Retirement planning is one of the most rewarding tasks you can do for yourself. It’s advisable to start early and discard the idea of waiting for the last day on the job. People who plan early are likely to be in a position where they can ensure financial stability in retirement.
Retirement can be a difficult phase of life if entered unprepared. Therefore, take steps to manage your financial well being. The following are 5 important financial tasks that will help you make your retirement the best part of your life:
1. Define your retirement
Portraying a picture of your retirement in your mind is a good start. A clear picture of how you want your retirement years to be will streamline the planning process. Do you want to retire early? How many years do you have before you retire? Do you want to work part-time after retiring? Where and how do you want to spend your retirement? What are your retirement goals? You should ask these questions to make that picture more clear.
2. Pay off debt before retirement
It’s important to sort out how to pay off all your debt before retirement or before saving for retirement. Plan to retire with zero or little debt. A strategic approach would be to start paying off high-interest debt and keep paying off the debt down the line. Debt can be a stress in retirement and you certainly don’t want to have a stressful retirement. If you’re not sure how to deal with your financial liabilities and complexities, talk to a qualified financial planner for objective guidance.
3. Start tax planning
Reducing your tax bill should be a priority no matter whether you’re planning for retirement or not. However, from a retirement perspective, you should make efforts to reduce your tax burden. In the tax planning process, consider investing in registered retirement accounts.
While RRSP is a great investment vehicle for people who want to save for retirement, you can use this plan as a tax-saving tool. Consider using a savings plan that allows income splitting. For example, keeping income-producing assets in a registered plan such as TFSA will help you avoid paying taxes on income earned at your marginal tax rate.
Analyze your insurance
Insurance can play a pivotal role in developing a stable retirement plan. Review your insurance just to make sure you’re adequately covered. Old age comes with a number of health and financial worries. To make life easier in the last phase of your retirement, consider signing up for life insurance, long-term care insurance, critical illness insurance, etc. If you’re not sure what insurance product would be ideal for you, consult a professional financial planner.
Related: Calculate your retirement potential
Have an estate plan in place
Do you have an updated Will? If not, start preparing a Will that describes how your estate should be dispersed after you die. Planning your estate before retirement can save your family a lot of stress. If you already have prepared the Will, don’t forget to update it after every major event in your life.
About Kewcorp Financial
Kewcorp Financial is a trusted source for financial guidance. As a highly qualified and experienced team of financial planners in Edmonton, we help individuals achieve their retirement and financial goals. Whether you need to prepare a Will or want to plan for retirement, we are here to provide objective guidance based on your unique financial circumstances. Contact us for more information!