It’s Time to Change How We Talk about ‘Retirement,’ Starting with the Word Itself. It’s been said going down a mountain is twice as perilous as going up it, and we find the same to be true for retirement planning. For the bulk of someone’s working career, it’s straightforward as people are in saving mode without too much concern about the swings of the market.
As the finish line approaches — or starting line, however, you look at it — you are now tasked with converting assets into income and making sure there is enough income to last (while keeping up with inflation) over a potentially 30+ year period, all in the context of the other pitfalls that could pop up if not addressed. Hopefully, however, with careful planning, one can go into retirement checking off their “peace of mind box®” knowing that these issues have been addressed and enjoy the retirement of which they have always dreamed.
Turning 50 often can act as an important milestone for people to really take a hard look at different aspects that may impact them In our 50’s retirement is often at the forefront of our minds as they are looking at our finances can be an exciting aspiration Though, as you get five to eight years from retirement, the “margin for error” on planning mistakes become less and less and the questions to ask become more critical.
Ask yourself and your Financial Advisor
1. What are your plans for retirement? Are you confident you are on the right path?
a. If you were unable to live in your current location, where would you want to go?
b. Have you considered if you could maintain a household alone if necessary?
2. Do I have enough saved for retirement? If not, with likely five to eight years left, what course corrections must be made today?
a. Is my money in the right places? Is it diversified properly? Am I taking on more risk than I need to (or should)?
b. What are your planned sources of retirement income?
c. Do you have any sources of debt? If so, what are they?
3. What percentage of my retirement income versus expenses will be guaranteed income (pensions, Social Security, income annuities, etc.) versus drawing down assets from accounts that can fluctuate?
4. Is my estate planning up to date? Is it correct?
5. Should I have life insurance that will continue beyond retirement?
6. What type of insurance coverage do I have (life, long-term care, Medicare, Life)?
a. What might long-term care cost me down the road, and how could I handle a potentially $10,000+ per month extra bill for a couple of years, for example, if need be?
7. Is my retirement plan ready for the impact of me or my spouse dying and what the reduction in Social Security would mean for the surviving spouse?
8. Do you have a written retirement plan?
9. Are you now working with an investment planning professional?
10. When should I collect the government benefits (Social Insurance, Canada Pension, etc.?
These are just some of the issues to consider when turning 50, or whatever age you find yourself seriously starting to consider retiring in the next five to eight years (or less). As much emphasis is placed on saving and investing, there often are other important areas missed in planning as mentioned, such as life planning (what goals do I want to reach, what do I want to do to leave a legacy,) state planning, life insurance and long-term care, to name a few. The earlier you start to think about these issues the better but remember it is never too late to plan. I started to plan for retirement about 8 years before I retired and was able to focus for those eight years to make my retirement what I wanted it to be.
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