Planning for a long life
As a result of gains in life expectancy, most of us can plan on living longer. Today’s 65-year-olds can expect to live 17 to 20 years beyond retirement (on average)1. Even more telling, an increasing number of Canadians are reaching the age of 100. Between 2006 and 2011, the rate of population growth for this age group was 25.7%, the second most rapidly growing age group among all age groups after those aged 60 to 64 (which increased by 29.1%)2.
The odds that you’ll live a long and healthy life after retirement are solidly in your favour – and getting better year to year. That is good news – especially if you begin to plan now for all those extra retirement years. Here are some tips to get you on track for a long and comfortable retirement.
- Look at your retirement from every angle and decide on your desired lifestyle.
- Enhance your expected income from investments held within an RRSP with a complementary portfolio of RRSP-eligible investments held with your RRSPs plus non-registered investments.
- Assess your essential and discretionary spending requirements and adopt an investment strategy that will cover your needs. Include planning for such essential expenses as housing, food, clothing and medical treatments and for such discretionary expenses as travel, dining out, a new car, and so on. Take into account that your need for discretionary funds is likely to diminish over time and your need for essential expenses will probably rise as you age.
- After retirement, manage your retirement savings based on the amount of your savings, the average return on your investments, and the number of years you plan to make withdrawals.
- Shelter excess capital and maximize the value of your estate with life insurance. Consider a life annuity that will provide a guaranteed regular income no matter how long you live.
- Be sure to protect your income (and your spouse’s) with life insurance and supplementary disability, critical illness and long-term care health insurance.
- Regularly assess your plan – checking investment performance, changes in your expense levels and any other factors that can impact your level or years of income during retirement – and revise as required.
It’s great to know you can plan to enjoy years and years of retirement. It’s even better to know – without doubt – that your retirement income will match your retirement dreams for all your retirement years. Your professional advisor can help make sure that happens.
1 The Daily (Statistics Canada), Monday Sept. 27, 2004 – based on 2002 mortality rates
2 The Daily (Statistics Canada), Tuesday, May 29, 2012
This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.
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