Winter is here again – which may make you wish you were somewhere else. You might be thinking how pleasant it would be to move to a warmer climate for the season. If you are like many Canadians at this time of year you are flocking south to avoid the cold winter weather. Whether you are just making your preparations or have already taken flight don't forget to cross these important items off your list.
If heading to a warmer climate sounds appealing there are a few things you should keep in mind as you start planning:
- Start planning early - As with any travel plan, you should consider the financial implications of your decision ahead of time, and then plan accordingly. The further ahead you plan, the more options you’re likely to have when you embark on the snowbird life.
- Review income sources - As your prepare for retirement, you’ll need to review all your sources of retirement income – employer-sponsored pension plans, your Registered Retirement Savings Plan (RRSP), your Tax-Free Savings Account (TFSA), and so on – to determine if you’ll have enough money available for your yearly snowbird trips without jeopardizing your retirement lifestyle. Your calculations will depend on what sort of snowbird existence you have in mind. Do you want to buy a second home or just rent? Will you be gone just a few weeks each year or several months? To ensure a successful snowbird experience, you’ll need to clearly identify your goals and create a strategy for achieving them.
If you have reached a point where you can indeed make your snowbird dream a reality, and you are ready to pack your bags, you’ll need to take action on some practical matters, such as these:
- Secure your home - If you have a security system, make sure it’s armed and working properly. Stop your newspapers and magazines, forward your mail, ask your neighbours to remove any stray papers, flyers and advertisements from your porch or entryway, and arrange to have your snow shoveled.
- Notify your bank - To fight theft, the fraud departments of many banks are getting more aggressive in spotting and denying unusual charges. That’s why it’s important to give your bank your temporary address and contact information before you leave. By doing so, you can reduce the risk of your account being frozen temporarily if your financial institution can’t reach you with questions about charges from an unexpected location. You also might find it useful to open a bank account at your snowbird location.
- Pay your bills - If you already pay all your bills automatically through bank authorizations, you may not have to do anything when you leave. But if you still pay some bills the old-fashioned way, with cheques and envelopes, include these bills in your forwarded mail.
- Track your investments - You can probably track the progress of your investments online, and it’s a good idea to do so, just as you would at your permanent address. Even if you’re only gone a couple of months, you may need to make some investment moves, so stay on top of your accounts and contact your investment professional, as needed. As always, don’t overreact to sudden market swings – ideally, you’ve got long-term strategies in place that can serve your needs in most investment environments.
The purpose of developing a financial retirement strategy is to ensure that you can have the lifestyle you want. Talking with your financial advisor can help get you on the right track. The life of a snowbird can be a pleasant one and a little planning can make your time more enjoyable. So take the necessary steps before you leave – and enjoy your days in the sun.
We can help
At Edward Jones, we can help you achieve your financial goals. Contact your local Edward Jones advisor about a financial strategy that makes sense for you.