Aging Gracefully

– At the turn of the century in Canada, the life expectancy was only 56 years old.  By 2012 the average life expectancy for Canadian men rose to 79.14 years; and women 83.44 years. There are more centenarians than ever before and the 90+ age group is the fastest growing segment of the population.

Though many baby boomers might argue, the term Elder describes anyone over the age of 50.  As Canadians age; their financial needs evolve and change as they move through the aging process.

In Your 50s and 60s – investing becomes serious business

• Retirement is on the horizon.  It is time to think about preserving your assets, start by altering your asset mix into a lower risk portfolio.  Consider a conservative approach that includes a good portion of fixed income instruments.
• Create a snapshot of how much you own to help you understand how your assets will help fund your retirement.  For instance, your RRSP will be a good source of regular income; while other accounts like your TFSA can pay for vacations or other large purchases.
• Implement a Cash Flow Plan and pay off all outstanding debts.

 

In Your 60s and older – looking at retirement

• Adjust your financial plan to achieve your ideal retirement lifestyle, whether that includes taking early retirement or an extended trip, or launching a second career.
• Consider income-generating investments coupled with a conservative asset mix.
• Maximize your RRSP contributions and consider an RRSP loan for making catch-up contributions, as you will only be able to contribute to your RRSP until the year you turn 71.
• Review and update your Will and Power of Attorneys, as well as your beneficiary designations on your RRSPs, RRIFs, TFSAs and insurance policies.

 

In Your 70s and older-you have specialized needs

• At 71 you will need to convert your RRSPs to RRIFs and start withdrawing income, talk to your advisor about the tax implications
• Review your investment portfolio, but don’t go all conservative too quickly, thus “going broke safely”.  Capital protection is important and while the return and safety of bonds can be attractive; it is important the average person still has some equities well into their retirement-especially if they are healthy and can expect to live into their 90s.
• Plan for discretionary health care expenses.  This could be in the form of retirement housing, cross-border health care or even potential amendments to the Canadian system.
• Review and update your Will and Power of Attorneys, as well as your beneficiary designations on your RRSPs, RRIFs, TFSAs and insurance policies
• If you haven’t done so already, introduce your children to your advisor, make sure everyone understands your needs and wants

 

The golden years are meant to be just that – not a time to cut back on your lifestyle.  Unfortunately, outliving money will be a more likely scenario for many Canadians who have not properly prepared.

Like never before, aging Canadians need strong leadership and financial advice, don’t wind up somewhere unexpected; contact me for a review of your current situation.