Retirement Planning: How to Take Control of Your Finances for the Future!

Retirement Planning

When you first enter the work-force retirement can seem like a lifetime away and it may feel like you have plenty of time to prepare for it. The truth is, it is never too early to start planning for your retirement. It will be here before you know it. What you do today, will affect your financial health tomorrow. For those who have yet to start planning, have no fear, it’s never too late to start planning for your retirement either! This is your guide to retirement planning that prepares you for a prosperous financial future!

Retirement Planning 101: Lower Your Investment Fees

It is easy to not think much of investment fees when they seem to make up such a small percentage of your portfolio. However, over the years these fees can add up. It pays to pay attention to your investment fees and put in the time to minimize them as much as possible. Make sure you do your research when you first begin an investment portfolio. Shop around to keep your management fees to a minimum. Do not fall prey to add-on fees, and sales charges. Sticking with a major online brokerage can help you steer clear of add-on fees and high rates.

Many investors are tempted to buy and sell investments aggressively and frequently in an attempt to outwit the market. This is a very hard thing to do and rarely works to the investor’s advantage. Instead, the approach of buy and hold tends to work better and will reduce the investment fees you incur.

Invest With a Plan

Investing and saving is great for retirement, but could be useless without a plan. First, you need to have an idea of how much you will need for retirement. Identify what you expect your sources of income to be during retirement. Most people find when they sit down and crunch the numbers, that they need more money during retirement than they originally anticipated. Going into retirement with a long-term financial plan will set you up for sound financial retirement.

Set Aside a Healthy Emergency Fund

Financial emergencies can pop up in the blink of an eye. These can occur from the sudden loss of a job or a serious medical condition. More and more people these days do not have an emergency fund set up. This can cause people to make poor financial decisions such as running up credit card debts to cover expenses. These are often debts that individuals never recover from. Experts recommend that individuals have enough money in an emergency fund to cover at least 3 to 6 months of their living expenses.

Maximizing Your Canadian Pension Plan

The Canadian Pension Plan (CPP) is calculated based on how long you have contributed to the plan and how much you’ve put into it. You can draw your pension as early as 60 years of age. However, if you choose to do so, you will receive 0.5 percent less each month until you turn 65 years of age. This may not seem like you will lose a lot of money, but the numbers can really add up. This is especially true if you draw your pension at the earliest age possible. It may be worth it to wait the five additional years in order to receive the maximum amount of money from your CPP.

Pay Off All Debts

More people are in debt now more than ever. Common debts include credit cards, mortgages, vehicles, medical bills, and student loans. Although it may seem hopeless to get out of debt before retirement, you will thank yourself for working hard to eliminate as much debt as possible before you do retire. The ideal scenario is to pay off all of your debts before you enter into retirement. By paying off debts, you reduce your fixed living expenses which relieve financial stresses and affords you the opportunity to do the things you’ve always wanted to do, such as travel or relocate.

Create a Realistic Budget

No matter the stage in life, budgeting is important. This is true during retirement as well. Calculating your expenses versus your income is important. Make a budget and stick with it. Understand what portion of your income must go to living expenses and how much you can spend on extracurricular activities. This will ensure that you do not find yourself in a financial bind and struggling to make ends meet during what should be the most relaxing stage of your life. You’ve worked hard, raised your family, and now it’s time to relax and enjoy the fruits of your labor. A budget will ensure you’re able to do that.

Understanding Old Age Security Program

The Old Age Security Program (OAS) is available to eligible individuals who are at least 65 years old. This is a monthly payment that is derived from general tax revenues of the Canadian government. However, there are three additional benefits for which you might qualify. If you are a Canadian resident with a low income you may qualify for the Guaranteed Income Supplement, which is a non-taxable addition to your OAS pension. If you are widowed and are between the ages of 60 and 64 you might be eligible for the benefit. If you are between the ages of 60 and 64 and your spouse is receiving the OAS pension as well as the guaranteed supplemental income, you might be eligible as well. Don’t miss out on additional benefits you may be eligible for.

Retirement Planning for a Sound Financial Future

Everyone dreams of a relaxing and enjoyable retirement without the need to worry about money. This won’t just fall into your lap. BP Group Solutions understand the importance of retirement planning. Navigating the financial world and understanding your options can seem daunting. This is why our experts are here to guide you through the process and help you understand all of your options and what is best for you, your family, and your future. Our expert team will answer any questions you have and help you enjoy the retirement you’ve always dreamed of. Focus on what’s important today and let us worry about your financial future. Contact us today and book an appointment to talk to our certified financial planners!