Three issues that can affect your finances during and after your retirement
People tend to have different ideas about how they would like to enjoy retirement. Some want to travel, while others plan to do volunteer work or start a new career. Regardless of your vision of retirement, there are important issues to consider beyond how you'll spend your sunset years. Here is a look at some of them.
If you're like most people, your focus is on accumulating assets, not passing them on to others. If you don't take an active role in planning for the eventual distribution of your assets, however, a large portion of your estate may be eaten up by taxes. Almost everyone - young and old, experienced investors and those just starting out - should have an estate plan that clearly spells out where his or her assets will go. Every province has a set of laws that governs the distribution of an individual's assets if he or she dies without leaving a will. Trouble is, under these laws, the assets may not go to the people you intended, in the manner that you want. But a little time spent planning your estate can ensure that your wishes, not a court's, are carried out. A qualified attorney and financial planner can help you develop a thoughtful plan to secure your assets.
A life insurance policy can be an important safety net for your loved ones. You may not like to think about it, but after your death there may be bills to be paid, such as a mortgage, children's education, and food and clothing for your dependents. And don't forget funeral costs and medical bills. No one wants to burden his or her family with this financial responsibility. By helping to replace lost income, pay off debts and cover expenses, life insurance can go some way to ensure your family's financial security.
There was a time when the retiree population consisted of only one generation. Today, advances in medicine have not only lengthened our lives, but have stretched out our retirement years. According to Statistics Canada, the average woman retiring today at 65 will live another 18 years. The average man will live another 13 years. Today's 40- to 55-year-olds can expect to live even longer. We are in an era when more and more families have two retired generations, and younger retirees are finding they need to care for their elderly parents. The added financial burden can be enormous. You may want to consider researching long-term health care insurance and facilities to lend a helping hand.
There is more to planning for retirement than saving enough money to meet your expenses. But by doing your homework beforehand, you'll have a better handle on what to expect when your retirement day finally arrives.