Canadians are living longer than ever before. And while people once anticipated enjoying travel and leisure activities in their retirement years, things have changed. Not only are retirees now able to stay active well into their 80s, but many want to do more with their time – to stay involved and make a difference. That’s why it’s important, even more so now, to plan for your retirement and protect yourself from outliving your savings.
It can be hard to predict how much you’ll need to live in retirement, especially considering you may need an income for 20 years or more. Remember that inflation, even with annual increases of two to three per cent, can whittle away your savings’ purchasing power. Also, the costs of goods and services that affect retirees the most – prescriptions, health care, etc. – often rise more dramatically than conventional “family” living costs. There’s a lot to consider and getting the right financial and investment advice early on can make a difference.
In general, it’s a smart idea to shelter as much of your savings from tax as possible, using government programs such as a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA). You’ll want to make your annual RRSP contribution for as long as you can to save tax and, of course, grow your retirement savings.
When the time comes, you’ll need someone knowledgeable to help convert your RRSP and other retirement savings to provide you with regular income. There are many options and we will help you understand them all, advising on the best choice for your situation.
Many of the financial decisions you make as you plan to retire will have far-reaching implications that may be felt, quite literally, for the rest of your life. We can provide the advice you need to make the right choices and live the retirement you want.
Life expectancy in Canada nears 81, online: CBC www.cbc.ca, 2010.
PMG Intelligence, Canadian Boomers and the New Retirement: 2009 statistics.
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