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Retirement planning quick start guide

Your retirement will be as unique as you are. Travel, sports, hobbies, family and friends… no one will combine their activities the exact same way. Here are six steps to help you achieve your unique retirement vision:

1. Conduct a retirement/income analysis: Estimate your monthly retirement living expenses like utilities, insurance and mortgage payments. Be sure to consider additional costs such as travel, hobbies, and other forms of entertainment.

2. Investigate government sources of income: Find out how much monthly income you can expect from government sources like the Canadian Pension Plan (CPP) or Québec Pension Plan (QPP) and Old Age Security (OAS). There are various online sources for this information.

3. Investigate your pension from work (if applicable): Determine whether your employer-provided pension plan is a defined benefit plan or defined contribution plan. If it is a defined benefit plan, the Pension Administrator can give you a monthly benefit payout estimate. If it is defined contribution plan, you will have to estimate the monthly pension.

4. Count your savings: Review your Tax-Free Savings Accounts (TFSA) and Registered Retirement Savings Plans (RRSP), along with any other investments you may have. Be sure to understand the rules governing withdrawing income and the related taxes that may be applied.

5. Do the math: Add up your potential monthly income including government pensions, workplace pension(s) and savings and investment withdrawals. Compare this total to your estimate of monthly retirement living expenses. The result should provide an indication of whether you need to re-think your planned retirement lifestyle, become more focused on saving, or both.

6. Seek professional advice: You know your personal retirement goals better than anyone else, but it might take the help of an expert to reach them. A financial advisor can help you to assess your retirement income needs, determine your expected sources of income, and help you develop a plan that ensures you are adequately prepared for the cost of living in retirement.

Date reviewed: February 10, 2015

This column, written and published by Investors Group Financial Services Inc. (in Quebec – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.