Retirement, an eagerly anticipated phase in our lives, that is either on the distant horizon or just around the corner. Regardless of how far away it is, effective planning is the key to ensuring you have the retirement you want. In this blog, we talk about retirement readiness and help you see how prepared you are (or aren't).
We all dream of the day we’ll retire. Being able to say goodbye to early alarms, enjoy impromptu naps, and doing the activities we want, on our own terms. However, turning these aspirations into reality demands careful forethought. While early planning is recommended, it's never too late to start. Here are some things to consider as you venture into your retirement planning.
How much money will I need?
The amount of money you’ll need to retire will depend on what you plan on doing and the expenses you’ll incur. A few questions to ask yourself:
What age do I want to retire?
What types of expenses will I have when I retire such as housing, bills, etc.?
What type of health insurance will I need? Will I need extra coverage as I get older?
What types of activities/hobbies do I plan on doing such as traveling, etc.?
Will I move into a senior’s complex and what expenses will I have?
Do I want to leave an inheritance for my family?
While it's essential to estimate expenses, flexibility is key. Life can bring us unexpected changes, so having contingency plans in place is wise. It's also important to consult with a financial advisor as they can provide you with personalized insights based on your unique circumstances and ensure you're well prepared for the years ahead.
Can a retirement calculator help me?
The short answer - yes! A retirement calculator can become a trusted ally once you've set clear retirement goals. Whether you're starting early or playing a bit of catch up, this tool is indispensable.
A retirement calculator, such as Conexus' Retirement Calculator takes into account critical factors like your current savings, potential contributions from sources like government or employer, and your anticipated rate of returns. It evaluates if you're on the right path and can help show you if adjustments may be needed.
The calculator also helps you to understand what yearly contributions you need to make to reach your retirement goals. To fit it into your monthly budget, simply divide the yearly amount by 12. Does this amount fit into your money budget? If not, you may have to revisit your retirement goal or choose to put away smaller amounts that align with your current budget. As time passes, you can reassess and potentially increase your contributions.
As life changes, so will your circumstances and adjustments may be needed along the way. This is why it's important to speak to a financial advisor as they can help you choose products and create a plan that best serves your goals.
Where should I invest my money?
Everyone’s situation and goals are unique as are the products to best meet your goals and needs. There are many different ways you can save and invest money for retirement such as RRSPs, TFSAs, and more. When you talk with your financial advisor, ask them which accounts and products align best to your goals.
Ensuring a comfortable retirement requires thoughtful planning, considering various factors such as whether you'll have enough money. Now is the best time to start the process. Begin by envisioning your ideal retirement and factor in all related expenses. Speak with a financial advisor to help you figure out where you stand now and how you can bridge any gaps in your retirement plan.
Remember, every contribution counts - even if small, consistent investments such as $20 every two weeks can make a significant difference in the long run. Don't wait - take action to day!
