Jump to: The Critical 10 | Financial Foundations | The Silver Generation | For Business Owners
Issues to consider 5 years before retirement and 5 years after.
5 Years Before Retirement
Retirement isn't just a momentary shift, but a continuation of the life you've been building. Barry LaValley, a retirement lifestyle specialist, emphasizes that understanding and preparing for retirement involves considering the continuity of your current life into this new phase. The concept of the "Critical 10" supports this view, urging attention to critical issues in the five years before retirement, with ongoing adjustments in the subsequent five years to ensure financial security during this transition.
Read more
4 Years Before Retirement
Retirement planning extends beyond investment management. The "Critical 10" framework emphasizes a comprehensive approach, incorporating estate planning, insurance coverage, income structuring, and philanthropic considerations into a robust retirement plan.
3 Years Before Retirement
The role of life insurance evolves significantly as retirement approaches and during post-retirement years. Safeguarding the future value of potential income, especially during early career stages and while supporting a young family, becomes a paramount concern. In the “Critical 10” framework, there are several things to cover and review to ensure financial security for you and your family at three years before retirement.
2 Years Before Retirement
Approaching retirement's threshold prompts introspection into the meaning and direction of this forthcoming phase. Retirement isn't a mere extended vacation; it's an opportunity for years of meaningful engagement. Life expectancy calculators estimate prolonged lifespans for many retirees, urging thoughtful planning for these extended years.
1 Year Before Retirement
As you get closer to that retirement date your focus begins to change from simply amassing a substantial nest egg to strategically transitioning towards generating income. In Canada, alongside self-generated income avenues, there are several government pensions that combine to form a fundamental base of retirement income. Now is the time to review your options for retirement income and determine some timelines.
First Year of Retirement
In Canada, many employers offer pension or defined contribution plans as part of their benefits. When retiring, you might face the decision of receiving monthly payments or opting to "commute your pension," converting accumulated funds into a lump sum.
Second Year of Retirement
The concept of retirement has transformed over the years and the actual average retirement age in Canada, as reported by the March 2012 Canadian Business Week, hovers around 63. Encouragingly, healthier lifestyles have increased life expectancy by roughly a decade since the inception of that famed London Life ad. Your retirement may be closer than you think and here, we share a few concepts to review in your early retirement years.
Third Year of Retirement
Contemplating future independence during the early years of retirement can feel premature, yet it's a pivotal time for considering holistic well-being. While the vigor of these years beckons, health and care concerns loom large in retirement reflections. Some of the most important concerns for retirees across all income levels include health and care issues.
Fourth Year of Retirement
Maximizing your RRSP savings through consistent contributions can pave the way for a substantial retirement fund, potentially reaching six or seven figures. However, the challenge lies in withdrawing from your RRSP efficiently to minimize tax implications. While leaving funds untouched for tax-free growth is often recommended, personalized strategies should be considered to optimize your retirement income.
Fifth Year of Retirement
As you move through the early retirement years, your planning develops beyond making sure you have financial stability and the right savings in the right places. Ensuring the protection of your loved ones after your passing is a critical aspect of responsible financial planning. Establishing an effective estate plan becomes essential as soon as you acquire assets or property. Overlooking these vital steps might result in significant expenses and potential legal disputes for your estate. Regrettably, misconceptions often lead individuals to underestimate the importance of estate planning.
Back to top
Planning and investing early in life.
Getting Married
Planning a wedding in Canada can be quite a challenge as popular venues get booked up a year in advance. To navigate this process, consider exploring resources for creative tips on caterers, attire, parties, and budgeting. Beyond the excitement of planning the big day, it’s essential for couples to consider the financial aspects that come with this significant life event.
Living Benefits
Early in your career, your most significant asset isn't necessarily financial; it's your human capital—the value of your skill set, knowledge, and ability to contribute to your work and to earn money. Protecting this asset is crucial, not just for yourself but for your family's security. While life insurance safeguards against loss of life, critical aspects like illness or disability affecting your ability to work are often overlooked. Living benefit insurance encompasses health and dental coverage, travel insurance, long-term care, disability insurance, and critical illness insurance.
Wills
Ensuring your affairs are in order might not seem pressing early in your career, especially if you haven't accumulated many assets. Even with limited assets, defining how you'd like your affairs handled and assets distributed in the event of your passing holds significant importance.
Children
Welcoming children into your life brings immense joy and responsibility, but it also comes with significant financial implications. The current average cost of raising a child to 18 in Canada is around $320,000; breaking down to roughly $1,482 per month. The initial year incurs substantial expenses—cribs, car seats, and other essentials that can strain finances. Daycare costs can be between $700 to $1100 per month per child. There is also potential income loss during maternity leave couple may experience.
Your Credit Score
Managing your finances becomes simpler when you're not reliant on borrowing money. The usual routine involves earning income, covering expenses, setting aside savings, and having discretionary funds. Being mindful of factors that enhance your credit score is crucial, as this metric can influence lenders' decisions regarding loan approvals.
Risk Reward
Setting yourself up for long-term financial success often begins with initiating a consistent savings regimen early in your career. Understanding the risk/reward trade-off is crucial—a measure of the desired return from an investment that isn't guaranteed.
Travel Reward Credit Cards
Travel reward credit cards make up a substantial part of Canadian banks' credit card earnings, fostering customer loyalty through points that function as a form of virtual currency. However, the perceived value of these rewards merits’ deeper consideration, given the associated costs and potential financial implications.
Starting Early
The Financial Foundations series is tailored for young adults just entering their careers, aiming to shed light on vital financial matters crucial at this life stage. This inaugural article underscores a straightforward yet crucial piece of advice: start your savings and investment journey early.
Issues to consider for senior investors.
Ageism: Understanding the Prejudice
Ageism, characterized by negative stereotypes and discrimination based on age, is pervasive in Canadian society. This prejudice manifests in various forms, from subtle biases in interpersonal interactions to systemic inequalities in employment and healthcare. Internalized ageism can lead to detrimental effects on seniors' mental well-being, contributing to decreased self-confidence, increased anxiety, and social isolation. As society continues to grapple with the challenges of an aging population, addressing ageism becomes increasingly crucial to promoting inclusivity and dignity for older adults.
Navigating Caregiving Duties
As the boomer generation ages into retirement, many find themselves juggling caregiving duties for their aging parents alongside managing their own family and career responsibilities. However, the emotional and financial toll of caregiving can be substantial, with caregivers often sacrificing personal time, social activities, and even their own health to provide support.
Maximizing Financial Stability: Sustainable Withdrawal Strategies in Retirement
Retirement planning is a dynamic process that necessitates regular evaluation and adaptation. Periodic reviews of withdrawal strategies, investment allocations, and legacy plans are essential to accommodate changing market conditions, lifestyle needs, and family dynamics. By proactively managing these aspects, retirees can enhance financial resilience and optimize their retirement journey for long-term prosperity and peace of mind.
Navigating Decision Making in Aging Populations
As individuals progress through life, the intricacies of financial decision making evolve, influenced by cognitive changes associated with aging. From declining fluid skills to the maturation of crystallized intelligence, understanding these shifts is essential for sound financial planning and risk management.
Navigating Peak Youth: Adapting to Global Aging
As the global population ages, economies face unprecedented challenges in sustaining workforce dynamics and ensuring continued economic growth. The demographic shift towards an aging population has profound implications for labor markets worldwide. This strain poses significant hurdles for businesses and governments alike, necessitating innovative strategies for managing the workforce and retaining talent in an aging society.
Issues to consider for the successful entrepreneur.
Navigating Business Transitions: Strategies for Succession and Continuity in Canadian Entrepreneurship
The entrepreneurial spirit runs deep in Canada, with a Statistics Canada survey in December 2022 revealing intriguing insights into the country's business landscape. At that time there were 1.22 million private businesses. reflecting a robust culture of entrepreneurship. Over 97% of those businesses would be categorized as small or medium size (SME). These small to medium businesses account for over 50% of Canada’s GDP and make up over 40% of good exported from Canada. They also employ about 64% of the country’s labour force.
Strategic Paths to Business Sale: Maximizing Value Through Asset and Share Transactions
Selling a business is a pivotal decision for any entrepreneur, and the method of sale can significantly impact the valuation and tax implications. Broadly, businesses can be sold either through the sale of assets or the sale of ownership interest (shares) in the business. Let's delve into the nuances of each approach and explore how they influence the sale process.
Navigating Business Strategy for Maximum Value: Insights for Future Sellers
As a business owner, you're not just building a company; you're crafting a legacy. Whether you're envisioning a future sale or simply aiming for ongoing success, strategic planning is key. In this discussion, we'll explore the intersection of business strategy and potential value, shedding light on crucial considerations for aspiring sellers.
Mastering Customer Satisfaction: For Business Success
Customer satisfaction, often abbreviated as CSAT, is a familiar term in business vocabulary. It's a metric many companies use to gauge how well their products or services align with customer expectations. However, if you're aiming to build a truly successful business, mere satisfaction shouldn't be your goal.
Maximizing Employee Retirement Benefits: A Comprehensive Guide
As a thriving business owner, you're aware of the importance of nurturing your employees' financial well-being. One strategy with enduring benefits is assisting your employees in securing their retirement funds. In Canada, the retirement landscape has evolved significantly, making it imperative for businesses to offer robust retirement plans. Let's explore the various options available and their potential impact on your employees' financial futures.
Unlocking Business Value: Navigating Influences
Business valuation is a complex realm where a myriad of factors shape worth. From balance sheet solidity to regulatory winds, diverse forces come together. Campbell and Nobes identify three key value creation sources in family businesses: ongoing income, tradable assets, and generational legacies. Understanding these dynamics is critical for strategic planning and decision-making.
Federal Budget 2024 and Proposed Changes to Capital Gains
Learn more about the proposed changes to the inclusion rate for calculating capital gains tax, which have created concern for owners of Canadian corporations and trusts.
"Valuable, diverse, and friendly"
Brian has been a valuable part of our investment strategy for years. He consistently comes up with new investment ideas and introduces us to new products to further grow our portfolio, increase returns, and balance our risk profile. We now have 8 separate investment accounts in our family, both registered and non-registered, personal, and corporate, managed by Brian. Beyond investment advice, he also has given us good advice on things such as retirement planning, insurance, and referrals. Beyond that, Brian is just a super friendly guy to talk to!
Dave and Nadya – Calgary
Contact Us