Client Solutions

Nearing Retirement

 

Retirement is sneaking up on me. Am I really prepared? (60’s)

There comes a point when you realize that retirement is closer than you thought. When the calendar starts to say it’s almost time to start filling your days with things other than work. Congratulations. You’ve done well! And you’re about to enter the best years of your life.

There are a number of plans and decisions to be made as you get your financial house in order for retirement. Helping you to create a retirement plan that allows you to sleep at night with peace of mind and confidence is what we do best.

If you’re turning 71 this year, you will have to convert your RRSPs to an RRIF (or annuity) before the end of the year. Find out what the lower minimum withdrawals introduced in the 2015 Federal Budget means to you.

We take a look at the complete picture, balance all of the competing priorities - your retirement lifestyle, your business or personal assets, your need for income, your family’s special needs, your health –– and provide a practical approach to making your retirement dreams start to manifest themselves.

A winning financial game plan is not glamorous, it’s just common sense. For more information or to set up an appointment to discuss your dreams, please feel free to contact our office.

 

Case Studies

Goldie and Kurt – Portfolio Design

Referred by an accountant who knew of their situation, this couple came to us with multiple accounts from a variety of institutes, but not conscious diversity. What I sometimes refer to as “a collection of stuff” as opposed to a well-thought-out portfolio. As we went through the Discovery Meeting and reviewed each of their accounts, it became evident that they needed some comprehensive advice. They had some of their funds at the bank, some with a stockbroker and some with an investment salesperson, and yet they still didn’t have a comprehensive plan and they didn’t really understand what they had with each of the advisors or how it all fits together. They wanted to structure their pending retirement but didn’t know what to do.

We were able to consolidate their holdings and put together a comprehensive plan focused on generating retirement income. A plan that took into account each of their unique tax situations and the disparity in their income and sources of income and dovetailed them all together into an elegant retirement solution.

In their case, it wasn’t so much about the investments as about creating a comprehensive retirement income plan.

Madonna – retired 2 months prior to the fastest bear market in recorded history

Madonna was appropriately concerned about retirement years before the actual event.

  • What pension options will I be presented with?
  • How do I know which one to take?
  • When should I retire?
  • What if the markets tank just before I retire or worse, just as I retire?

These were just a few of her questions in the years leading up to retirement.

We created a plan for her, giving her comfort that despite expected continued market volatility she’d be well set. As she approached her expected retirement date, we started to ask about her plans more often: “Is it still your plan to retire X years from now?”

“I don’t know. Probably. Maybe.” It’s an answer that is actually quite common.

So, we started the process of making her portfolio more conservative with the ultimate goal of having a bare minimum of 5 years worth of required income in ultra-conservative investments. For example, all of her monthly additions started gong to more conservative investments, and periodically as markets had a good run, we would also shift a larger chunk to more conservative investments.

We left the TFSA a bit more growth-oriented with the understanding that she would continue to add to it rather than withdraw from it and that it would likely be the very last thing she ever cashed out. In fact, there was a high degree of likelihood that the TFSA would end up being passed on to someone else when she passed away.

By the time Madonna decided the pull the retirement trigger, we had her portfolio (with the exception of the TFSA) out of a growth allocation and positioned to create retirement income. When the time came, we explained all of the confusing pension options to her and helped her decide which to take. And sure enough within a few months of retirement, COVID hit the market big time.

We asked Madonna how she felt about her situation given the fact that she retired and faced an almost immediate bear market and here’s what she had to say:

Was I worried? Well yeah – maybe a little bit. But not really. We had a plan. You had warned me that things like this would happen periodically. And I’ve seen that to be true over all the years we worked together. So, with you looking after things, I guess I really wasn’t too concerned.

How was the communication? Great. Just like it always is. You were optimistic, but also realistic. You kept me informed as to what was going on, just like you always have. A big part was how you helped prepare me to accept ups and downs.

If I could go back would I change my retirement choices: date, income, plans? Not at all. We paid close attention to my retirement plans for the 5 years prior, so I was comfortable with my choices then and I am now as well.”

NOTE: The case studies above are based on true events. Names have been changed to protect privacy.