How to start your retirement plan

The idea behind a retirement plan sounds simple: You put aside money during your working years so that once you stop working, you’ll have income to live off.

‍

But once you sit down to start planning, you may not know where to begin.

• Maybe you’re anxious that you aren’t saving enough.
• You might be confused about how much you need to save or what age you can retire.
• Or, you’re overwhelmed at the idea of starting your retirement plan and all that goes into it.

‍

Fear not! When you meet with a Cambrian Advisor, we take the complexity out of a complex process.

‍

There’s no better time to get started than today. Let’s look at how retirement planning can be a simple, stress-free process:

‍

‍

Why is retirement planning so important?

‍

By understanding, planning, and making the right decisions for retirement, you’ll have a better chance at a successful and enjoyable retirement.

‍

A retirement plan allows you to:

• Determine how much you need to save to achieve your desired lifestyle in retirement.
• Find out what age you can feasibly retire and how to get there.
• Make investment decisions based on your retirement goals.

‍

‍

What do you need to start planning your retirement?

‍

Essentially, your advisor will create a snapshot of your full financial picture. The more information you can provide us with, the better!

‍

It allows them to see whether you can or cannot achieve your retirement savings goal – and if not, how you can adjust your budget to get there.

‍

This includes your:

• Age
• Education
• Occupation
• Assets & net worth
• Life insurance
• Understanding of taxes, finances, and investments
• Insurance
• Investment statements
• Any pensions or group investment plans
• Loans, credit, and debit information (and the interest rates you're paying)

‍

‍

The stages of the retirement planning process

‍

When you meet with an advisor, what will the planning process look like? Here are some of the different stages you’ll talk through during your meeting:

• Earning income to build towards a lifestyle and retirement. During your accumulation years, you work to gradually build up savings in your retirement accounts.
• Investing for retirement with a strategy to follow. This is when you take the money you’ve saved and invest it to stretch your dollar even further.
• Tax efficiency to invest and grow your assets. Learn strategies to help plan your retirement contributions and minimize tax implications.
• Income payable at retirement. Based on your income and other eligibility criteria, you can estimate how much you’ll receive from government benefits and pension plans once you retire.
• Depletion of assets to supplement retirement income needs. Plan how you’ll use your retirement savings and investments over the years.

‍

‍

How much do I need to retire?

‍

While it’s impossible to know exactly how much to save for retirement, you can make estimates based on discussions with your advisor.

‍

Depending on your occupation, your retirement age may be earlier or later. For example, a carpenter may seek to retire earlier than an accountant due to the physical nature of their job.

‍

Using NEI’s retirement planning calculator, you can see whether you’re on track to save enough to meet your goals in retirement.

‍

So, how much money do you need to retire? There’s no magic number; it all depends on:

• Your lifestyle. Do you like to travel or stay at home? What kinds of hobbies will you have—and how expensive are they?
• Your age. What age will you start saving for retirement? The more time you have, the more you can take advantage of compound interest to increase any investment returns.
• Your savings. How much do you currently have saved in TFSAs, RRSPs, or company pension plans? This will determine how much you have left to save before meeting your goal.
• Your eligibility for government benefits. Factor in income you’ll receive from government benefits, including Canada Pension Plan (CPP), Old Age Security (OAS), and Guaranteed Income Security (GIS).

‍

‍

Reviewing your plan

‍

A portfolio review gives your advisor the opportunity to review not just your investment performance, but your overall financial journey, too.

‍

By meeting annually, you can:

• Review your short-term and long-term financial goals.
• Assess your risk tolerance.
• Explore strategies to minimize paying taxes.
• Discuss your life changes.

Life happens fast—and when things change, it may affect your retirement plan, too. You can book a meeting to discuss any life events or changes in your financial priorities.

‍

‍

How a Cambrian Advisor simplifies your retirement plan

‍

We help you simplify your retirement plan, save money, and solve financial problems.

‍

Your future is in your control—and we’re here to help you figure it out. Contact us today!

‍

‍

Disclaimer

Mutual funds are offered through Credential Asset Management Inc.