By Aidan Kendrick
1 Prepare not just one, but two budgets
One is for your remaining years of working, and the other is for when you have retired. In thinking and dreaming about how you want to live in your retirement, you can start to prepare and budget for it now. This will give you a better understanding of your finances and give you a goal to work toward.
2 Project your income
You need to understand and project your income in your retirement. Knowing how much you will have each month will ground your expectations and give you a chance to organize housing, transportation and future activities. Be realistic, and think about potential unexpected costs and medical expenses.
3 Think about your long-term care needs
A tough as it is, there is a high chance that you or your partner will need to move to a long-term care home of some kind. Costs can quickly add up, and there are many options to consider. Think about your preferences and alternatives ahead of time.
4 Pay off your debt
While having a lot of money in your chequing account feels nice, it’s more practical to use that money to pay off your debts. Try to free-up more money for the future and get advice regarding smart investment options. Once your debt has gone, there will be one less expense on your plate. Focus on maxing out RRSPs, TFSAs and other investments that your financial advisor may suggests. Keep charge-card balances paid off.
5 Seek other sources of income
Regardless of what you did for a career, you might want or need to keep working. Take an inventory of the skills you have collected over time. You can put those to use in helping your son or daughter’s business, acting as a mentor or becoming a bookkeeper or the neighbourhood’s handyman. This will not only give you a little more cash in your pocket, but will also help your keep you active in the community and give you a more gradual transition into retirement.
6 Talk about it.
Being open, securing advice and discussing your options with family and friends is all part of the retirement process, even if you’d like to keep specific financial matters more private.
7 Keep your paperwork in order
Simplify your filing systems, decrease clutter, and organize your paperwork and documents such as your will and power of attorney. You never know which piece of information you or your loved one might need in a hurry, so give yourself peace of mind by knowing that everything is in order.
Aidan McKendrick is a communications intern with the Canadian Abilities Foundation.