According to Statistics Canada, only about 37% of eligible Canadians are covered by an employer-sponsored defined benefit pension plan. This means, most Canadians will need to plan for their own retirement.
Here are some of the benefits of planning your own retirement with your financial advisor:
- Clearer vision – Have you thought about what you want to do in retirement? When you share that vision with your advisor, they can help you understand what that may cost and how much you’ll need to save in order to achieve that vision.
- Greater flexibility – Planning your own retirement provides you greater flexibility than a defined benefit pension plan. Planning with an advisor enables you to use different account types (RRSPs, spousal RRSPs, TFSAs) and time contributions in a way that make the most sense for your personal circumstances. It also gives you greater flexibility to plan together with your partner.
- Ability to make an impact – Retirees with a strong sense of purpose are happier and healthier, more active and more socially engaged, and they live longer.* In the absence of a pension plan, you can determine how to save for your retirement that align with your purpose. You can choose to invest in companies that align to your values, and avoid companies that don’t.
- Balancing different goals – When you plan your retirement with an advisor, it gives you the ability to balance and prioritize multiple goals at once. Perhaps you want to consider giving to a charity or helping your adult child start a business.
- Long-term partner – Your advisor will partner with you throughout your life to help keep you on track by adjusting your strategy as life changes, as pandemics happen, and as your retirement vision evolves.
On the other hand
If you do not have a defined benefit pension plan, you may face the difficult decision of determining when and how to retire, since your “retirement date” is not set by a third party. It could also mean greater complexity in managing different sources of potential income, each with their own set of rules.
Planning your own retirement also could mean that you’ll need to be more diligent in selecting invest
Talk to your financial advisor today to help ensure you have a strategy to reach your retirement vision.
* Source: Edward Jones/Age Wave Four Pillars of the New Retirement study