Life After Work: Plan for the type of lifestyle you want
Originally published in MoneySense
Plan for the type of lifestyle you want when you retire
Everyone knows they should save for retirement, but there is more to it than simply building up a pile of cash. Here are a few things to consider when planning a comfortable retirement.
Determine the lifestyle you want in retirement. "If you're married, have a conversation with your spouse," says Sheila Munch, a certified financial planner with Durham Financial in Oshawa, Ont. Do you want to travel, spend time with family or buy an RV? "Visualizing your goals will help you determine how much you'll need to save."
Set your time horizon. Determine how much time you have until you reach your targeted retirement age. This will tell you how long you have to build your retirement savings.
Determine how much you need to save. Will you receive guaranteed income from your company's pension plan? How much will you receive in government benefits? Do you know how much income you'll need to generate from your own investments (including RRSPs)? Knowing your potential income sources will help you identify any shortfalls. An adviser can help you bridge any gap in your retirement plan.
Know your risk tolerance. Once you know how much you need to save you need to make some decisions about where you want to invest that money. Are you the conservative type? Or do you like to take risks? If you don't know, an adviser can help you make the right investment decisions so you can sleep at night.