Financial Planning: Retirement Planning
We define
retirement as the point in time when a client doesn't have to work for money. They
may chose to work full time, part time, or for charity, but there is no financial
need to work.
Retirement Planning addresses answers four basic questions:
- Can I retire?
- At What Age?
- What Lifestyle Can I Support?
- How long will my Money Last?
Our Retirement Planning process starts with an assumption
of a desired retirement age and retirement expenses and related lifestyle in today's
dollars.
We start with current expenses from a household budget and
make changes to reflect a desired retirement lifestyle, in today's dollars. If by a
retirement date mortgage and other debts are paid off and children are no longer being
supported then those expenses along with savings for investments can be eliminated.
Further, some expenses may be increased as there is more time for entertainment, travel,
clothes and other discretionary expenses. This defines a retirement lifestyle in today's
dollars.
These expenses are increased for inflation to an
anticipated retirement date, and then demonstrated how they can be funded from:
- Private Pensions
- Government (Canada Pension, Old Age Security)
- Investment Assets (registered and non- registered)
Given all these assumptions the question of "how long
will my money last", can be calculated. We show (table & graph) the value of
retirement assets and home equity over time.
In many cases clients follow a strategy of downsizing their
homes at a time when they might be better in a smaller facility and make use of freed up
capital to augment retirement assets. Our planning process allows for any number of
scenarios of lifestyles, retirement ages etc.
We also take into account extraordinary items like
weddings, major trips, car replacements etc.
We would welcome an opportunity to discuss with you.
Contact us to arrange a Free Consultation. |
