inances are the number one concern among retiring Canadians. Fears of not having enough money to live comfortably or not being able to live as comfortably as you are presently haunt the minds of people looking ahead to retirement. However, retired Canadians today are wealthier than retired Canadians have ever been before. All Canadians over the age of 65 can obtain an income provided by the federal Old Age Security pension and Guaranteed Income Supplement. All formerly employed Canadians are also covered by the Canada or Quebec Pension Plan, and about 45% are covered by company pension plans. Thousands of Canadians also have registered retirement savings plans (RRSP's) and other forms of savings and investments.
Five Steps to Financial Planning:
1. Determine your current financial situation
| You should do this to gain a clear picture of your accumulated assets, your current expenses, and your disposable income. Use these as benchmark figures to measure and compare to what your retirement situation will be in the future. |
2. Calculate monthly and annually the total retirement income you expect to receive
| You can check with your local office of Health and Welfare Canada and your employer's human resources department to confirm how much pension income you will receive. Also include any income or dividends you will receive from RRSP's, mutual funds, Canada Savings Bonds, stock market shares, etc. in these calculations. |
3. Estimate your monthly expenses
| Keep in mind that your expenses will change during retirement because your lifestyle and activities will change. Choosing to relocate to a place where the costs of living and housing are much lower can significantly reduce your costs and increase the purchasing power of your retirement dollar. |
4. Determine if your future expenses will be covered by your retirement income
| Even if your income amount exceeds your projected expenses, keep in mind you must consider estate planning and the effects of inflation. You should look for ways to increase your income through investments, part-time employment, etc. |
5. Create A Plan
| You should contact a financial advisor who will review your lifestyle plans and your retirement income needs. They will help choose the retirement package that is right for you. |
|
