Retirement Countdown

Retirement is an important goal in the financial lives of all individuals. Please find below a timeline to help you in setting retirement goals as you draw close to retirement age.

10 Years from Retirement

• Start aggressively saving for retirement while your disposable income is high, and there is still time to let compound returns work for you.
  
  
• Start to consider the lifestyle you would like to enjoy in retirement, and see if it's affordable. To be able to retain your same lifestyle, you will need between 60% and 70% of your pre-retirement income.
  
  
• Research your company pension plan, OAS, and CPP benefits to ascertain how much you will receive in addition to your own savings.
  
  
• Chart your current cash flow, and eliminate unnecessary expenses; make a projected budget for retirement.
  
  
• Project the sources and amounts of retirement income so you can perform any available re-balancing of accounts and assets to equalize incomes between you and your spouse to minimize taxes in retirement.
  
  
• Investigate opportunities to pre-pay future lifetime expenses from working income rather than from investment income (or capital) after retirement - like paid-up life and critical care insurance.
  
  
• Make a plan to pay off loans (in ten years you want to be debt free).
  
  
• Update your will, and powers-of-attorney. With larger estates, tax representative help may be beneficial.

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5 Years from Retirement

• Set the date for your mortgage-burning party.
  
  
• Start thinking about whether you want to move. If you are thinking about another community, town, city, or country, get the feel of the area now by spending vacation time there.
  
  
• If you plan to sell your home to help finance your retirement, start watching for the market to time the sale for maximum potential return.
  
  
• Revisit your retirement budget to make sure it's still on track.
  
  
• Continue to eliminate any remaining debt.
  
  
• Consider shifting investments from aggressive growth to more balanced instruments.
  
  
• Talk with your spouse about how the two of you will spend your time (together and separately) - hobbies, activities, volunteer involvements, part-time jobs, travel.
  
  
• Determine whether or not you will be able to retire at the same time.
  

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1 Year & Counting

• Rewrite your projected budget as precisely as possible.
  
  
• Reconsider asset ownership. For example, do you really need two cars?
  
  
• Establish an emergency fund, or line of credit.
  
  
• Consolidate your RRSP holdings, as you may want all your holdings in one or two places before arranging your RRIF.
  
  
• If you think you haven't saved enough money to retire comfortably, start sorting options for part-time work, renovating part of your home into a rental unit, downsizing your living arrangements, or relocating to a lower-cost locale.
  
  
• If you intend to move, start clearing out that attic and garage now. Sell what you can, find good homes for the rest.
  

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3 Months Away

• While you are still covered by your company benefits plan, get everything checked over and fixed; have your teeth and eyes checked, and get a full medical.
  
  
• Shop around for medical insurance if your pension plan doesn't provide any. Pick up out-of-country travel insurance (annual premium basis is cheapest).
  
  
• Recheck and review your government and corporate pension benefits, investments, and retirement budget. You're almost there! Be sure to check survivor benefit provisions.
  
  
• You don't have to convert your RRSPs until the end of the year you turn 69, so don't start cashing them in unless you need the income - to allow for further growth, and to maximize opportunities for receipt of government benefits.
  
  
• Make sure you and your spouse have a source of qualifying income to be eligible for the $1,000 pension-income tax credit.
  
  
• Update your will and powers-of-attorney. You may want to consider switching to the next generation as the people you will have designated to handle your affairs will be crossing the same thresholds as you.
  
  
• Be prepared for your company to make an offer to you about returning in some part-time, representativey capacity. As the Baby Boomers retire, labour shortages are going to appear that the Baby Bust generation won't be able to fill.

Remember when Retirement Planning-
The Earlier you start, the Better!!