Retirement Planning Guide to Success

July 8th, 2018

retirement-planning-guideDid you know that 1 in every 4 Canadians have no plan for retirement? Don’t become a statistic—start planning now to retire in Ottawa successfully. Planning is one way to beat anxiety about your future, and if you do it correctly, you will be comfortable for the remainder of your years. Presented below is a 5 tip retirement planning guide to success. Consider this your foundation to a successful retirement.

1. Envision Retirement

We cannot preface this enough: the best way to retire is with a plan. In order to do that, you need to know what you want to do with your retirement years. Ideally, you should be living comfortably and able to do what you have dreamed of doing, whether that’s traveling, relocating, or other meaningful activities. You also have to take into consideration living expenses, debts, and the possibility of less fortunate events, like divorce, death in the family, and financial hardships. Foresight will go far when it comes to retirement planning, so always start here first.

2. Calculate Retirement Income

There’s two parts to calculating your hypothetical retirement needs: knowing your necessary expenditures and selective expenditures. After envisioning retirement, you should be able to say what the day-to-day, month-to-month, and year-to-year spending habits will look like. Once you’ve figured out how much of your current annual paycheque is going to be funneled into funds to retire and other investments, you can estimate what you will have saved 30 or 40 years from now as well as how much you’ll be able to draw yearly to live a happy life.

3. Get Answers

You’re inevitably going to have questions about sensible investments, withdrawal rates, how to minimize taxes, and so on. Consider hiring a fee-only financial advisor in Ottawa who will consult with you rather than trying to sell you investments. Be sure to look for those with Certified Financial Planner (CFP) or other financial planner credentials to help you.

4. CPP & OAS

Always factor your Canada Pension Plan (CPP) and Old Age Security (OAS) into the picture when planning. Depending on your retirement goals and level of financial independence in the future, you might be able to start drawing on your CPP later, helping you stretch your retirement income farther.

5. RRSPs & Other Investment Options

If you want to prepare for retired early, having an RRSP is essential. You might not be able to save a lot during your 20’s and early 30’s, but as you progress through the years and get a decent paying job, the amount you can contribute annually will grow. Attempt to sock away 10-18% of your annual income yearly. Also, look into Term Deposits/GICs/GIAs, annuities, and other ways to generate dividend income so you have a constant stream of money throughout your lifetime.

Hopefully, this guide will help you move forward with whatever stage of retirement planning you are in. This tips are just the tip of the iceberg when it comes to creating a financially independent future, but they will give you firm foundation to build up from. Should you need help with your goals or figuring out what investments to contribute to, consider partnering up with an experienced retirement financial advisor.

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