By Sarah Twomey
Over the last several years, boomers who could retire are choosing instead to keep working. Some people prefer to stay active and engaged by tackling new challenges. But for others, this trend is truly financial: they either can't afford retirement or they need more time to get back on track financially.
"Retired people today are living longer, more dynamic lives. So it's important to have a solid financial plan for retirement," said Michael Aziz, regional vice-president of sales investment products at Desjardins Financial Security.
"Today, mature workers are often working well into their 80s. This provides them with a great opportunity to solidify their retirement plans, ensuring that their transition is financially sound."
Three easy steps
Since retirement can last up to 30 years for the average retiree, following these easy steps will help boomers become better prepared:
1. Estate planning: Preparing an estate plan is an important way to ensure that family and beneficiaries are taken care of financially. This plan protects savings against inheritance and probate taxes.
2. Fine tuning the retirement income strategy: At the age of 71, retirees must collapse their RSP accounts into a Registered Retirement Income Fund (RRIF). Since asset preservation it critical, it's very important to carefully select a RRIF product that offers growth and flexibility.
3. Worry-free retirement funds: The Guaranteed Lifetime Withdrawal Benefit (GLWB) product pays the contract holder a guaranteed and predictable retirement income for life, based on the age at which the first withdrawal is made. This means that investors have the flexibility to choose when withdrawals are made in order to maximize the guaranteed income they would like to receive.
"By implementing these essential strategies, they will find that their transition into retirement will be built on a solid financial foundation," said Aziz. "And this truly is the secret to a happy and prosperous future."
– News Canada