February 26, 2024

Answer these questions to see if 2024 is your year for retirement: Ibbotson

Writing in the Winnipeg Free Press, noted financial writer Christine Ibbotson outlines ways you can confirm whether or not you are ready to hit the silk, and start your retirement.

She says she is frequently asked about retirement before 65 by folks who dream of “finally being free” of work – even the at-home variety.

But, she says, there are things to ask yourself before taking the retirement plunge.

“Is all your debt paid off,” she asks – credit cards, mortgages, lines of credit and car loans?

Next, she asks, “are you really ready to give up working, or are you just tired of your current position and need a change?”

A third thought is this – is someone else depending on your current income? “Will you need to support anyone other than yourself? If so, for how long, and how much will that cost annually?”

Do you have the flexibility to “downsize your residence or move to a less-expensive area to lower your monthly expenses,” she asks.

Are you clear on what your retirement income will be, she asks. “Will you have a consistent monthly revenue stream that is long-lasting and able to sustain you during times of uncertainty? Preferably in addition to Canada Pension Plan and Old Age Security government benefits.”

She asks if prospective retirees have any upcoming “large future expenditures” they have yet to save up for – and if the expense can be cancelled.

Do you have a realistic budget for retirement income, she asks – one that is as exact as possible, is costed out in today’s dollars, and factors in inflation and taxation?

Finally, she asks about socialization – do you belong to any clubs or social organizations, and have you factored in the cost? And do you have a plan on how to fill in your retirement hours? “Does your retirement partner want the same things as you and are they willing to make the same sacrifices to retire early?”

This is one of the best pre-retirement quizzes we have ever seen, and we sure wish we had read it years ago when we planned our own retirements.

We did get estimates from our pension plan at work about how much our retirement income would be, and they advised us to do a “net to net” comparison on income. This is key, since your pension is almost always less than what your work wages were – and usually is taxed at a lesser rate. So, know your take home pay after retirement to help you plan.

If you don’t have a workplace pension plan, don’t worry – the Saskatchewan Pension Plan may be just the thing you’re looking for. SPP is open to any Canadian with registered retirement savings plan room.

You decide how much to contribute each year – contributions are tax-deductible like an RRSP – and SPP does the heavy lifting of investing and growing your savings in a large, professionally managed, low-cost pooled fund. At retirement, your choices include the possibility of a lifetime annuity, or SPP’s Variable Benefit which allows you flexibility in how much income you want to collect.

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.

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