Planning Your Retirement Planning Your Retirement with Confidencewith Confidence

Who is a Pre-Retiree?Who is a Pre-Retiree?

• Pre-retirees – include any full or part-time member of the workforce who does not consider themselves retired.

• Retirement planning can be thought of as a four stage process:

o Early Career – First five years of employment.

o Mid-Career – Period between first and last five years of employment.

o Near Retirement – Last five years of employment.

o Retirement – Period after leaving employment.

Where Do I Want To Be When I Retire?Where Do I Want To Be When I Retire?• While retirement might not be at the forefront of your concerns, it

should still be a consideration.

• Financial decisions made at this point in your life can have a major impact in later stages of your retirement planning.

• Early in your career, you possess the most valuable resource available in retirement planning – time.

• Identify and make use of retirement planning resources. Educate yourself on how to be a wise investor and be one step closer to your retirement goals.

Start Smart! – Important Questions To Ask.Start Smart! – Important Questions To Ask.

1. Do I feel confident in the management of my income and expenses?

2. What position do I want to be in financially when I retire?

3. Does the job I have provide enough income, as well as health and retirement benefits, for my needs?

4. Do I understand basic investment principles that will help me make wise investment decisions while planning for my retirement?

Smart Moves – Follow These TipsSmart Moves – Follow These Tips1. Estimate the amount of money you think you will need in retirement.

2. Consider having a professional help you form a retirement plan that works for you and start investing now.

3. Ask if your employer offers a retirement and/or health benefits program.

4. Manage your “wants” and “needs” when making purchases. Learn how to acquire assets responsibly using credit, and keep your debt in check.

5. Understand basic investment principles, such as compound interest, risk and reward and diversification.

6. Learn about fraud prevention and how to avoid investment scams.

Is This Where I Want To Be?Is This Where I Want To Be?

• In addition to planning for your own retirement, you may also find you are part of the “Sandwich Generation”, a demographic “caught in the middle” of raising children and caring for an elderly loved one.

• As retirement approaches, your level of planning and types of investment decisions may have left you with fewer savings than you had envisioned.

• Uncertain economic conditions may present the need to plan for contingencies in the event of layoffs or wage freezes.

The Balancing Act – Some Considerations: The Balancing Act – Some Considerations:

1. Ask yourself “Is this where I want to be?” or “Did I think I would be farther along financially by now?”

2. Define what retirement means to you.

3. Strive to achieve financial balance in the lifestyle you want now with investing for the retirement that is yet to come.

4. Review your investment strategy for your retirement savings. Are you on track to meet your retirement goals?

Smart Moves – Follow These Tips Smart Moves – Follow These Tips

1. Use additional income from raises or elimination of debt to add to retirement assets.

2. Do a reality check. Identify your sources of retirement income: pension, retirement plan, social security, rental property income etc.  Assume you will need as much in retirement as you do now.

3. Look at your estate planning. Do you have long term care insurance, life insurance or medical insurance? Will you be able to afford these or benefit from these when you retire?

4. Evaluate your investment strategy. Do you need to make adjustments in your portfolio to help meet your retirement goals?

Am I Where I Thought I Would Be?Am I Where I Thought I Would Be?

• In the third phase of planning for your retirement you are in the final years of your career.

• You are likely at the peak of your earning capacity and enjoying a lifestyle you would like to continue into retirement.

• If faced with insufficient retirement funds, it can be difficult to feel confident.

• With five to ten years until retirement, it’s time to seriously evaluate your current retirement plan.

Facing Your Retirement – Financial Goals:Facing Your Retirement – Financial Goals:

1. Review current budget and evaluate investment strategy. Are there adjustments to be made in your portfolio to help meet your retirement goals?

2. Consider what you might do if you were laid off from your job or presented with early retirement options.

3. Explore the possibility of part-time or alternative employment options during retirement to supplement your retirement savings.

Smart Moves – Take ActionSmart Moves – Take Action

1. Review your investment portfolio and assets to address your changing tolerance for risk.

2. Anticipate tax implications in retirement.

3. Revisit your retirement plan and expectations for retirement lifestyle and life expectancy. It is very possible that if you retire at 60 you could live another 30 years.

4. Know how to protect yourself from investment fraud.

Am I Finished With My Retirement Planning?Am I Finished With My Retirement Planning?

• In this fourth phase of retirement planning, you will want to keep peace of mind, retain your financial security and independence, and decide what, if any, type of financial legacy you want to leave.

• Although you may have now reached retirement, it is wise to continue to evaluate your current finances and investments to determine if you have planned appropriately.

Keep it on Track – Considerations:Keep it on Track – Considerations:

1. Look at how inflation might affect your cost of living over time. Does your investment strategy account for increased expenses?

2. Be aware of “burn rate” or how quickly you will use funds available from your retirement assets.

3. Be aware of potential investment scams and fraud as you may become a target for elder abuse or fraudulent investments.

4. Even in retirement you may still need an investment plan that will provide growth as well as preserve your retirement funds.

Smart Moves – Follow These TipsSmart Moves – Follow These Tips

1. Continue to research the terms and conditions on your retirement accounts. (e.g. make sure you understand “roll-over” requirements and restrictions).

2. Continue to review your investment account statements. Understand how your funds are being invested.

3. Assess standard of living costs, risk tolerance and asset allocation.

4. Understand tax implications in retirement, such as withdrawing funds.

5. Avoid investment fraud. Learn how to identify predatory scams and remember: there is no such thing as a free lunch!

Resources:Resources:Ballpark E$timate Worksheet - Employee Benefit Research Institute www.choosetosave.org/ballpark/Helps approximate how much you need to save to fund comfortable retirement. Uses easy to understand language and mathematics.

Decumulation: Understanding Your Retirement Paycheck - National Endowment for Financial Education www.decumulation.orgProvides tips and information to help optimize your retirement paycheck by making wise decisions.

Retirement Confidence Survey (2009) - Employee Benefit Research Institute www.ebri.org/surveys/rcs/2009Breaks down investors by age groups and looks at expected retirement, working in retirement and meeting expenses in retirement.

Retirement Estimator -   Social Security Administrators www.ssa.gov/planners/calculators.htmHelps Americans calculate Social Security benefits going into retirement.

Resources:Resources:Retirement Income Calculator – Service Canadahttps://srv111.services.gc.ca/INT_01.aspx?lang=eTakes you step by step through an estimate of the ongoing income Canadians may receive throughout retirement.

Retirement Planning – U.S. Financial Literacy and Education Commission www.mymoney.gov/retirement.shtmlContains tips and resources on a variety of retirement planning considerations.

Taking the Mystery out of Retirement – United States Department of Labor www.dol.gov/ebsa/publications/nearretirement.htmlOutlines information and resources on how to plan for a lifetime.

Top 10 Ways to Prepare for Retirement – United States Department of Laborwww.dol.gov/ebsa/publications/10_ways_to_prepare.htmlOffers tips on preparing for retirement.

Questions?Questions?