1 | Time Your Benefits There are various benefits to taking government pensions and benefits such as CPP and OAS early. Still, there can also be benefits to delaying it, including higher payment amounts. Although eligible individuals can start receiving benefits at age 60-65, postponing the start of these benefits can result in significantly larger monthly payments. Your monthly benefit will increase for each year you delay up until age 70. This strategy can boost your retirement income, especially for those who expect a longer-than- average lifespan. However, if you need the cash flow for your retirement, you must tap into other sources earlier. This could leave you with a smaller RRSP or RRIF account later, and there’s a risk you won’t live long enough to benefit from the higher payments. It is a personal decision that should include a review of your finances.
stocks, bonds, and other assets can provide stability and growth potential, mainly when actively managed. Seniors should consider consulting with a well-qualified investment management team to tailor a strategy that suits their risk tolerance and retirement timeline, ensuring their portfolio continues to grow and provide income throughout retirement. 4 | Reduce Bad Debt Finally, one of the most effective ways to boost retirement savings is by reducing certain expenses and eliminating bad debt. Deferring property taxes might make sense for some; however, paying off high-interest debts, such as credit card balances, is better than maintaining lower-return investments. Downsizing living arrangements or cutting unnecessary expenses can also contribute to increased savings, which can then be redirected to investment accounts. Seniors have several strategies to boost their retirement savings and investment portfolios. To maximize income, it’s important to consider the tax implications of your withdrawals fully, the rules under which government benefits may be clawed back, and the optimal withdrawal rate from your investments. It can sometimes seem overwhelming, especially when you need to know the key elements determining whether your retirement plan will be successful. How long will you live? What will the markets do? However, planning and acting early is essential and working with a knowledgeable financial advisory team to help ensure a more comfortable and secure retirement! BRIANNE GARDNER is a Senior Wealth Manager and Financial Advisor with Raymond James Ltd., and a Canadian Investor Protection Fund member. This article is for informational purposes only and does not necessarily reflect the opinions of Raymond James Ltd.
Strategies To Boost Your Retirement Funds BY BRIANNE GARDNER Top 4
today and average benchmark investment returns generally lower than many realize, determining the best plan for your retirement savings can take time and effort. Effective risk management is as crucial as generating returns during the decumulation phase. There is far less room for error when withdrawing funds from your portfolio. In retirement, many Canadians rely on diverse income sources, including corporate pensions, government pensions, annuities, RRSPs, RRIF accounts, rental properties, and savings or investment accounts. Some may work part-time as well. A solid plan will address these complexities to maximize the amount of after-tax money you keep. Some effective strategies for boosting your financial stability in retirement involve assessing your withdrawal rate from investments, utilizing tax-advantaged accounts and balancing withdrawals across multiple types of accounts, paying down bad debt and reviewing whether you should take government benefits early or delay them.
Ensuring you have enough savings and income to last through retirement has been a typical concern for many generations. With the added challenges of heightened inflation affecting everyday expenses, escalating healthcare costs, and the increasing longevity of individuals, there is an even greater need to plan for the future proactively. Enhancing financial stability is the first step. Retirement looks different for everyone, but it's safe to say that all retirees have some common primary financial goals: to fund their retirement lifestyle, to ensure that their money lasts as long as, or longer than they do, to provide the ability to access a lump sum for emergencies, to minimize tax consequences, and to leave an inheritance possibly. The average life expectancy has increased considerably over the last 30-50 years. Generating an extra 5, 10, or 15 years of income, particularly if health care or assisted living costs are required, significantly impacts one's investment portfolio. With fewer defined benefit pension plans existing
2 | Utilize Tax-Free Accounts In addition, making the most of tax-
advantaged retirement accounts like Tax-Free Savings Accounts (TFSA) or RRSPs and RRIFs can significantly enhance one’s retirement savings. These accounts provide tax benefits, but your personalized retirement plan should include a tax strategy for when and what accounts to spend from each year. 3 | Optimize Withdrawal Rates Another strategy would be to assess your withdrawal rate on your investment portfolio. Ideally, your withdrawal rate would be lower than the portfolio growth rate, so you would never have to touch your principal. Retirement can now last a third of your life, and a proper investment plan will account for this timeline. It used to be more common to adopt a more conservative approach to minimize risk, but it's also important not to be overly cautious. A well-diversified portfolio with a mix of
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