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BMO Nesbitt Burns
132 Trafalgar Road
Oakville, ON
L6J 3G5

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LifeStages 4

A guide to financial planning for every stage of life - specifically designed for women.

LifeStages identifies key investment issues and challenges for each of life's five financial stages. Going forward I will highlight each stage with a brief case history designed to help you to better understand sound financial planning principles. Please check back often to review each stage.

LifeStage 4 (Ages 55-65): Pre-Retirement

Case Study: Katrina
Katrina may be 64, but her friends say they can’t remember a time when she was more active and alive. That may be surprising, because it was only two years ago that her husband, Tony, died suddenly – leaving Katrina at the lowest point in her life. She had a lot to deal with, but managed somehow. Now, she travels with friends and spends a great deal of time with her three grandchildren. Financially, Katrina is poised for a happy retirement – which is ironic, because investing had been a foreign concept to her. But, after Tony died, Katrina met with his Investment Advisor and became fully involved in the investment-management process. Taking an active role in the shaping of her financial future has contributed to her growing feelings of security and happiness.

Retirement Income: Katrina's Checklist
Working with her Investment Advisor, one of Katrina’s first steps was to establish a list of all of her sources of income. The methodology applies to anyone:
  • Find out what you can expect from government programs when you reach retirement age. (Remember, by the time you retire, Old Age Security and the Guaranteed Income Supplement may be gone).

  • Check with the Income Security Programs office to find out how much you can expect from the CPP. Once each year, you can request a detailed calculation of your retirement benefit, based on your contributions to date.

  • If you are both age 60 or older, consider whether it’s worthwhile to jointly share your CPP retirement pensions with your spouse or common-law partner.

  • Consider all of the RRSP Maturity Options available to you.

  • Carefully review the benefits you (and your spouse) are entitled to from your workplace pensions when you retire.

  • Find out about your partner’s pension plan, investments, RRSPs and other financial assets. Know where they are held, what they are invested in and what you’re entitled to if your partner dies.

  • Review the distribution of anticipated retirement incomes for you and your spouse. If you have been following long-term income-splitting strategies, this is where you will begin to see the payoff. If not, this may be your last opportunity to equalize future income streams to reduce the annual amount of tax you will pay as a household. These tax savings translate directly into a higher standard of living throughout retirement.
Investment Planning Goals
I will help you select appropriate investments based on the following key elements: – RRSP Investments – begin to shift towards a balance of current income and stability of principal, while still allowing for some capital growth to provide inflation protection. – Non-RRSP Investments – current income and stability of principal should be weighed against capital growth, depending on your overall income needs.

Things to Consider
Retirement-planning issues are the focus of LifeStage 4. If you haven’t done so recently, now is the time to take a close look at your retirement plans so that you can close any gaps between the retirement income you need and the one you can expect. Here are some things to consider.

LifeStage 1
LifeStage 2
LifeStage 3

* Fictional characters. Any similarities between them and actual clients of BMO Nesbitt Burns Inc. are accidental.