If you are starting to think about retirement and the end of your working life, but you haven’t got a solid plan in place yet, it is not too late! Talk to your local credit union to get the help you need every step of the way as you start to get ready for retirement.
There is a credit union near you – credit unions can be found across Alberta, in communities large and small. And the experts at credit unions are here to help you create a budget, determine how much you need to save, and help you get the retirement you want, no matter if you have five years of work left or fifty. Find a credit union near you to get started today!
Here are some ideas on how to get started planning for retirement if it’s coming soon:
Review your financial situation
Take a realistic look at your current financial circumstances and overall financial health. Review your assets, investments, debts, and income. Assess any savings you have, including specific retirement savings such as pensions, Registered Retirement Savings Plans (RRSPs), or other accounts.
Set retirement goals
How do you want your retirement to look? Are you going to stop working all at once, work part-time for a bit or will you transition to contract or project-based work? Are your goals to travel, go back to school, visit family, or buy a vacation property? Look at all the factors from housing to healthcare to hobbies to family to set your goals and determine what you need to save.
Create a retirement budget
Develop a comprehensive budget that outlines your income and expenses now and upon retirement. Be sure to factor in changes to your income once you’re done working. Use this budget to map out how much you need to save now and how much you’ll have to work with once you retire.
If you aren’t already, take advantage of retirement savings options and products from your employer or financial institution and contribute as much as you can afford. Aim to take advantage of tax breaks and compound interest while you can.
Try out investing
Speak with your credit union’s financial advisor to explore investment strategies that align with your risk tolerance and retirement goals. The more you can diversify your investments the better in order to spread risk around and potentially increase returns. Review and adjust your investment plan at least once a year.
Review your insurance options
A big cost as you age is healthcare expenses, especially if your employer plan doesn’t continue into retirement. Look at the insurance you have, how long it lasts for and exactly what it covers. Explore additional insurance to cover things like long-term illnesses, at home care or care facilities. Be sure to consider factors such as your current health and family history when determining the best options.
Get rid of debt
Paying off high-interest debts, such as credit card debt or loans, should be your priority. If you have a mortgage, focus on paying that off or downsizing your home to increase financial flexibility. If you don’t own your home, you’ll want to save extra in your emergency fund to help cover rent costs in retirement.
Adjust your retirement date
Is it possible for you to work longer? A few more years of full-time income could have a significant impact on your retirement lifestyle, as it gives you more time to save. Just be mindful of taxes if you’ve started collecting on any of your retirement savings like an RRSP or pension and are continuing to work, as this may cause you to owe more taxes than expected.
Do your research
Read up on Canada’s Old Age Security and Canadian Pension Plan program to ensure you are familiar with the system and understand it. Determine when you are eligible to start receiving benefits and how much your monthly benefits will be. Consider the age you plan to begin receiving benefits, as this can impact the amount you’ll receive over time.
If this all seems overwhelming and stressful, talk to a financial advisor or wealth manager at your local credit union to get specific advice tailored to your financial situation. A credit union can help you navigate the complex financial rules of retirement and help you develop a personalized plan – find one near you here.