Thinking to Retire?

Three Tips to make your decision easier when the time comes...

Preparation for Retirement needs to be planned a few years in advance to do it successfully. Retirement is the great unknown for many, not knowing what to expect. There is no manual for you to follow.

Some questions to consider:

• How I will feel in retirement?
• How I will spend my money...and on what?
• Does my spouse have the same goals and thoughts on retirement?
• Will I be ok not referring to my title at work anymore?
• Will it feel uncomfortable or isolating not needing to be somewhere each morning?
• Will I have saved enough?
• Will I run out of money? I don't want to be a burden to my kids or other family members.

This article will focus on three financial tips to start a strong focus and strategy to improve your financial success in retirement. In future issues, I will address other strategies for a successful retirement to compliment today's tips in building a strong financial foundation.

1) Save.

Typically saving 10-20% of your gross income is a great plan throughout your working years. If you have fallen behind, never got started or are right on track, the last 10 years before retirement can significantly impact your retirement success. This is when your income is the highest it has ever been, debts have been paid down or eliminated, kids are through school and costs are lower, so this is the opportunity to squirrel away as much money as you can and get it working for you. Stockpiling now will prepare you for the future.

2) Top up all retirement accounts within reason.

Find out how much you can contribute to any tax deferred, tax free, work matching plan (this is free money). Once you know the numbers, develop a plan or strategy to fill up those plans over the next 10 years. Speak to a professional to ensure you are making the best use of funds available. Quite often a tax deferred plan can help fund a tax free account. Any tax refunds should be reinvested.

3) Keep Taxes at Bay.

It's never how much money you make, but how much you get to keep after the tax man shakes you down. Utilize Tax advantaged accounts, look for tax deductions, talk to a professional. Taxes can be saved based on asset allocation, asset location (what type of account it is held in) and tax strategy (can I move money around from one type of account to another and save on my taxes?)

Good Debt vs Bad debt scenario. A good debt is a debt that appreciates in value and is tax deductible. A Bad Debt is a debt that depreciates in value and is not tax deductible. Can you use debt to help you achieve you wealth accumulation goals and save on taxes?

In summary:

There are many other components but these three tips will be a great foundation for you to build upon. You will start to build more confidence in your plan and your future goals.

Also remember your plan is individual to you - no one else is in your exact same position.

Be wary of coffee shop conversations with friends or colleagues that may be in a very different financial situation than you are and have different goals and risk tolerances. Speak to a professional and have a customized plan built for you. Just like you wouldn't try to fix your own broken arm (you would see the doctor-an expert in that field) and if your car broke down you would take it to a mechanic (an expert in their field), for financial success, you should use an expert in the field.

Click here to book a meeting.

Complexity Simplified,

Kerry