Retirement planning today has taken on many new dimensions that never had to be considered by earlier generations. For one, people are living longer. A person who turns 65 today could be expected to live as many as 20 or 30 years in retirement as compared to a retiree in 1950 who lived, on average, an additional 15 years. Longer life spans have created a number of new issues that need to be taken into consideration when planning for retirement.
Lifetime Income Need
There actually is a lifetime after retirement and the need to be able to provide for a steady stream of income that cannot be outlived is more important than ever. With the prospect of paying for retirement needs for as many as 30 years, retirees need to be concerned with maintaining their cost-of-living.
Paying for Retirement
Retirees who have prepared for their retirement usually rely upon three main sources of income: Government pensions, individual or employer-sponsored pension plans, and their own savings or investments. Our retirement income planning process uses gap analysis to determine how much income needs to be generated from personal savings over and above that which is provided from government and private pensions.
Health Care Needs
Longer life spans can also translate into more health issues that arise in the process of aging. Provincial governments provide a safety net for healthcare, however, it may not provide the coverage needed especially in chronic illness cases. Planning for long-term care, in the event of a serious disability or chronic illness, is becoming a key element of retirement plans today.
Planning for the transfer of assets at death is a critical element of retirement planning especially if there are survivors who are dependent upon the assets for their financial security. Planning for estate transfer can be as simple as drafting a will, which is essential to ensure that assets are transferred according to the wishes of the decedent. Larger estates may be confronted with settlement costs and sizable death taxes which could force liquidation if the proper planning is not done.
For more information on retirement income needs and income sources, please contact us today.