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retirement planning

Overlooked RRSP Strategies

There are a number of common RRSP strategies that many of us use on a regular basis. These include making regular monthly deposits, borrowing to make RRSP contributions and making contributions at the beginning of the year instead of the end of the year. Here are some strategies that may get overlooked:

The Three Levels of Retirement Resources

A survey conducted by a big bank some years ago* revealed that over 30% of Canadians were hoping for a lottery win to help fund their retirement. This raises the question, "If you were to paint a picture of your retirement, what would it look like?" Many would let dreams take over and envision lots of travel, a vacation home in an exotic location, spoiling their grandchildren, perhaps several year-long world cruises.

Retirement Investing Approaches

After spending likely 15 – 30 years focused on building an investment portfolio, it can be quite a challenge to switch gears when it comes time to withdrawing income from a retirement portfolio. This change leads to new ways of looking at investing as well as re-assessing habits that have been honed over decades.

Many retirees looking to generate income from investment assets often think that they can make withdrawals from their investment portfolio while also continuing to grow the assets over time. This is generally a tough goal to achieve.

What You Don't Know Could Cost You

The age old saying, 'Ignorance is bliss', may apply to many things in life. However, when it comes to your finances, ignorance can be absolutely devastating. Even the government is calling the startling low rate of financial literacy among Canadians an epidemic that can have catastrophic consequences for the nation's economic future.

A lack of knowledge on even the most basic financial matters has already led to a cascade of calamities that will have a far-reaching and long lasting affect on all of us. Among them:

Registered Retirement Income Funds

It is required by the Income Tax Act that a Registered Retirement Savings Plan (RRSP) must be closed by the end of the year in which the planholder (annuitant) reaches age 71. At that time, the annuitant must decide what to do with their retirement savings. They have three options - cash in the RRSP, buy an annuity, or convert to a Registered Retirement Income Fund (RRIF).

Finding the Right Retirement Location

Grant and Sarah are planning on retiring within the next two years. Paul and Linda, already retired, are thinking about making a move. Whether you are about to retire or are already retired and considering a change, you should consider:

Too Much Life at the End of the Money

You have probably heard the phrase; too much month left at the end of the money. Paying for housing, groceries, fuel, utilities and various child rearing expenses, although very necessary, can put a huge strain on a family when outlays sometimes exceed your income. Fortunately, this is usually only a temporary hiccup in most people's lives.

Should You Move in Retirement?

Many people look forward to retiring, and going to live beside a golf course, on the coast, or somewhere else where they have always dreamt of. It's enticing to think that your leisure time can be spent pursuing activities you have worked and longed for all your life. In fact, whole retirement communities are set up on the premise people want to relocate to such a scenario to live out the rest of their lives.

Debt Reduction as a Retirement Savings Strategy

Statistics Canada recently reported the ratio of household credit market debt to disposable income reached the highest level since the agency began tracking this figure. In 1990 it was 50%, rose to 110% in 2000 and jumped to 171% by the fourth quarter of 2017. This can cause some angst for those with children reaching post-secondary school age.

Don't Bet Your Retirement on a Simple Approach

You have probably heard about the old 70 percent rule that suggests retirees will need the equivalent of about 70 percent of their current income level to maintain their lifestyle in retirement. This assumes that retirement living costs will be 30 percent less during working years. While it may have been applied appropriately for retirees two or three decades ago, it is fraught with significant risk and potential disaster for today's retirees.

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