You have reached the end goal. Retirement arrives and the living is easy.
Wealth accumulation transforms to income generation, and you no longer have to worry about financial planning. Well, not exactly.
The investments that supply your short-term and long-term retirement income will still require oversight, as will assets you intend to become part of your estate. Then, there are the wild cards to deal with: changes in your health (or your spouse’s) and other unexpected situations.
Strategies for your estate
Estate planning begins simply enough by choosing your beneficiaries and determining the assets each receives. Then it gets interesting. We need to determine the most effective way, from a personal and tax perspective, to carry out the distribution of assets.
For example, you may wish to have control over one beneficiary’s inheritance, in which case, you will need to establish a testamentary trust. Or if you’re handing down vacation property to your children, you might need a strategy to cover the tax on capital gains. Developing the right strategy for your estate is one area where an experienced financial advisor can work with you to simplify the complex and create or adjust your estate plan to target your changing needs.
Health matters
Hopefully, you’ll live a long and healthy life, but you should plan for the possibility of requiring healthcare in later years. According to the Statistics Canada 2016 census, 32% of Canadians age 85 and over live in a special care facility.1
Your health becomes a financial planning matter if you want quality care. An extended stay in a private healthcare residence may cost hundreds of thousands of dollars. The cost of full-time private nursing care at home is comparable.
Potential solutions include long-term care insurance, self-insuring or using a combination. Your Advisor can review the pros and cons of each with you.
Expect the unexpected
Your retirement could easily span two or three decades, and a lot can happen in that time. Your favourite grandchild might want to launch a promising business venture and be looking for start-up capital. Or maybe a family member has a child with special needs who requires life-long care. You might even surprise yourself, by deciding that you want to purchase a villa in Italy.
Funds for unexpected situations are best kept separate from assets for your estate, health care and retirement income.
Retirement brings new investment objectives and new financial choices that are different for everyone.
We can help with your retirement goals to support your life goals. Call our office today and let’s start building your investment strategy and financial plan.
1 https://www12.statcan.gc.ca/census-recensement/2016/as-sa/98-200-x/2016004/98-200-x2016004-eng.cfm