Retirement Planning: Your Questions Answered with Clarity and Purpose
As a financial planner, one of the most common things I hear from clients is, "I’m not sure where to start with retirement planning." I understand how overwhelming it can feel to think about retirement—especially when it seems so far away. But the truth is, the sooner you begin planning for your future, the more secure and empowered you’ll feel as you move toward the next phase of your life.
Here’s the good news: retirement planning doesn’t have to be complicated. It’s about taking thoughtful, intentional steps toward understanding your needs and goals. And guess what? Your retirement plan doesn’t have to look like anyone else’s. It’s deeply personal, and it’s yours to create. Together, let’s take a look at the most frequently asked questions I receive and walk through some simple, impactful steps that will help you feel more confident about the road ahead.
1. When Should I Retire?
This is a question I get asked often, and it’s a tricky one because there’s no one-size-fits-all answer. The truth is, your ideal retirement age depends on a number of factors, including your financial goals, health, and personal desires.
Some people dream of retiring in their 50s, while others prefer to work well into their 70s because they enjoy their careers or want to feel more financially secure before stopping full-time work.
What I always recommend: Don’t rush into a decision. Take time to think about your ideal retirement lifestyle, and from there, determine how much time you’ll need to save, invest, and prepare. The earlier you start, the more flexibility you’ll have to choose the timing that aligns with your vision for life after work.
2. How Much Will I Need to Save?
This is where many people get stuck—how much is enough? It’s a great question. The general rule of thumb is that you’ll need about 70% to 80% of your pre-retirement income to maintain your lifestyle in retirement.
But here's a more empowering thought: your retirement doesn’t have to mirror your working years. Many people find that their expenses decrease in retirement—maybe you’ve paid off your mortgage, the kids are out of the house, and you’re no longer spending as much on commuting or professional wardrobe.
Tip: When you’re estimating how much you’ll need, don’t forget to account for things like travel, healthcare, and hobbies. You deserve a fulfilling life in retirement, so plan for these joys.
3. What Will Be My Sources of Income?
This is one of the most critical parts of retirement planning. In Canada, there are three main income sources to rely on in retirement:
Government Income: The Canada Pension Plan (CPP) provides monthly payments based on your contributions during your working years. Old Age Security (OAS) and Guaranteed Income Supplement (GIS)can also help. These benefits can be a lifeline, especially if you’re in the lower income bracket.
Work-related Pension Plans: If you’ve contributed to a Registered Pension Plan (RPP) or RRSP during your working years, these accounts will play a key role in supporting you during retirement.
Personal Savings & Investments: This could include TFSA or RRSP savings, income from investments, or even proceeds from selling your home or downsizing. If you’ve invested in an RRSP, it will eventually convert into a Registered Retirement Income Fund (RRIF) by age 71, which can be a great source of retirement income.
The best part? These sources often work together. By coordinating these streams, you can ensure your retirement plan is well-rounded, sustainable, and aligned with your financial goals.
4. What Should I Be Doing Now to Prepare for Retirement?
Starting now, even if it feels like retirement is years away, can make a big difference. Here are some things to start doing:
Begin Saving and Investing Regularly: Even small contributions can grow significantly over time, thanks to the magic of compound interest.
Focus on Your Debt: Pay off high-interest debt as soon as possible to free up money for saving and investing.
Monitor and Adjust: Your financial situation and goals may evolve, so it's crucial to review your retirement plan regularly to make sure you’re on track.
Create a Vision for Your Retirement: Think about how you want to spend your time. Travel? Volunteering? Learning new skills? Understanding your goals will help you better plan how to achieve them.
5. Can I Retire Early?
Many people ask if it’s possible to retire early, and the short answer is: yes, it’s possible! With the right strategy, early retirement can be a reality. But it requires strategic planning, discipline, and prioritization. Some of my clients have achieved early retirement by:
Saving and investing aggressively in their 30s and 40s
Reducing lifestyle inflation (keeping spending low even as income rises)
Building multiple income streams, such as rental income or business ventures
The more you save and invest today, the earlier you can retire. But it’s important to understand the trade-offs. Early retirement often means you’ll need to be more intentional about budgeting and saving.
6. How Can a Financial Planner Help Me?
As a financial planner, my role is to help you see the bigger picture and make empowered financial decisions. I’ll help you:
Set realistic retirement goals that align with your lifestyle
Create a detailed financial plan and investment strategy
Determine how much money you’ll need in retirement
Optimize your sources of income to ensure a steady flow of funds
Adjust your plan as circumstances change
Retirement planning doesn’t have to be a daunting or stressful process. Together, we can turn your dreams into achievable milestones, providing you with the clarity and confidence to look forward to the next chapter of your life.
Final Thoughts
Retirement is a big step, but with the right planning, it can be an exciting and rewarding transition. It’s not just about money; it’s about having the freedom to live the life you want. The earlier you start planning, the better prepared you’ll be for the future. So, let’s work together to make sure that future is everything you’ve dreamed of.
If you have questions or want to start building your retirement plan, we are here to help. Book a consultation today and let’s begin shaping your financial future.