Retirement means different things to different people, but one thing is constant. It is a time of change. It marks the beginning of a transition from one phase of our lives to another. It is, without doubt, one of the most critical events in a man’s life. For many, the thought of retirement brings fear and worry. This doesn’t have to be the case. You should think of retirement as the beginning of the next chapter of your life – a chapter that many were not lucky to reach. The key to having a seamless transition to a satisfying and enjoyable retirement is to start planning for it.

As with transitioning to any new phase we get to in life, planning often goes a long way in ensuring a smooth transition from the old to the new. Retirement is no different; all your fears and worries can be laid to rest by taking the initiative now to put the necessary measures in place to facilitate a secure retirement.

What is RRIF?

A Registered Retirement Income Fund (RRIF) is a retirement fund; it is a logical extension of the RRSP. When you turn 71, you have to convert all your RRSP funds into income. There are three ways you can go about this:

  • You can withdraw the entire amount and close the account. If you only have a few thousand dollars in it, this may be the right option. But you also have to keep in mind that you will likely end up paying a large percentage of the amount in taxes.
  • You can use your funds to purchase an annuity. An annuity is an investment product designed to pay a monthly income, usually for the rest of your life

How much do I need to save to retire?

This is an age-old question that everyone asks at some point when planning for retirement. The answer – it depends. There isn’t a single answer that People retiring today face more challenges than earlier generations of retirees. The rising costs of health care and long-term care, increasing debt, stagnating salaries, and fewer pensions are some of the many factors that are making it harder to for many people to prepare for retirement. Understanding the risks that you will likely face when you retire helps prepare you for a retirement with fewer surprises. It puts you in a better position to make informed decisions when you are faced with these challenges.

The risks that retirees face can be grouped into four major categories

  • No matter how much money you are able to save throughout your working career, it doesn’t completely eliminate the possibility of running out of cash. Therefore, make sure you go for a plan that guarantees a regular income throughout the rest of your life.
  • Choose a plan that provides joint coverage and benefits

PRE-RETIREMENT TIPS

  • 1. Only consult experts Don’t follow simplistic
  • 2. Reevaluate your retirement plan periodically Reevaluate your retirement plan every couple of years or when a major event that affects the state of your health.

WORKING WITH A REPUTABLE FINANCIAL PLANNER

We all have three choices when it comes to managing money – you can choose to do nothing, you can choose to do it yourself, or you can choose to have an expert help you.

What a good financial planner can help you with

  • Identify existing problems

Many people have a hard time being objective about our financial situation. A good financial advisor comes with the expertise and objectivity needed to diagnose your financial situation and identify problems.

  • Set financial goals

Having clear-cut realistic goals is vital for sound financial management, but sadly many never take the time to set financial goals, and even those who set goals, set unrealistic goals. A good 44 financial planner can help you set realistic goals that take your current situation into full consideration.

  • Help you reach your financial goals

A good planner can help you identify and develop sound proven strategies that can help you accomplish your financial goals

  • Set your priorities right

Doing the right things at the right time is crucial to accomplishing anything. While you may already be working on several options to help improve your financial situation, a financial planner comes in and helps you prioritize and draw up the best route that fits your overall situation

  • Purchasing financial products

Hiring a planner who charges on an hourly basis can help you save lots of money in the cost of commissions when buying financial products. Making commission-free purchases can be quite valuable when purchasing investments and insurance

  • Reduce your taxes

A good financial planner has a solid understanding of the tax code and can use his/her expertise to help you reduce your tax liability

  • Be more accountable

A financial planner can help you stay on track in accomplishing your financial goals. He can talk you out of making emotional decisions with your money like selling off all your stocks when the market is bearish or jumping on a stock that has been rising.