Is retirement around the corner? What you need to think about.

Another RSP season has come and gone and if you are one of the Canadians who greeted this season as one of your last and have retirement on the horizon it is time to start thinking about how to prepare.

The first place to start is to work out your retirement budget. If you have a current budget you can go through it and eliminate all your work related expenses. But don’t forget you should be saving towards unexpected medical expenses that may not be covered by your health insurance. You also need to consider you will have much more free time. How will you be spending it? Will your activities require a financial outlay?

Once you have a good idea of your expenses it is time to work out your expected retirement income. Review your pension statement and your most recent saving and investment statements. Having this information will allow you to see how much money you have to play with as you start making your plans. Include your payments from the Canada Pension Plan, Old Age Security and the Guaranteed Income Supplement, if applicable. Don’t forget to consider how much income tax you will owe on all sources of income.

This is an excellent time to take the Financial Cardio, Flexibility and Agility tests to determine what your current cash flow is and what your expected cash flow will be when you are retired. Now is the time to be paying off debt as quickly as possible. If you have outstanding debt speak to your financial institutions to make sure you are paying the lowest interest rate possible. If there are costly items you need or major repairs to your home get these things done while you still have a monthly income from employment. Likewise have any insured medical and dental work done before you leave your job. While many employers extend health and dental benefits to employees after retirement sometimes the limits and coverage changes. Talk to your Human Resource representative to make sure you understand your post-retirement coverage.

You can start looking into your eligibility for several government benefits such as OHIP senior drug benefits, Canada Pension Plan, Old Age Security and the Guaranteed Income Supplement. If you are eligible you can start the application process so you do not miss any deadlines or payments. In the six months prior to retirement start the process to turn your workplace pension plans into income. It is also time to review your will, power of attorney and estate plans and make any necessary changes. If you do not have a will, power of attorney or an estate plan now is the time to get one. Consult with a Certified Financial Planner who can help you develop a plan which allows you to provide for your loved ones and reduce the tax burden on your estate. It is also time to think about making a living will and discussing your wishes with your loved ones.

If after you look at your cash flow you are concerned you will not have enough money to meet your expenses several decisions need to be made. Are there expenses you can cut, can you put off retirement a little longer giving you time to bump up your savings, pay down debt or increase your pension payments? If retirement is necessary talk to your financial advocate at The Credit Union who can work with you to help you decide what your next steps are. Regardless of your financial situation our Certified Financial Planners will help you sort out your options and find the best possible solution for your retirement. We C.U.™ so you can stop worrying about retirement and start looking forward to it.