As you approach retirement, it's important to get your personal finances on track.
Your 50’s can be a time of transition – your kids may be starting university or moving out, your earning power has increased, your mortgage may be paid off and you are beginning to think about retirement more than ever.
As retirement approaches, consider these tips to keep your financial house in order:
- Go for tax efficiency. Try to maximize your registered retirement savings plan, tax-free savings account and (if available) voluntary contributions to a workplace pension plan. Also remember that earning dividends and capital gains in non-registered plans will keep more money in your pocket than interest income.
- Adjust your portfolio. As you near retirement, consider allocating more of your assets towards investments that provide safety and capital preservation, while maintaining some growth-oriented investments to help meet your long-term financial goals. Your advisor will help you find the right mix for you.
- Assess your insurance needs. From disability and critical insurance to business and life insurance, think about protecting what’s valuable to you and your family. What coverage do you need? How much? Also start thinking about future long-term care and how you’ll fund it.
- Get a taste of retirement now. Most people face an income reduction in retirement. Practice living on less to see what your lifestyle could be and consider downsizing your home. You’ll get a sense of the right income level in retirement and then your advisor can help you plan to generate that income.
- Work with a financial advisor. Ideally you’re already being professionally advised, but if not, you can still benefit from a personalized financial plan. People often think they are ready for retirement when they’re not, so an advisor can provide immense value and help you address any financial shortfalls.
Bonus tip: If you own a business, think about succession planning. Will you sell the business? Pass it down to family members? Devise a plan well before you retire.
Checklist: Things to Do
Maximize the tax efficiency of your portfolio
Adjust your portfolio
Assess your insurance needs
Practice living now on your retirement income
Talk with your advisor about asset allocation
Book a meeting with your financial advisor today to ensure that your financial plan is right for your personal circumstances or visit AGF.com/ValueOfAdvice.
The contents of this Web site are provided for informational and educational purposes, and are not intended to provide specific individual advice including, without limitation, investment, financial, legal, accounting or tax. Please consult with your own professional advisor on your particular circumstances.