A clear path to retirement requires a clear plan
If retirement is now on the horizon and no longer a distant goal, you'll want to make sure preparing for it is a priority. Using this time to continue to save and build your assets, while paying off outstanding debt can really make a difference. This is also the perfect time to put some serious thought into what your retirement will look like. The following is a subset of the BMO Retirement Checklist that will help you do just that.
Create your retirement picture.
- Set an approximate retirement date (even if it's simply the year you intend to retire), and discuss it with your spouse/partner and family.
Make saving a priority.
- Maximize your Registered Retirement Savings Plan (RSP) contribution and consider an RSP loan for making catch-up contributions. You will only be able to contribute to your RSP until you turn 71.
Consider your current and future expenses.
- Identify any new expenses you may have during retirement by planning for three stages of retirement:
- Early stage: retirees tend to spend more, as they do the things they put off when working and go out frequently.
- Middle stage: retirees tend to settle into a routine and spend more time with family.
- Later stage: retirees start thinking about estate planning issues. Health and care-giving issues may become more apparent and costly.
Determine where your money will come from during retirement.
- Create a snapshot of how much you own. Doing so will help you understand how your assets could help fund your future. For instance, an RSP can be a source of income during retirement while other accounts can pay for a child's education or a major purchase. Calculate your net worth by taking the total value of your assets and then subtracting any liabilities you may have, such as a mortgage, car lease or credit card debt.
Protect yourself and your loved ones.
- Review and update the beneficiary designations for RSPs, Registered Retirement Income Funds (RIFs), TFSAs, and insurance policies.
Want more information? For the full checklist and to create your retirement plan,
speak with a BMO investment professional at your local branch.
