Retirement Planning
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There are many approaches to retirement planning, we use a simple eight-step process to get you on the way:
1. Outline your retirement goalsStart by listing your retirement goals on a sheet of paper. We suggest giving this some thought, because the first ten are easy to identify, the next ten are somewhat harder to recognize, and the last ten make you discover your inner dreams. Arrange your goals into short, medium and long-term goals. We can then set a rough cost to each where appropriate.
2. Assess your current financial positionTo help you achieve your retirement goals, you need to take stock of where you are today. This involves identifying the assets from which retirement income may be derived. You will need to determine your retirement budget needs and understand what you spend to support your current lifestyle. Preparing a retirement budget statement is a very difficult but important task.
3. Evaluate retirement risksYou must consider the risks that affect your retirement income. Inflation will erode the purchasing power of your income over time. The various investment markets may occasionally falter. You may well live to be 100 years old or more. All of these risks need to be taken into account.as well as your attitude to risk in any ongoing investments related to your pension 'pot'.
4. Understand healthcare issues |
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Long term care insurance proposals often present a confusing array of choices. How do you determine if it is right for you? Not everyone needs it. A careful evaluation of your personal situation and health / care may be required.
5. Identify retirement income sources
Retirement financial income may come from a variety of sources and the percentage of each may change over time. These sources may include a pension, current investments and other savings, and even part-time work. The after-tax benefit of each source of income needs to be considered. The timing of when to use each source also needs to be determined.
6. Invest your retirement assets
With goals identified and portfolio withdrawals requirements defined, we will propose an investment approach that meets your aspirations and your investment policy decisions.
Within the various retirement sources, understanding the character of the asset is important. Some income, such as wages and interest, may be taxed at ordinary tax rates, while dividend income and long-term capital gains may be taxed at zero or reduced rates. We always take into account the tax consequences of asset purchases and sales.
Within the various retirement sources, understanding the character of the asset is important. Some income, such as wages and interest, may be taxed at ordinary tax rates, while dividend income and long-term capital gains may be taxed at zero or reduced rates. We always take into account the tax consequences of asset purchases and sales.
7. Manage your retirement income
While in the working world, we are accustomed to getting income from our employer or from our business. With the onset of retirement, however, the paycheque ceases. Now income has to come from a number of different sources. Properly managing these retirement income sources requires planning and monitoring.
8. Monitor your retirement assets
It is important to conduct periodic reviews of your financial situation. Using the recent valuations and the retirement budget, a portfolio withdrawal rate may be calculated. By monitoring your portfolio withdrawal rate, you can assure yourself that you will have sufficient assets to fully fund your retirement. At worst, you may discover that you may need to engage in part-time work during retirement. You need to maintain a sustainable withdrawal rate strategy.
A regular review of your portfolio performance is important to detect early signs of inappropriate asset allocation. Quarterly reviews will give you the confidence to live the retirement lifestyle that you planned.
In summary, retirement income planning is a complex task and cannot be left to chance. If you need help sorting things out, please call us or send us an email.
A regular review of your portfolio performance is important to detect early signs of inappropriate asset allocation. Quarterly reviews will give you the confidence to live the retirement lifestyle that you planned.
In summary, retirement income planning is a complex task and cannot be left to chance. If you need help sorting things out, please call us or send us an email.