Is Retirement On The horizon?

Here's what you need to do now

Over the years, I've helped hundreds of clients plan for a successful retirement. What surprised my clients most about the process was that it involves more than just financial planning - it also incorporates lifestyle changes into the picture. While many clients have no problem focusing on saving their nest egg decades in advance of retirement, thinking about how they plan to spend their retirement days seems more difficult.

So if retirement is only a few years away, here's a basic outline of some of the financial and lifestyle issues you need to consider before you receive your last paycheque.

Five years before retirement

• Evaluate your assets: Get a clear picture of your financial situation by accounting for your assets. This way, you'll know how much more you'll need to save to fund your desired lifestyle during retirement.
• Imagine exactly how you'll spend your retirement days. Planning for hobbies and activities now will get you thinking of fulfilling ways to spend your time.
• Determine your retirement living expenses: Calculate your monthly expenses to help you budget your retirement income.
• Fine-tune your portfolio: Review your investments with a financial professional to determine whether or not you'll need to make any major changes in advance.

Three more years ahead

• Estimate retirement cash flow: Know how much income you can expect from all sources (RRSPs, non-registered investments, pension, CPP, OAS, etc.). Then factor in living expenses to clarify how much you'll have every month.
• If you haven't already, get involved in activities or organizations that interest you. Doing so ahead of retirement will ease the transition process tremendously.
• Review health care coverage: If you're part of a group health plan at work, don't count on these benefits after you retire. In this case, look into options to help you manage this coverage on your own.
• Top up emergency funds: While you're still earning an income, make an effort to increase your emergency fund. This source of funds can protect you from unexpected financial situations in the future.

One year to go

• Review your pension options: If you expect a pension plan, review your options with your advisor to select the best course of action for you.
• Plan a celebration. If you've been waiting for retirement to take that world cruise, here's your chance to make your dreams come true. Planning your vacation now gives you something concrete to look forward to when retirement starts.
• Solidify plan with professionals: Lastly, don't forget to review your finances with your team of financial professionals before you retire. Talk to your financial advisor, lawyer and accountant to be sure that your plans are seamless and ready to go.

As you can see, there are several things you need to do if planning a successful retirement is important to you. If you're having troubles putting your plan in motion, give me a call. I'd be happy to share my insights with you, as shared by others who have successfully made this important transition.