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Are You Planning for Your Retirement Fully?

Retirement is the final chapter of your life where you enjoy the fruits of your working career. However, according to a recent Sun Life Financial survey, a quarter of retired Canadians are in debt in their golden years.

In fact about 25% of the 750 Canadians between 55 to 80 years of age polled for the Sun Life Financial Barometer stated they had debt ranging from mortgages to car payments.​These Canadians were either fully or partially retired when they were surveyed. About 25% were still paying off their mortgage, while 66% had unpaid credit cards.

Other types of debt carried by these Canadians included car payments, unpaid health costs, money owed on holiday expenses or a vacation property and home renovations. Also among those that were still working, nearly 30 per cent said they continued to work because they needed to.

Planning comprehensively for your retirement is even more important today given the results of the survey. Like most people you do not want to find yourself faced with debt, health care cost challenges, and worse, working because you need to so what do you do?

Firstly, know the difference between the run of the mill retirement planning and the more comprehensive retirement income planning.

Retirement planning is the process of determining retirement goals and then taking the actions needed to achieve those goals. It includes identifying sources of income, estimating expenses, implementing a savings program and managing assets in a way that generates returns.

Retirement income planning is also a process but adds other important elements: reducing debt, managing taxes and leaving a legacy. It is more comprehensive and allows you to fully plan for your retirement by considering all of the income streams available to you upon retirement including your RRSP, TFSA, employee pension plan, Old Age Security, the Canada Pension Plan and the Guaranteed Income Supplement. And then efficiently managing the tax implications on all these streams in a customized way. Retirement income planning also aims to reduce the impact of taxes on your estate and wealth legacy for your family. This is important as death taxes can be more than all of the tax you have paid throughout your life.

Right now you may be asking "How do I get the retirement income planning I need." Our advice:

  • Create a retirement lifestyle vision: Ask yourself what do you want to do and what is going to make your retirement the most fulfilling part of your life. Visualize what your best realistic retirement lifestyle is and create a vision of it.

  • Determine how much you need: Now that you have a vision of what you want as a retirement lifestyle, work out how much income you need to live that lifestyle. Always factor in debt and unexpected costs like healthcare.

  • Find a financial professional who can help you: Look for financial planner who can provide you with the advice on how to reduce your debt, maximise the returns on your investments and efficiently manage your taxes up to the end of your life and beyond. Choose someone who can provide a customized retirement income plan not just someone who can help you chase after returns.

If you want a checklist of questions to ask a potential financial planner, please email your age an approximate income to to get one that is customized for you.

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