By Ilona Biro and the Sun Life team
Are you retiring earlier than planned? See how an advisor can help you make a smooth transition into retirement, whether you feel ready or not.
What can you do with your early retirement offer?
If your employer pays you early retirement benefits, it is essential to get advice. An advisor can show you how to maximize your retirement income while minimizing your expenses.
How does the stock market affect your retirement?
If you’re retiring soon, you may be worried about market volatility. You would certainly like to ensure that you keep the gains from your investments. Your advisor can help you develop a strategy that matches your risk tolerance profile. This will come in handy, as you will likely start earning this income sooner than expected.
The advisor may, for example, suggest stress testing your portfolio. This test lets you see what might happen if your investment returns drop during your retirement.
What to do when the stock market tumbles?
How to reduce investment risk
Another option is to use some of your retirement savings to purchase an annuity. Life annuities offer you a guaranteed monthly amount until the end of your life. This helps to cushion the shock in the event of a market downturn.
What is an annuity? (video)
Please find out how much regular income you could get from a life annuity with our annuity calculator.
What will your retirement expenses be?
Everyone has a different vision of the ideal retirement. It will take time to determine how you want to spend your retirement years.
How much money will you need in retirement?
Welcome this transition. “Instead of accumulating income, you are now in a period where you must above all preserve your income. Adapting can be difficult,” says Councilor Scott Evans.
The good news? “You will certainly spend less than when you were employed,” he says. You will no longer have to buy lunches or clothes for work. »
Work with your advisor to put a number on some of the projects you want to achieve during your retirement years. This will help you find ways to reallocate your resources to meet your new needs best and achieve your unique goals.
Do you need to change your will, insurance policies or estate plan?
As you get older, you need to make sure everything is in place in severe illness or injury. This is especially important if you plan to spend time outside the country during your retirement. It is advisable to review your important documents every four years or whenever a significant change occurs in your life. This includes in particular:
Will
Designation of beneficiaries
Medical guidelines
Mandate (power of attorney)
However, it can be challenging to keep track of all this paperwork. An advisor can help you change your beneficiary designations for your annuity, insurance and investment contracts. Your notary will be able to update your will as well as your mandates and powers of attorney.
Six important points for writing a will
Five ways to clean up your finances
What will happen to your workplace benefits plan?
Your retirement plan and workplace RRSP are indeed an integral part of your retirement savings strategy. However, it is wise not to limit your view of these assets. Some employers offer extended medical and dental benefits to their retired staff. Some also provide the possibility of keeping life insurance at work.
Where will I find the money to pay my medical expenses in retirement?
“Your advisor can help you determine if your options are competitive or if a private contract is better,” says Evans. If you are lucky enough to have a defined benefit pension plan, there are options to consider, such as indexing to inflation or paying benefits to your spouse upon your death. » An advisor can help you evaluate your options.
How to get the most out of your retirement plan
Successfully funding your retirement is more than ticking boxes on a list. Instead, it is a quest to understand:
What you have
What you want
The rules and regulations that frame your options
Get help from a finance professional
It can be challenging to manage your finances, especially if you have to face a sudden or unexpected retirement.
