retire. Examples of loans and debts you may owe include:

  • Mortgage on a primary residence.
  • Mortgage on other property(summer home, cottage, property overseas, rental property.)
  • Car payments.
  • Credit line (secured or unsecured.)
  • Student/education loans.
  • Loans from family/friends.
  • Credit card debt.

5. Find out how much you want to retire with

This is more of a personal goal that is guided by your retirement goals and the kind of lifestyle you want when you retire. It is commonly referred to as the magic number. You can use the Government of Canada’s retirement income calculator to determine much you may need in retirement. This will give you clarity on how you can save towards that number. Some of the information about expenses and debts you have gathered will be used to calculate

6. Checkout what you might get from the government & your employer

This is also important because it also goes into your retirement savings. Any additional money is welcome. In Canada, the government makes provisions to provide some income during retirement. A good example is the Canada Pension Plan and the Old Age Security program. These funds are not designed to fully support you when you retire but rather be supplemented by your workplace retirement savings plan, pension plan and/or personal savings. A very vital tipis that the difference between these supports and what you will need to spend each year in retirement is what you have to save.

How Do I Begin To Plan For My Retirement?

The very first step is acknowledging that you need to start as soon as possible. Then there are certain decisions you need to make to have an effective retirement plan: Some of these decisions include:

1. How much time do you have?

Knowing how much time you have until retirement will help you decide on how aggressive you will have to save and invest to arrive at your dream retirement savings goal. It will also help you plan your budget pre-retirement to ensure you save as you are supposed to.

2. What is your retirement lifestyle goal?

This will help you determine your magic number. You need to set your retirement lifestyle goals even before you start saving. Do you want to own a property, buy a car, or go on vacation? All these things cost money and knowing what you want to do in retirement will go a long way in your retirement plan.

3. Calculate the after-tax rate of the returns on your investments

After choosing the type of investment you want to put your savings into, knowing how much you earn after tax will give you a clear picture of how far you are from your financial goal.

4. Assess your risk and investment goals

Placing your investment goals side by side with the risks will help determine the level of risk you need to take on each investment. Investments have varying risks and you do not want to place your money in a high-risk investment that allows you to overachieve on your investment goals. You may lose it all.

What Are The Four Basic Steps Of Retirement Planning?

1. Start Early

This is a very important step that cannot be overemphasized. Starting your retirement plan early gives you ample time to accrue a lot of savings and returns on your investment that will help you live the retirement lifestyle of your dream.

2. Decide on your retirement age

This will enable you to know how much time you have before retirement and how much you can save and invest to achieve your retirement goal.

3. Have a budget

This cannot be overstated. Having a budget helps you align your income and expenses so that you can have a clear idea of how you spend your money. it will also help you cut down on unnecessary expenses and focus on your retirement savings.

4. Enlist the services of a professional retirement advisor

Bringing in an expert will help you maximize all the resources you have at your disposal that you may not know you have. Things like tax credits, government benefits and lucrative investments are what a professional advisor brings to the table.

When Should You Begin Your Retirement Planning?

The simple answer is NOW. The earlier, the better. Starting early allows you to rack up enough money in your savings plan. It also gives you ample time to settle all debts before retirement.

FAQ

The best person to help with a retirement plan would be a certified financial planner or financial advisor. These people are financial experts who have gone through the necessary steps to help you with your finances. 

The three biggest pitfalls to retirement planning are not having a clearly defined goal, not starting early, and not speaking to a professional. All of these will set your retirement back significantly. 

To do your own retirement planning, you must predict how much income you’ll need in retirement first, and then figure out how much you need to save and what investment returns you need to get there. 

The Canadians Guide to Retirement Planning is a book that offers information about how to plan a retirement. It contains really useful knowledge, but obviously, it won’t be able to make adjustments to your plan on the fly, as it’s a book. We still recommend speaking to a financial expert. 

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Written by:

Jim Pan, CFP, MFA-P

Jim is a dedicated, fee and advice only independent Certified Financial Planner with a focus on supporting healthcare business owners during their crucial growth phase. His expertise lies in offering comprehensive solutions to minimize taxes while embracing a holistic approach. With a career spanning back to 2010, Jim has established a strong presence in the financial industry. He proudly holds a range of designations, including Certified Financial Planner (CFP), and Master Financial Advisor - Philanthropy (MFA-P). He is currently pursuing additional designations and qualifications to better serve his clients and community. Beyond his qualifications, Jim is a member and an esteemed participant in the Million Dollar Round Table (MDRT), an exclusive global association comprising the top 1% of financial advisors. Jim's commitment extends to the community, where he spearheads numerous charitable fundraising events and plays an active role in enhancing the well-being of others. Additionally, he has contributed significantly by serving on the board of the Canadian Mental Health Association in Vancouver. Currently, he volunteers with Junior Achievement of British Columbia (JABC) to present personal finance topics to youths.

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