Sunday, November 22, 2009

Are you Planning to live a long long time

The number of Canadians aged 80 years and over topped the 1-million mark for the first time between 2001 and 2006, and the number of centenarians, those aged 100 and over, rose 22 per cent between 2001 and 2006.* According to the latest population projections, the number of centenarians could triple by 2031.*

The good news is that you can reasonably expect to enjoy a much longer life – but you should begin to plan now for those extra retirement years including planning how you are going to fund your new retirement lifestyle.

One aspect of retirement planning that you need to look at right away is longevity to be sure your income will extend for the 17 to 20 years beyond retirement that today’s 65-year-olds can expect to live (on average).**

Here are some tips to a long and comfortable retirement:
  • Decide on your desired retirement lifestyle.
  • Add to your Registered Retirement Savings Plan income with a complementary portfolio of investments that are eligible plus non-registered investments.
  • Assess your projected spending for essential and discretionary expenses and adopt an investment strategy that will match your spending needs. For example, you should plan to be able to meet such essential expenses as housing, food, clothing and medical treatments for longer than your life expectancy and for discretionary expenses like travel, dining out and a new car that can be modified for an increased amount during the first ten years and diminishing thereafter.
  • After retirement, manage your retirement savings withdrawal rate based on the size of your retirement savings, the average return on your investments over time, and the number of years you plan to make withdrawals.
  • Use life insurance to shelter excess capital and maximize the value of your estate; consider a life annuity that will provide a guaranteed regular income no matter how long you live.
  • Protect your income (and your spouse’s) with life insurance and supplementary health insurance including disability, critical illness and long-term care coverage.
  • evisit your plan regularly to assess investment performance, changes in expense levels or any other factors that can impact on how much you can spend in retirement for how long.
You professional advisor can help make sure you live long and prosper through all the years of your retirement.

* 2006 Census: Portrait of the Canadian Population in 2006, by Age and Sex: National Portrait, Laurent Martel and Ăˆric Caron Malenfant, Demography Division, Statistics Canada

** The Daily (Statistics Canada), Monday Sept. 27, 2004 – based on 2002 mortality rates

John Scholl B. Mathematics, CGA,

Consultant - Investors Group Financial Services Inc.

200 - 24 Queen Street East,

Brampton, Ontario L6V 1A3

Wealth Management & Financial Planning

Phone: (905) 450-2891 X529 Toll Free: 1 (866) 799-2223 x529 Cell (416) 731-3660 Fax: (905) 450-9747

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