RRSPs & Investments Step-by-step approach key to managing retirement income
by Ray Bosveld
There's no doubt that saving and investing during your career – particularly through a Registered Retirement Savings Plan (RRSP) - is critical to setting yourself up for an enjoyable retirement. But it's important to understand that the story doesn't end there. You also need to know that your money will be there for you as you need it during retirement. To help you ensure that your retirement funds will last, here's a systematic, step-by-step approach you may want to follow. The first step is to make a list of all your assets and debts so you can determine how much you have. That total should include all your stocks, bonds, mutual funds GICs and annuities. These assets should all be consolidated in one place, if possible. Next, you'll need to determine your retirement income needs. Whether you stop working or work part time, you'll likely need from 70 to 90 per cent of your pre-retirement income to maintain your standard of living in retirement. But remember that because this is just a rule of thumb, it makes sense to list your specific expenses to es-
timate how much you'll need. To have that income, you'll probably need to use withdrawals from your registered retirement plans. These withdrawals will have to bridge the shortfall you have between your estimated annual retirement expenses and any outside sources of income you may have - such as pension plans, government benefits, non-registered savings and part-time employment income.
“figure out how much you can withdraw each year” Knowing that, you'll then have to figure out how much you can withdraw each year. This is a complex decision that must take into account a number of factors including your life expectancy, risk tolerance and asset allocation. Of course, your choice of withdrawal sum will have a significant impact on how long your money will last, so
PLAN THE RETIREMENT YOU WANT. Start with professional advice. A professional Advisor can help you understand today’s market and provide the tools and information you need to successfully plan the retirement you want.
HollisWealth Ellen Luft, CFP® Investment Advisor 519-631-4088
HollisWealth Advisory Services Inc. Karin Barrie, MBA, R.F.P., CLU, CFP® Financial Advisor 519-631-4724
make sure you consult with a financial advisor in determining an appropriate amount. Once you decide how much you can realistically withdraw, and from which accounts, you need to put your strategy into action. This involves selecting a portfolio objective specifically matched to your goals and the risks you are comfortable taking. You should also have a spending strategy to help ensure your money lasts as long as your retirement does. Finally, it's important to review your situation annually. Over time, your health or income needs may change so your strategy may need to be adjusted. In tackling each of these steps, make sure you speak to your financial advisor so you have the professional support you need to do it all prudently and comprehensively.
Raymond Bosveld is a Financial Advisor with Edward Jones.
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