Roy Essential Guide To Retirement Readiness

Finances * Health & Wellness * Relationships * Life Purpose
1. Auflage 2014
ISBN: 978-0-9940075-1-3
Verlag: Daniel Roy
Format: EPUB
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 108 Seiten

Are you ready to get real about your retirement? Today, retirement is a new beginning. Many Baby Boomers are healthier, wealthier and living longer than their parents. Yet while many plan financially for retirement, far fewer consider the social and psychological changes retirement will bring. As a result, some find themselves bored after a year or two of leisure or depressed because they feel lost without a new identity. The Essential Guide to Retirement Readiness is your complete reference for thinking through this next phase of your life. You can use the thought-provoking questions and insights to help you consider the key areas for achieving an active and satisfying retirement, from health and family to life purpose and finances. In this comprehensive guide, you get: •Expert instruction on saving for retirement and the steps to take to ensure your wealth outlives you. •Advice on creating specific goals through the three stages of retirement based on how active you can and want to be. •Tips for finding fun and fulfilling activities and even using the skills you've spent a lifetime developing. •Ready-to-use financial planning worksheets, a resource guide, and more. Daniel Roy, founder and CEO of Praxis Wealth Management, is a certified retirement coach and a certified financial planner with 28 years of experience. He is also a speaker and trainer on wealth management strategies and retirement planning.

Autoren/Hrsg.

Roy, Daniel

Leseproben

Your Finances Did you know you can have a satisfying retirement no matter what your budget? Looking after your health, your relationships and even developing a new life purpose need not be expensive propositions. Still, it’s not for nothing that one of the four pillars of a successful retirement has to do with your finances. To give you a better understanding of the issues around your financial well-being, I’ll boil them down to the three main stages in your financial life that you must be aware of. 1. The Accumulation Phase 2. The Income Generation Phase 3. The Distribution Phase The Accumulation Phase refers to the act of saving your money for your stated objectives, in this case, your retirement. People typically start when they enter the workforce at age 25 or so and keep saving until they retire, anywhere between the ages of 55 to 65. The Income Generation Phase, which involves turning your savings into a retirement income stream, can happen from as early as age 55. And finally, the Distribution Phase occurs when you pass on your remaining wealth to the next generation upon your death. Everybody needs to have a plan of action for each one of these three phases so that you can seamlessly pass through one phase to the next. This requires some forethought and planning if you are to design a robust and tax efficient financial structure to look after all of your needs. A well-structured financial plan, done with the help of your financial planner, your accountant and possibly your lawyer, will help make this transition as worry-free as possible. Why Retirement Savings Matter The objective of all retirement savings plans is to be able to replace your pre-retirement income with revenue from the money that you have saved and invested over the years. Your Retirement Income Plan, as developed by your financial planner, will become very critical for you as you leave the safety of your regular work paycheque and start drawing income from your savings. The Retirement Income Plan will outline where your income will come from, the amount you will withdraw and the timing of when you will do so. Such an action plan will enable you to take advantage of certain tax strategies that are available to you. The objective is to maximize the amount of money you will receive while reducing your tax liabilities at the same time. This means that you get to enjoy more of the money that you saved over the years. Depending on what your financial needs look like, you will need to replace somewhere between 75 percent to 100 percent of your pre-retirement income to maintain the same lifestyle you were accustomed to prior to leaving work. Therefore, the faster that you can accumulate the funds needed to achieve this target number, the sooner you will be able to leave your work and start this new chapter in your life. When you are setting targets for the accumulation of your retirement savings, keep these four points in mind: At the very least, you want your retirement savings to be able to provide you with income to the end of your life and then for your surviving spouse as well. You need to decide on how much you would like to pass on to your family in the form of an inheritance. You should consider your philanthropic wishes, that is, how much of your money you want to give to charitable causes that are meaningful to you. This is something to plan for only after you have looked after the first two points in this list. You also need to know how much of a potential tax liability your estate will have when first you and then your spouse passes. Proper planning for these four important points can alleviate a lot of unnecessary stress for you and your family. Don’t wait till the last minute to put these measures in place since it can be very costly to implement later on, in some cases, even become impossible. Be mindful of taking on too much unnecessary risk in your portfolios as you move on in age. Do realize, however, that you don’t want to run out of money before you expire, so plan well and save more than you actually require. This will provide you with a nice buffer if you face unexpected challenges like below-average returns on your investments or the need to withdraw more cash from your portfolios than anticipated. It takes many years to build up the required financial resources to properly fund a retirement, so you need to start as early as you can to accumulate funds. Have a goal in mind of how much money you will need and start saving today. Robbing a bank or relying on lottery winnings are not methods that I recommend my clients adopt to build their wealth. There are no sure things in life other than death and taxes but having a savings plan that is in line with your retirement objectives is the safest way to go. This disciplined method is certainly one that will be able to generate positive results over time and help you build up the required financial resources to fund your retirement. Take control of your financial affairs before you retire Getting Professional Advice I highly recommend that you seek out the help of a qualified financial planner (or financial advisor, as they are also known) to help you plan your finances for your retirement. Multiple surveys conducted over the years have confirmed the fact that people working with financial planners tend to do much better in retirement than those who do not. The most recent one conducted by Fidelity Investments, a large multinational financial company, confirmed this fact once again. Of the retirees who have an advisor, 71 percent have the type of retirement they were hoping for versus 53 percent for the ones not working with one. Still, a word of caution is in order here. Although there are many well-respected professionals out there, be careful when choosing one to work with. Select only someone you can trust. Get recommendations from your friends and family on who they are using and interview potential candidates before you engage their services. The fact is, anybody can call himself a financial planner. As you seek one out, ensure that they have the required qualifications such as the Certified Financial Planner (CFP) designation, which is considered by many the gold standard in the financial planning industry (see www.cfp.net and www.fpsc.ca for help finding a professional). Anyone holding a CFP designation has gone through a rigorous level of verifiable training and is also required to do annual training to maintain their status. Some planners charge a fee for their services and do not sell investment products while others do both, so shop around to find the solution that best fits your needs. The Financial Checklist A clear picture of your financial resources is critical as you approach and eventually transition into retirement. If you have a spouse, I strongly suggest that both of you get involved in this exercise. Your goal should be to ensure that your finances are well taken care of before you leave work. That means clearly understanding how much money you need to save and how much income you will be able to get from all of your potential retirement income sources. To help you, here are eight key questions that you must answer as you prepare financially for your retirement. Do you know where your money is located? Taking your bank and portfolio statements and putting them in a drawer when they come in every month is like burying your head in the sand. But you cannot be in denial about how much money you have (including debt) and where it comes from. You need to adopt an attitude of engaged interest and fully commit to knowing the state of your financial affairs. After all, your financial structure will not magically appear out of thin air when you need it down the road. And if you live with a spouse, you both need to be involved with the finances so that you can make decisions that are mutually beneficial. To start, make a list of the investments that you own. Is your money invested in registered plans like RRSPs, RRIFs, TFSAs, RPPs, IRA, 401k or similar plans? Do you have money invested within a Whole Life or Universal Life insurance policy that you purchased many years ago? Some of your money might be invested in bank accounts or investment accounts. Collect all of your statements to find out what you have. As you begin to get an overview of your financial situation, notice whether you have accounts at more than one institution. I always recommend that people consolidate their accounts with one institution/advisor when the timing and the conditions are appropriate to do so. This will provide you with better overall stewardship of your assets, possibly reduce the fees that you pay and, most importantly, simplify your affairs. As you move on in age, simplifying your affairs is always a good thing. Start by completing the Net Worth Statement found in the Resources section. A net worth statement identifies your assets and your liabilities, both short- and long-term. It provides you with a good understanding of the health of your financial structure. By tracking your net worth over a number of years, you will be able to see the progress you are making in developing a financial structure during your Accumulation years. To complete your Net Worth Statement, list all of your assets and your liabilities. Add up all the asset items, such as RRSPs, saving accounts, and rental income, and all the liabilities, including mortgage, credit card debt, and car loans. To arrive at your net worth, subtract the...