Take a holistic approach to your retirement goals

 A young family reviewing retirement goals with their financial advisor.

Retirement is a major life transition and you want all of your hard work to pay off once you make the leap from working full time into retirement. There are many factors to consider when planning for the day when you aren't working 9 to 5 and that includes lifestyle, personal goals and investments. You can start by working with a financial advisor and developing a financial strategy designed to help meet your goals. This can help make the transition to retirement much smoother.

Here are five factors to consider as you make your plan.

  1. Define what retirement security means to you
    Everyone has different ideas about what a secure retirement looks like. You might feel that true security means being able to remain in your current home and live independently throughout your life. Or you might feel secure if you know you can afford to travel, help your grown children or grandchildren financially. Once you’ve identified your personal vision of retirement security, you should be able to determine the financial resources you’ll need to reach your desired outcome.
  2. Start saving early
    If retirement is still a long way off, time is on your side. Not only does starting early give you more time to save, it also increases the power of compounding (generating earnings from previous earnings) investment returns. If you are closer to retirement, remember it's never too late to start thinking about your future. Now is the time to get specific about your desired lifestyle, spending and sources of income in retirement. Keep in mind, longer life expectancy will inevitably change how you live and plan your savings and retirement goals. Do you know the average life expectancy for a 65-year-old? Consider this:
    • The life expectancy at age 65 for men is 19.3 years.*
    • The life expectancy at age 65 for women is 22.1 years.*
        While the good news is that you could spend a considerable amount of time in retirement, your portfolio must be able to provide for your needs today and throughout your retirement years. And the possibility of more years in retirement is making some investors nervous about outliving their retirement savings.
  3. Work with a Financial Advisor
    Good preparation means taking a holistic approach, and that’s where your Edward Jones advisor can help. Your advisor will work with you to understand what's important to you. They will use an established process to help you build personalized strategies to achieve your goals and will partner together throughout your life to keep you on track.
    See our 5-step process to see how these answers form a foundation for an ongoing and evolving conversation between you and your advisor.
  4. Develop a Financial Strategy to Meet Your Goals
    To achieve your idea of a secure retirement, you can’t just hope for the best – you need to create a comprehensive financial strategy tailored to your personal goals, accounting for your various sources of retirement income (pensions, employer-sponsored retirement plans), your investment portfolio and so on. You need to know how much you can expect from these sources, and how you can strengthen them. Your Edward Jones financial advisor will work with you to develop an investment strategy that works for you. We will spend the time getting to know you. The approach we will work through together should be as individual as you are. We will follow an established process that starts with asking, "What's important to you?" And then listen to you. Really listen.

    After we understand what's important to you and why, together we build a strategy tailored just for you based on your financial goals and needs.

    Your retirement goals may be competing with many other financial needs – both expected and unexpected – that you’ll potentially need to save for or protect against. For example, you may be saving to help pay for a child’s or grandchild’s education. Or, you may need to protect your plan for your family in the case of a disability, critical illness, job loss, or death. That’s why it’s important to develop a comprehensive financial strategy. While many investors have recognized that a Registered Retirement Savings Plan (RRSP) can be a powerful retirement savings tool, it’s only one part of helping you reach your financial goals.
  5. Establish an appropriate withdrawal strategy
    Your retirement security isn’t just based on how much you’ve built up before you retire – it also depends on how you manage your assets and investment income during retirement. As you begin to take out money from your RRSPs and other investment accounts, you need to establish a withdrawal rate appropriate for your age, retirement lifestyle and asset level. If you take out too much each year, you risk outliving your resources, but if you withdraw too little, you might be shortchanging yourself on your quality of life. Work with a financial professional, who can review your entire situation – income, expenses and so on – and recommend an appropriate annual withdrawal figure.

We can help

While an RRSP is a good start, it's only part of the picture. At Edward Jones, we can help you build a comprehensive strategy to help you reach your long-term financial goals. Contact your local Edward Jones advisor about a financial strategy that makes sense for you.

Important Information:

*Statistics Canada, Report on the Demographic Situation in Canada. Mortality: Overview, 2014 to 2016