Clients nearing retirement may be facing the hard reality that they can’t afford the post-work lifestyles they wanted. It’s likely they haven’t saved enough to cover rising inflation, changes to CPP and OAS, or the fact that they’re going to live longer.
In fact, 30% of Canadians aren’t sure how long their savings, pension and investments will support their desired levels of retirement income, reports Investors Group.
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So what should they do now?
“Get to work on developing a clearer idea of how they plan to live in retirement and if the lifestyle they have in mind is financially feasible,” says Aurele Courcelles, director, tax and estate planning, Investors Group.
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Here are a couple tips to get a better understanding of retirement needs:
- Make sure clients understand their specific financial positions, where their retirement incomes will be coming from and how much;
- Set realistic budget expectations so income can cover all the planned expenses, taking into account periodic expenses, including insurance payments, taxes, and vacations.
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“Making sure that retirement savings last long enough will also require adjustments to investment portfolios to match the various retirement living phases individuals can expect to experience over a lifetime of retirement living,” says Courcelles.
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