Transitioning into Retirment

Expenses and Investment

expensesandInvestment_128856175When preparing for retirement, the most important thing is to decide what type of lifestyle you want to have in retirement – it should be your main priority. In order to prepare for this, the best way is to create two categories for expenses: living expenses (the necessities of life), and lifestyle-based expenses (things that are more discretionary, but not a necessity). Once you understand the difference between the two types of expenses and in which category everything falls into, planning for retirement is much easier.

It is also important to plan on how you are going to fund your retirement. To do this, you need to look at your attainable retirement income. This is all the resources you have available to you and how much your resources will support, usually comprised of government benefits, employer benefits and pension plans, and registered assets. Once you have determined the amount of resources you have available to you, it is important to understand how these resources correlate with each other, especially in terms of taxes. This is because these different assets have different tax treatments, and it is not as simple as tax being deducted from a pay cheque. The best way to get an accurate estimate for this and to make sure you are considering all income sources is to contact us.

Finally, once you have determined your expenses and income, it is time to invest in a portfolio that works best for you. The amount of risk you want to take is in direct proportion to the amount of fixed income you have available to you. Plus, liquidating your assets may not be the best decision, because you could get very little return on cash that does not keep up with inflation. In other words, if you liquidate too much, you run the risk of running out of money. On the other hand, the opposite is also true. If you invest too much, you could be severely negatively impacted. Therefore, it’s important to find a balance that best works for you and your needs based on your living expenses and lifestyle-based expenses. We can explain your investment and liquidation options to ensure a positive financial retirement future.