Q – I am getting set to retire this September. I’ve held the same job at an automotive manufacturer for 20 years. Lately I have begun to worry about the amount of savings I have for the future. I am now 70 years old and have set financial parameters in my financial plan until I am 90. I don’t want to run out of money. Do I need to look at extending my plan past 90? – Robert L., Vaughan, Ontario
A – If you are in good health, then you may want to rework your plan to the age of 100. Yes, I know that sounds like an unattainable age, but according to the demographic trends identified in the recent census, Canada could have more than 17,000 centenarians by 2031. You may be one of the lucky few men who live past age 90, even to 100, so it is important to plan for a long life while you are still able to make strategic investment and spending choices.
The fact is that with age, our health declines and healthcare costs rise. You can never tell if you will need even more extensive healthcare later in life. You are at a point in the planning stage where you are shifting away from the accumulation of a retirement nest-egg to generating income and preserving capital. Your investment asset choices should reflect this change. And there are a surprising number of investment options, over and above annuities, that have the potential to provide you with income for life.
If you have not already met with your financial advisor, now is the time. Risk reduction to protect your wealth is very important at this stage. Rework your plan to account for a longer lifespan, and weigh it against your current plan. Once you know the numbers, you can accurately assess whether you have saved enough for your golden years and decide on your income-producing options. – R.T.
Robyn Thompson, CFP, is the founder of Castlemark Wealth Management, a boutique financial advisory firm, specializing in customized financial, investment, insurance, and retirement planning. She appears regularly as a financial planning expert on CityNews Channel. Phone 416-828-7159 or email today to firstname.lastname@example.org for a no-obligation, no-charge Castlemark Integrity Financial Planning consultation.
Got a question on investments, financial planning, or portfolio management? Click here.