Top tips for retirement planning

(NC) Being financially secure in retirement starts while you’re still working. Because you likely don’t want to remain in the workforce forever, creating a plan can help ensure you’re confident living comfortably in retirement when the time comes.

Retirement plans and financial aspirations are deeply personal and often tied to family life, ambitions and values, meaning it’s entirely up to you when to start planning and saving for your post-work years. However, the worrying reality is many households in Canada don’t feel in control of their finances. According to a study from World Financial Group, 13 per cent of households have “forfeited contributions to their retirement accounts,” a decision that will have an impact later in life.

To ensure you’re prepared, consider these steps to plan for retirement.

Understand when you can retire and how much money you will need
Because nearly everyone has different goals for retirement, there’s no one-size-fits-all approach to when and how much money you’ll need to stop working. Assess your unique situation – including all your forms of income, assets and savings – and calculate what you’ll need to maintain your standard of living and cover expenses, including any discretionary spending, in retirement.

Choose an appropriate retirement plan for your needs
In addition to figuring out how much you should save, having the right savings vehicle is an important consideration. An employer-sponsored retirement plan with matching contributions to your RRSPs is a good place to start. If a workplace retirement plan is not available, consider setting aside money for retirement, utilizing a range of options held within your RRSP or TFSA. Some insurance products may also provide benefits such as life insurance coverage (and tax advantages) in retirement.

Take stock of your current assets
Your current assets include more than just what’s in your bank account. Beyond your paycheque, factor in real estate, investment accounts and any insurance policies you may have. If you need help understanding your finances, take a financial literacy quiz to test your knowledge, and then consider meeting with a financial services professional.

Create a retirement budget and look for ways to reduce expenses
Your retirement budget should look similar to your budget while still part of the workforce. Start by accounting for how much money is coming in and how much is going out toward fixed expenses like utilities, cellphone bills, insurance premiums, rent or mortgage, and vehicle payments, then track other expenses like groceries, gasoline and other spending toward non-essentials like entertainment and clothing. From there, look for ways to cut expenses to stretch your funds further, such as cancelling a streaming service, dining out less or skipping a new movie release.

Account for unexpected expenses
Before retirement, consider how you’d handle unexpected expenses such as a medical emergency, home or vehicle repair, or moving into an assisted living facility. Suppose you don’t have the appropriate health and homeowner’s insurance coverage. In that case you may be covering those costs out-of-pocket, which could limit or hinder your financial flexibility on a fixed income.

Test your literacy and find additional resources to plan for retirement at worldfinancialgroup.com.