Retirement Planning as 1-2-3-4

Good morning Dinks.  One of the major parts of being a financial planner is helping people plan for a financially successful retirement.  It is a common goal that most people have, but it’s true that not a lot of people actively plan for their retirement.  This may be because we have so many other  personal and finance goals that we want to achieve before retirement or it may be because people feel that the government and their employer will take care of providing an income during retirement.

As a person I feel that people should enjoy their money while they are alive, this includes spending within your income capabilities and saving for retirement so that you don’t have to work for the rest of your life.

There is no point in being retired if you are going to stress about money the whole time, this is why it’s important to save for the later years during your working years.  However, I also believe that we also have to enjoy our lives and our money while we can which means that we don’t have to be an avid saver; we just need to set realistic retirement goals.

Plan your retirement with a few easy steps

1. Set a reasonable date.  I would love to retirement tomorrow, but that’s not going to happen. One of the first questions that I get from clients when we start to plan for their retirement is “When should I retire?” This depends on a variety of factors such as your savings including your sources of revenue at retirement such as pension income and old age security benefits.  It also depends on what you want to do during retirement, the lifestyle that you want to have and if you are ready to leave your friends in the workforce.

2. Determine your income.  Many financial planners feel that 60% to 70% of your pre retirement income will be more than enough for you to live financially happy during retirement.  This is because we have fewer expenses during retirement such as the costs of transportation for work, the cost of clothes for work and after-hours social gatherings with co-workers.  If you are debt free, mortgage free and plan to live a very simple retirement then 70% of your pre retirement income is more than enough – but nowadays how many people are completely debt free and mortgage free at retirement?

3. Find where your income will come from.  Planning your income is a huge part of planning for retirement.  I personally don’t want to rely on the government or my employer to provide my retirement income because that is just a risk that I don’t want to take.  I don’t think that anyone should plan for someone else to provide for them – we should take these income sources as an added bonus.  This is why it’s important to start planning for retirement at a young age – because you have more time to save and adjust to goals.

4. Keep up to date.  No one likes surprises, especially when it comes to their money.  If you are saving for retirement check your quarterly statement to keep up to date on your account balances.  Are your investments growing at a rate that you want? If not then maybe it’s time to make a change and rebalance your retirement portfolio. 

Photo by Asbestos Bill

Kristina Tahnyak

Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.