Q & A with Cyndy & Sarah – Retirement Planning

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by Cyndy Batchelor, Bcom, Financial Advisor, O’Farrell Financial Services

I often get questions about retirement planning. The most frequently asked question is “do I have enough money to retire?” This question cannot be answered with a simple yes or no, as everyone has different spending habits, time horizons, risk and investment goals, and estate planning ideas. As we approach the New Year, I want to bring this topic to the forefront of your minds. Here are some questions that you should be considering.

Q: When do I want to retire?
A: Sometimes, this is based on a pension (i.e. 25 or 30 years of service), and sometimes this is based on a savings goal (I need to save $1Million). Either way, you should be sitting down with your Advisor to review your plan on an annual basis. Life does not always go as planned – there are ways to ensure that your goals can be met, even when life throws you a curveball. The earlier you plan, the more cost effective it is to add Critical Illness, Disability, and Life Insurance options to your overall plan.

Q: What Is my Retirement Spending Goal?
A: Anything you want! Don’t forget that this is individualized to you, and you need to make an honest budget. If you retire early, you may want to travel more, and this can be costly. As you get older, you may have health concerns that consume your income/savings. Expect to spend about the same amount in retirement as you do while you are working – it is just going to be allocated differently.

Q: What is my risk tolerance, and what are my investment objectives?
A: Again, you need to be comfortable with your investments, but you also need to be realistic with your expectations. A proper portfolio allocation that balances your risk aversion and return objectives is very important. It is also important that you don’t micro-manage your portfolio daily, or even monthly. It is time in the market, not timing the market. Your retirement is likely going to last 20-25 years – stay the course, meet with your Advisor, review your plan and investment strategy, and perform the recommended rebalancing.

Q: What are my Estate Objectives?
A: There are a few things to consider when we look beyond your retirement to your Estate. You might be someone who wants your last dollar to be spent the day you die, but, more than likely, you have an objective for your Estate – protecting your loved ones, and/or donating to a charitable cause. In order to minimize your taxes in both your lifetime and at your death, while ensuring your wishes are met, Estate Planning needs to be considered in your Retirement Planning.

If you are looking for more information about retirement planning, contact your financial advisor.

We welcome your questions, so please reach out! See our ad in this week’s North Dundas Times and follow us on Facebook @OFarrellFinancialServicesInc.

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