Retirement is the future ahead of you, regardless of your age right now. Retirement is a significant life transition that can be shaped by our choices, values, and priorities. It’s a decision, an opportunity to pursue passions, explore new interests, invest in relationships, or even continue to work in a different capacity. The concept of retirement can vary widely from one person to another; it can be a time for relaxation, for adventure, or for personal growth. It is a state of relevance, it could be of irrelevance as some people think and if made so.
The key lies in how one approaches this phase of life. For some, it might mean stepping back from a demanding career to focus on hobbies or volunteering; for others, it could involve turning a passion into a small business. Ultimately, retirement can serve as a canvas for creativity and reinvention.
It’s important to actively plan for retirement, considering not just financial aspects but also how you envision spending your time. Engaging with community, pursuing lifelong learning, and staying physically and mentally active can all contribute to a fulfilling retirement experience. By embracing this transition positively and proactively, you can create a meaningful and vibrant chapter in your life, defying the notion of irrelevance and instead thriving in this new phase.
Since Retirement is the future, how should you plan for it?
Retirement planning necessitate a great deal of deliberateness. The earlier you start to plan the better. Does that mean hopelessness to those just realizing the need to plan? The answer is NO! The best time to start anything is now, including improving your financial knowledge and plan.
While starting retirement planning early can provide significant advantages, it’s never too late to begin. Many individuals might find themselves at different stages of their lives, realizing the importance of planning for retirement later than others. The key takeaway is that taking action now can still lead to meaningful improvements in one’s financial future.
Starting a retirement plan at any point in life can yield benefits, especially if you focus on a few key strategies:
- Educate Yourself: Improving your financial literacy is a crucial first step. Understanding the basics of savings, investments, and retirement accounts can empower you to make informed decisions.
- Assess Your Current Situation: Take stock of your financial landscape. Understand your income, expenses, debts, and current savings for retirement. This will help you set realistic goals.
- Set Clear Goals: Define what retirement means to you. Whether it’s traveling, pursuing hobbies, or simply enjoying time with family, having a clear vision will guide your planning.
- Create a Budget and Savings Plan: Based on your current situation and goals, establish a budget that allows you to allocate funds toward retirement savings. Even small, consistent contributions can grow significantly over time due to compound interest.
- Explore Investment Options: Look into retirement accounts like Canada Pension Plan, Cash value life insurance, TSFAs, and consider speaking with a financial advisor to understand investment options that suit your risk tolerance and goals.
- Stay Flexible and Adjust: Life is dynamic; priorities and situations change. Regularly review your retirement plan and make adjustments as needed to stay on track.
- Focus on Health and Well-being: Retirement isn’t just about finances; maintaining physical and mental health will play a significant role in how you enjoy this phase of life.
Initiating your retirement plan now can lead to a sense of empowerment and control over your future, regardless of when you start. The important thing is to take that first step, recognizing that it’s never too late to build a fulfilling and secure retirement. Embracing the journey with optimism and clarity can make all the difference in creating the retirement you envision.
In Canada, there are several channels to retirement investment. Pension plan is an option where you and your employer contributes, you qualify for a certain amount from age 65 for the rest of your life and you are paid annuity. Canada Pension Plan (CPP) is another tool for retirement planning, to qualify, you must be 18 years, and have contributed for at least three year. Both employed and business owners can have a CPP account. CPP was structured to provide for only 25% of your income at retirement. Now it provides for about 33% of your income. Do you have plans in place to provide for the 67% shortfall? Another retirement tool is life insurance. At retirement you can leverage your life insurance for some cash, like borrowing against your policy, if you choose the right policy.
Whatever your reality is, the earlier you plan, and put structures in place the better. A multiple structure plan is a brilliant way to plan for retirement. Start by finding out what retirement benefits are available for you at your job. Run your numbers to know how much you would need at retirement. Then explore ways to plan towards achieving that.
We are happy to serve your retirement plan needs. Get in touch to get started.