As you approach retirement, you may be faced with many questions. “Am I financially prepared for retirement?” might be the biggest one. But it leads to many smaller ones. Here are a few questions to consider to help better prepare yourself financially for retirement.
Do you want to have a part-time job?
Did you know that 1 in 5 Canadians over 65 has a job?1 Even if you retire from your career, you may want to continue working part time, either to fill your days or for the extra money.
Is travel in your retirement future?
For many, having time to travel more is one of the big allures of retirement. Consider how much you may want to travel, or even if you want to become a snowbird and live down south during the winter.
Where do you want to live?
There are so many options here: stay in your current home with or without a mortgage, downsize and use the profits toward your retirement, move to a retirement community (which could require some serious budgeting at a cost of $3,000 to $7,000 per month for basic care2), or you could enjoy the snowbird life.
What activities will you enjoy?
It’s so important to keep your body and mind active in retirement. Give some thought to the activities you want to make sure you can afford when you’re retired. Do you want to golf regularly? What about a live theatre subscription or even just the occasional movie? If your “fun” budget is going to be tight, you might look into volunteering or community events.
Do you have trouble saving for retirement?
Explore the various pensions available from the Canadian government, like the Canada Pension Plan, Old Age Security and the Guaranteed Income Supplement. They could bring in nearly $24,000 per year per person.3
Are you prepared for health care costs?
Try to have a budget for medications, treatments, therapy or equipment that you might need down the road. Or you can budget for the premiums of a health plan that can help you cover some of those costs.
What if something happens to you?
It’s tough to consider, but if you were no longer around, you would want to make sure that your spouse, children or grandchildren have some financial protection. A great way to do that could be a life insurance product like CAA Guaranteed Issue Life Insurance, which you can learn more about and get a quote here.
Once you’ve answered these questions, hopefully your retirement financial planning will be a little bit easier.
1 Statistics Canada, “Working seniors in Canada,” November 29, 2017.
2 financialpost.com, “Here’s what it costs to live in a retirement home – and the bottom line is less than you might think,” March 13, 2019.
3 moneysense.ca, “Planning for retirement with little or no savings to draw on,” July 9, 2020.