How to weather the transition from saving to spending in retirement

Create a retirement plan that will adapt as the financial winds change

You’ve worked hard to save for retirement – prioritizing your goals along the way. You’re tiptoeing towards retirement and you’ve earned your “me time” – now, create a plan for how you’ll spend it.

Approaching retirement after years of hard work can be an exciting time, but it can also trigger feelings of uncertainty about how sunny your financial forecast may be. How long you’ll live is an important factor that impacts how long your money needs to last. The fact is, Canadians are living longer than before, which means you’ll likely need more to be able to support your retirement dreams.

Make the most out of your retirement by working with an advisor.

As you begin to shift your mindset from saving to spending, you may be asking yourself, “Am I going to be OK?” You’re not alone. It can be difficult to envision exactly how you would like the next 20, 30 or even 40 years to look – and creating a plan to support your vision can seem daunting. Don’t fret – I can help.

It’s important to have a retirement income strategy that sets the stage for a long and fulfilling retirement. Part of Retirement Incomecreating a plan that works for you involves setting realistic expectations about your saving and spending habits. Working with me will help you stay focused on the things that matter, rather than the checks and balances of financing your retirement.

Remember, tomorrow can be sunny – and it can come sooner than you think

Do you think your spending will decrease in retirement? Canadians need to be wary of that assumption because spending actually stays more or less the same – and may even increase. To help position you for a bright future, you can take the following steps as you move closer to retirement.

Three to five years before retirement

  • Estimate how much guaranteed income you’ll receive from the government and your employers.
  • Estimate your living expenses and lifestyle needs.
  • Review your investment portfolio with me to find out if you are on the right financial track toward your retirement goals.

One year before retirement

  • Verify eligibility and amounts of retirement income from all sources.
  • Review estate planning.
  • Work with me to put the finishing touches on your customized retirement program.

Six months out

  • Update your beneficiary information.
  • Apply for government benefits.
  • Apply for retirement income from your workplace plan.

Stop asking, “Will I be OK?” Make the most out of your retirement by working with an advisor who can help you better understand and manage your potential sources of income. I can help you develop a retirement strategy that can help set you up for fair weather, while also providing you with a financial umbrella – just in case the wind shifts.

Steps to Help Ensure Your Financial Success in Retirement

You’ve got a nice nest egg saved up, but want to make it last (and grow!) so you can bring your retirement dreams to life. As you move closer to your retirement date, take time to evaluate the factors that could impact your retirement income. Use this quick checklist to stay on track.

Summarize all your retirement income sources. These can include personal savings and investments, company retirement plans and government benefits, such as Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) and Old Age Security (OAS). To verify your eligibility for CPP/QPP and OAS, contact Service Canada1 (or contact the Quebec Pension Plan2). For workplace plans, contact your benefits administrator when you’d like to start receiving retirement income.

There are many steps to consider when nearing retirement. Print this checklist to help prepare.

Estimate your living expenses.Track your current spending and use this information to project how much retirement income you’ll need. Factor in any lifestyle changes that may occur upon your retirement – you’ll want to consider wellness, travel, part-time work or downsizing your home.Retirement Ready

Review your investment portfolio.Work with me to revisit your investment strategy and consider shifting to lower-risk options to slowly and safely grow your money.

Update your beneficiary information. Ensure your company benefit/pension plan(s), personal savings plans and insurance have updated beneficiary information.

Ensure your estate plan is up to date. Now is the time for the important task of reviewing your will and powers of attorney.

Timeline to Retirement and Financial Success

Three to five years to go:

Estimate how much guaranteed income you’ll receive from the government and employers

Project your living expenses and lifestyle needs

Review your investment portfolio with me

One year to go:

Lock down eligibility and amount of retirement income from all sources

Review your estate plan

Work with me to put the final touches on your retirement plan

Six months to go:

Update your beneficiary information

Apply for government benefits

Apply for retirement income from your workplace plans

Now switch off your alarm – yes, permanently. Well, except when you have an early tee time.

Top Ten Questions to Consider for Retirement

You’ve saved well, invested wisely and built a sizeable nest egg. Retirement is within your grasp – or so you think. Here are 10 thought-provoking questions to help you determine your readiness to retire (whatever retirement means to you).

1. When do you want to retire? In a year? Six months? At a particular age?

In retirement, you’ll experience a fundamental shift – from saving to spending. The timing of your retirement is crucial to building your retirement nest egg and assessing how long it will need to last.

These 10 questions can be your roadmap to becoming retirement ready.

2. What percentage of your current income do you expect to need in retirement?

The amount of your current income you’ll need in retirement depends on how much you plan to spend in retirement. Plot out your current budget, then create a projected retirement budget and see where the gaps are.Retirement Checklist

3. How do you plan to spend your money in retirement?

Think about your current spending habits. Are you a penny-pincher or a lover of luxury? These habits will be amplified in retirement, so make sure your savings reflect this. Don’t forget to plan for events that may be out of your control.

4. Have you considered your lifestyle needs in retirement?

Travel lovers, take heed. Your lifestyle needs in retirement play a big part in how you save. For example, buying a condominium and being saddled with condo fees may not be the best idea if you plan on travelling extensively.

5. What guaranteed sources of income can you count on in retirement?

Calculate how much guaranteed income you’ll receive during retirement – such as Canada Pension Plan (CPP), Quebec Pension Plan (QPP), and Old Age Security (OAS) payments. Then, determine how much additional income you’ll need and where this will come from. While investment income is a nice bonus, you shouldn’t rely on it to pay for necessities.

6. Do you plan to work part-time or full-time in retirement?

Perhaps you want to continue using your existing work skills or explore new career opportunities. Debt and family matters may also influence your decision.

7. How do health and wellness factor into your retirement plan?

Retirement is the perfect time to focus on your mental and physical fitness. Leave room in your budget for activities that exercise your mind and body – the good news is that many of them are free!

8. Are you ready for the unexpected events in life?

When you consider retirement planning, make sure to account for unpredictable events – both financial and personal. Check if your retirement savings are strong enough to support you through a future economic downturn, a rise in the cost of living and a long life.

9. How will you keep your money working in retirement?

Think about how you’ll keep your money growing. Talk to me about investment solutions for retirees.

10. Do you plan to leave a legacy?

You might want to leave an inheritance to your family or favourite charity. Once again, I can help you put this in place.

The answers to these questions can help form a dependable roadmap for your retirement. While you can’t predict the future, you can plan for it.