There are many facets of retirement planning that you should consider, whether you are planning for retirement or already retired. Not all of the following tips may apply to your circumstances, but there may be two or three ideas that you should keep in mind.
1) Never give up. It is never too late to start saving, and, with pay or benefit cuts over the last few years, it may be tempting to stop contributing to TFSAs or RRSPs.
2) Are you planning for a high standard of living in retirement or a high quality of life. Determine what will give you joy and plan for it. You may want to visit the children and grandchildren a few times a year, have a golf membership or buy a new car in a few years. Prices won’t be going down, plan for the things that will make you happy.
3) Don’t use Retirement funds as a savings account. When an unexpected car expense or children’s college costs come up, do not automatically borrow from your retirement savings. You lose out on the length of time that those funds could be working for you, and you may not reach a long term goal you set.
4) Do not underestimate the rising cost of health care. Life expectancies are increasing, but that can also mean the length of time you require care. Understand what benefits your healh care plan provides and if you should consider long term care or critical illness insurance.
5) Do not ignore the effect of inflation on your retirement funds and lifestyle. Inflation eats away at the purchasing power of every dollar you will receive.
6) Do not be too aggressive with your investing style and just as important, do not be too conservative. The market crisis of 2007 and 2008 scared many investors out of stocks or mutual funds, and, unfortunately, funds may still be sitting in cash due to the fear of investing.
7) Do your due diligence. If an investment sounds too good to be true, it probably is. Choose an advisor that can meet your needs, you can ask your friends or co-workers if they know of anyone, you can ask the advisor if you can talk to some of their clients and you can check with regulatory agencies to ensure your advisor is registered and in good standing.
Check websites such as FPSC (Financial Planning Standards Council) that list CFPs (Certified Financial Planners) in your area. Websites such as Accretive Advisor (www.accretiveadvisor.com) are available for investors, where some of the due diligence homework is already done for you.
8) Don’t forget to plan for some fun. You work hard and giving yourself a small reward as you reach a goal helps you to stay on track and stay motivated.
You’ve earned retirement or you are working hard towards retirement; it takes hard work, sacrifice at times and planning to reach that point of financial security and stay there.