Retirement planning today has taken on many new dimensions that never had to be considered by earlier generations. For one, people are living longer. A person who turns 65 today could be expected to live as many as 20 years in retirement as compared to a retiree in 1950 who lived, on average, an additional 15 years. Longer life spans have created a number of new issues that need to be taken into consideration when planning for retirement.
Lifetime Income Need
There actually is a lifetime after retirement and the need to be able to provide for a steady stream of income that cannot be outlived is more important than ever. With the prospect of paying for retirement needs for as many as 20 years, retirees need to be concerned with maintaining their cost-of-living.
Health Care Needs
Longer life spans can also translate into more health issues that arise in the process of aging. Canadian provincial governments provide a safety net in the form of universal healthcare, however, it may not provide the coverage needed especially in chronic illness cases. Planning for long-term care, in the event of a serious disability or chronic illness, is becoming a key element of retirement plans today. It is in your best interest to discuss Long Term Care and Critical Illness coverage to see how it could play a role in your plan.
Planning for the transfer of assets at death is a critical element of retirement planning especially if there are survivors who are dependent upon those assets for their financial security. Planning for estate transfer can be as simple as drafting a will, which is essential to ensure that assets are transferred according to the wishes of the decedent. Ensuring that assets are joint with your spouse (if you have one) OR making beneficiary appointments on investments where available is important in making sure you estate doesn’t go through the probate process. Discussing how your situation would play out if a sudden death occurred and if you have planned properly or if the plan needs some adjustment would be beneficial.
Paying for Retirement
Retirees who have prepared for their retirement usually rely upon three main sources of income: Government sponsored plans, individual or employer-sponsored qualified retirement plans, and their own savings or investments. A sound retirement plan includes maximizing these incomes to an individual’s full benefit.