Updated on February 13, 2024
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11 Smart Things to Do Before Retirement in Canada
Retirement no longer feels like a distant concept, especially when it feels like you’ve only just begun your career. While it might appear daunting, careful preparation can lead you into this next chapter of life with comfort and peace of mind.
As you prepare for retirement, there’s likely a lot to finalize with your advisor and attend to, but it’s important not to lose sight of how wonderful this transition should be. That’s why in this post, we’ve gathered 11 Smart Things to Do Before Retirement in Canada.
Average Money Needed to Retire in Canada
Just as there’s no set rule for when to retire, there’s no precise amount of money required. Factors like your desired lifestyle, location, and activities play significant roles. Assessing the portion of your income you aim to replace in retirement can be beneficial.
Based on the assumption that your expenses will be lower than your pre-retirement income and following the 70% guideline, the optimal amount would be at least $70,000 per year. It’s projected that if you intend to retire at age 65, you’ll need to accumulate around $1,750,000.
Every Seniors Should Know These 11 Smart Things
1. Discover your retirement “type.”
Imagining retirement can be challenging when it’s decades away. However, knowing that careful planning now will secure a comfortable nest egg for your post-working years, you diligently focus on your work. Experts suggest that cultivating self-awareness today may lead to fewer surprises when you encounter your future self.
2. Think about your retirement funds
As retirement approaches, both your income and expenses may fluctuate. It’s essential to base your new spending budget on your anticipated monthly retirement income. Expenses like utilities, travel, healthcare, and entertainment might increase during retirement. Take into account both your monthly and annual budgets when crafting your spending plan.
3. Examine your sources of revenue
While we’re employed, we strive to save diligently for our retirement years. However, once retired, the dynamic shifts. It’s crucial to identify your sources of retirement income, which may include employer and government pensions, as well as registered and non-registered accounts, along with Tax-Free Savings Accounts (TFSAs).
4. Guaranteeing Stability of finances
By monitoring your expenses closely, you may uncover debts or expenditures that can be reduced or eliminated, giving you a clearer picture of your potential retirement spending. Additionally, downsizing might appear appealing, especially given the recent significant increases in property prices.
5. Evaluate your requirements for insurance
As you grow older, your insurance requirements are likely to change. With fewer obligations and dependents, you may find that you don’t need as much life insurance coverage. However, maintaining coverage for emergencies such as home or vehicle damage is still advisable. If you were previously covered by a workplace insurance plan, it’s wise to explore the cost of coverage independently.
6. Submit a claim for government assistance
Waiting until the last minute to apply for government assistance could result in delayed payments. To ensure your Canada Pension Plan (CPP) benefits are received on schedule, it’s essential to submit your application nine months before your planned retirement. Additionally, make sure your tax filings are up to date.
7. Go over your powers of attorney and will
If you’re nearing retirement, it may be necessary to update your will. A current, legally valid will ensures that your estate is distributed according to your wishes. Furthermore, settling your affairs through a will can alleviate the legal and administrative burden on your family.
8. Clear your obligations or debts
Paying off your debt before retirement is advisable because every dollar you owe reduces your retirement income and affects your quality of life. Accumulated interest on your debts will diminish the amount of money available to you in retirement.
9. Putting wellbeingness and health first
Retirement presents an excellent opportunity to prioritize your health and fitness. With more free time, you can engage in athletic activities or exercise regularly. Staying active is crucial at all stages of life, but particularly during retirement.
10. Discussing arrangements with your partner
To ensure you both prepare and make the most of your retirement, it’s crucial to have open discussions about your individual retirement goals.
11. Find the greatest retirement location possible
Victoria, Ontario, and British Columbia are renowned for their temperate climates, making them top choices for retirement destinations. However, affordability is a consideration for many, so it’s important to evaluate other factors like average salary, crime rate, housing costs, and access to healthcare when choosing a retirement location.
Concluding Words
As you embark on this new chapter of your life, you have the opportunity to prioritize things you may not have had time for during your working years. A retiree’s life can and should be shaped by their own choices and desires.
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