by Jo Barnes –
Low on gas. The occasional pothole. And to top it all off … those nasty inflation speed bumps.
Navigating the road of retirement is like handling the hazards and unforeseen events along the highway, but with the assistance of reliable expertise and good planning, you can enjoy the journey.
“You have to plan for the worst and hope for the best,” says Darren Proulx, CPA.
While planning for retirement seems overwhelming, knowing some key things will kick-start the process. Take a good look at how you’ll be spending your time. Will you still be working part time, full time or not at all? Will you be travelling or developing new hobbies? Will you be selling your home and relocating? Taking inventory of your assets and reviewing spending habits and overall lifestyle is fundamental to planning.
Perhaps you don’t have a financial advisor or someone who can guide you with all of this. So, where do you start?
“You will need a team/combination of legal, financial and accounting/taxation assistance to assist with a retirement plan,” says Darren.
“Seek the assistance of a qualified financial professional (preferably with the Certified Financial Planning designation). Not only will a professional help you to get organized, but they will also help to make the process much easier,” says David Mason, Director, Financial Planning, Donnelly Advisors Group.
Viola Van de Ruyt, Investment Advisor, National Bank Financial adds: “Be cautious of well-meaning advice from friends and family. Get professional advice.”
It’s essential to take time to find the right advisor. Shop around and research the designations, certifications, years of experience, and education of each professional. Beyond the credentials, what else should you keep in mind?
David suggests: “Three words: trust, competence and integrity. Interview a few to find someone who you trust and relate to and who understands your values.”
“You want a professional that will listen, work with your ‘team’ and help explain the situation in plain language along the way and you want to be comfortable with them,” says Darren.
You might be anxious about retirement planning. For example, you might be facing retirement without your spouse who has recently passed away.
“Get professional advice. Don’t be afraid to ask questions; there are no dumb questions,” shares Viola. “Realize that on your own, your expenses won’t be half of what they were with spouse. Many costs may even increase such as home repairs that your spouse used to do.”
Working with expert guidance, prepare an inventory of assets and expenses, set goals and build an overall retirement plan. Keep in mind individuals are living longer, which means savings are being applied for an extended duration.
“Unlike previous generations, most baby boomers retiring today will need their savings to last 30 years or more. Inflation will wreak havoc on your purchasing power overtime. Therefore, it’s important to plan for the effects of inflation and to understand how to position your retirement savings to help you maintain your standard of living,” shares David.
To set up your goals, you’ll need to get an accurate pulse on your spending.
“Determine what your current expenses are – what expenses are essential, what expenses are lifestyle. And then you can look at what will decrease and what may increase,” says Viola.
Planning for the future, of course, means taking into account the unexpected. You need to consider long-term health, emergency situations, and beneficiaries. Surprises in life can happen, but if you’re armed with a retirement plan, it can really help.
Shares David: “Home repairs, market corrections and unexpected health care expenses are some of the unexpected life events that we incorporate into our retirement projections to help stress-test someone’s plan.”
“Make sure you have an updated will and other legal and medical documents in case of an emergency,” says Darren, adding, “And always keep your beneficiaries aware of your plans or requests.”
Insurance is an important piece of retirement planning. It can provide protection against the financial impact from outstanding debts, unexpected illness or death for family dependants.
Notes David: “Insurance is an incredibly important consideration since we will all eventually get sick or die at precisely the wrong time. Insurance can help us cover healthcare expenses or provide our family with the funds to pay debts, funeral expenses or taxes that are due.”
Retirement planning is different for each person. You might be dealing with a physical condition which is becoming more serious. You might have turned a hobby into a business and are facing additional expenses. You might need to step in financially and assist a son or daughter. Whatever your situation, proactive planning is critical.
Who knows what detours lie ahead on life’s retirement highway? But with professional guidance and a retirement plan, you’ll be able to navigate the journey more easily.