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Your retirement readiness check-up

You’ve thought about it for years: the day you move into retirement. But now that ‘the day’ is just around the corner, you may be having other thoughts.

Have you done everything you can to prepare for that day?

Are there important things left undone?

Let’s relieve the stress right now with a review of retirement basics.

Your retirement income will derive from public sources like the Canada/Québec Pension Plan (CPP/QPP) or Old Age Security (OAS), from company pension plans and from your personal registered and non-retirement savings. You will need to apply for CPP/QPP and OAS.

A retiring allowance from your employer compensates for loss of employment, recognizes long service, or pays out accumulated sick leave benefits. It is fully taxable but you may be able to transfer portions of it to your RRSP and claim a deduction for the amount you contribute.

Your employer-sponsored pension plan may allow you to transfer your accumulated benefits into a locked-in, personally directed plan. You then assume the investment risk, but you also reduce the risk of forfeiting some of your pension assets in the event that you and your spouse die prematurely.

Your group health coverage will likely end at retirement. Critical illness, long-term care and other supplemental health and dental insurance coverage may be needed to fill the gap.

Your RRSP income can kick in when you retire or, if you don’t need the income, you can contribute until the end of your 71st year when you have the choice of cashing in your plan, converting it to a Registered Retirement Income Fund (RRIF) or buying an annuity.

Plan for a fulfilling retirement lifestyle. Here are six keys to success¹:

  • Have a clear vision of your future  and all the facets of your retirement life
  • Practice a healthy lifestyle
  • Decide whether your retirement will be freedom from work or freedom to work at something you truly enjoy
  • Be adventurous, and find a happy leisure-life balance
  • Enjoy your personal relationships
  • Feel financially comfortable – and take steps to ensure that inflation and costs for prescriptions and medical care don’t whittle away your purchasing power and savings.

The Investors Group Retirement Readiness™ quiz at www.investorsgroup.com will help you assess your financial, emotional, social and physical readiness for retirement, compare you to other Canadians and provide advice on the steps you can take to prepare for retirement. Take the quiz, and then talk to your professional advisor about how to get the most out of your retirement years.

Date reviewed: February 11, 2015

1Source: The Retirement Lifestyle Centre

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