Retirement Planning Services
Most people do plan to retire at some point, regardless of what they do for a living. Presumably you are one of those people, otherwise you wouldn’t be reading this webpage.
What exactly is “Retirement Planning” and how will it help me?
Retirement Planning is a sub-category of “Financial Planning”, which is typically done by someone who is trained and licensed to do this sort of work. These individuals are often referred to as “Financial Planners” or “Financial Advisors”. For now, these terms are used interchangeably, but federal and provincial regulators are making changes to ensure that only individuals who are formally trained, are duly licensed, and maintain annual educational requirements may refer to themselves as a “Financial Planner”.
There are four distinct stages of retirement:
1) Recognizing the need for some sort of planning
2) Actively saving towards a retirement goal
3) Transitioning from working to retired
4) Planning for what you may leave behind
Most of us understand the benefits of sensible retirement planning, but when it comes to actually creating your personal retirement strategy and putting it into effect, it doesn’t feel quite as straightforward. The reality is that many of us are unsure how to plan for retirement because there are many, many variables to consider.
Comprehensive retirement planning really shouldn’t be a DIY project. An experienced Financial Planner can help you by creating an effective plan for retirement, and studies have shown that households using a Financial Planner have up to 273% of the assets at retirement that an otherwise identical household would have.
Let’s consider the merits of a retirement plan. A basic retirement plan will aid you in the setting of clear goals for your retirement such as the age that you want to finish work and what you want your retirement to look like in terms of lifestyle. It will help you establish how much you need to save now to have a retirement that meets your objectives. This plan will allow you to choose your investment options wisely.
Determining how much you need to save is a common concern. This depends on a number of factors that are different for everyone:
- Your age. Naturally, starting to save for retirement when you’re younger means that you need to save less money than if you start later in life.
- Pensions and personal retirement savings plans.
- Benefits available to you. There are a range of federal governmental benefits that you may be eligible for, such as the Canada Pension Plan or Old Age Security.
- Your lifestyle and spending habits. Your personal plans for your retirement will inevitably affect how much you need to save to fund it.
If you haven’t started saving for your retirement yet, or have less in your retirement savings plan than you would like, take a look at my top tips to accelerate your savings:
- Make the most of RRSPs and TFSAs to reduce your tax and make your money grow faster.
- Take advantage of any pensions or savings plans that your workplace offers as the contributions that your employer makes can add extra value to your fund.
- Think about putting spare money into your retirement fund.
- Look at your spending habits to identify opportunities to cut back and save more.
Taking steps to create an effective retirement plan is a decision that will pay off as you approach later life, giving you the opportunity to have the savings for the retirement that you deserve.
If you think it’s time for you to start planning for your retirement, start here.
Setting aside some money every month to put toward your retirement is a relatively easy concept. But how much do you really need to save, and how do you make this money grow as efficiently and effectively as possible?
I can help you. From running projections on future value of your pension, group retirement plan, or personal retirement savings, to guiding you on investment options that will help you reach your desired income level in retirement, to positioning your assets for maximum tax efficiency.
If you have started some retirement savings and feel that it’s time to take your retirement plan to the next level, start here.
This is where things get truly complicated, and in my opinion, the most interesting.
Accumulating your retirement savings is one thing, but determining the most efficient way to access your savings over the course of your retirement can be the most important part of a retirement plan. It’s also the least recognized (or even understood) aspect of financial planning in this industry.
Most individuals working in the financial services industry have no interest in helping you spend your money as efficiently as possible. I am not most individuals. I believe that this is the most important aspect of retirement planning, especially given the state of our long-term care options and what they are likely to look like when we need them. Every penny that we keep in your pocket may well be needed further down the road. Let’s not pay any more taxes than is actually necessary.
What is a Retirement Tax Optimization plan?
Saving and preparing for retirement is only half the job. Deciding how, when, in what order, and at what rate to draw from the various potential income sources available to you is a far more complicated process. This is where a Retirement Tax Optimization plan (RTO plan) comes into play.
The most common strategy for accessing RRSPs, RRIFs, or LIFs is to “defer” until you can defer no longer. The year that you turn 71 you will be required to draw a minimum annual amount from all of your registered retirement savings — but is the government-mandated withdrawal strategy the most tax-efficient method? For most people, the answer is “absolutely not” — unless, however, your goal is to pay as much income tax as possible.
There are 120 different potential “start dates” for CPP, each one providing a different income level to you. There are also 60 potential “start dates” for OAS. In conjunction with a pension (with or without a bridge), your personal retirement savings, and any other assets you plan to use in retirement, which “start date” is the most tax efficient for you? Would it make sense to start drawing CPP or OAS while you’re still working?
A customized and effective RTO plan can answer these questions and potentially find tens of thousands of dollars (or even hundreds of thousands) that you would otherwise be paying to the government. These unnecessary payments are often in the form of income tax, reduced benefits, or clawbacks. An RTO plan will integrate all of your retirement income sources and determine which to draw from, when, at what rate, and where to shelter it for later access. You remain in full control of all your assets — you just simply give less of it to the government.
I use a proprietary system to run scenarios for all possible strategies and generate a report showing which strategy is the most efficient for your specific situation. This is a very sophisticated process, but the results can be potentially life altering for you and your family.
If you have retired, or are within 5 years of retirement, and would like to see how much an RTO plan can improve your retirement, start here.
If you feel that there will be some assets left over when you ultimately pass away, how much of it would you like to leave to the government? Without careful pre-planning, more than half of the value of an estate can end up going to various levels of government.
Your lifetime of work, and the savings that you have accumulated, should be used the way that you want. If you leave something behind, you should have control about where it goes after your death.
If you would like the government to be your largest beneficiary when you pass away, do nothing. If you would prefer to see the proceeds of your estate go to your family, your friends, a charity, or anyone else of your choice, then you need an Estate Plan.
The ultimate goal of a well-designed Estate Plan is to keep more money in your pocket — now and throughout your retirement. In general terms, your assets are going to go to one of three locations:
1) You will spend it
2) You will leave it to someone or something that you care about
3) You will give it to the government.
My goal is to minimize the government’s share of your assets at all times, leaving more for you while you’re alive and allowing you to decide where the balance goes when you pass away. A fortunate side-effect of a good Estate Plan is that your executor will have a much easier process to complete. It can be the difference between weeks of work, and months — or even years — of work to settle an estate, and all the stress associated with the lengthy and complicated process.
If you would like to see how much I can save your estate in taxes, both now and later, start here.
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If you’re ready to start your retirement planning, or would like to take your retirement planning to the next level, contact me for a no-cost preliminary consultation. Together we can determine whether or not I am the right Financial Planner for you. I specialize in Estate Planning and Retirement Planning and offer financial planning services across Ontario. My office is in Kingston, Ontario, and I am happy to speak with anyone on the phone, host a video chat, or meet in person with anyone in the surrounding area. I would be happy to help you find the solution that fits your unique situation.