Has the pandemic thrown our financial planning for a loop?

New research from IG Wealth Management, covered recently by the Globe and Mail, suggests Canadians were “ill-prepared” for the effects the pandemic had on their finances.

According to the article, the research shows that only 20 per cent of Canadians said “they have a good sense of their current level of financial well-being.”

An eye-opening majority – nearly three-quarters of those surveyed – confessed they “are not managing debt well,” and few say they stick to a budget. Finally, the research showed that “less than half feel they have the right retirement investing approach and tax strategies in place.”

The article is authored by Dean Murchison, president and CEO of Winnipeg-based IG Management.

After rhyming off the major events with financial impacts in our lives – positives, like getting married, buying a home, having a family and travelling, as well as negatives, such as divorce, job loss, or getting sick or injured, Murchison says good financial planning needs to take into account all these scenarios.

“Any advisor who wants to set their clients up for success must develop a holistic approach to financial planning. That includes incorporating various components such as helping clients manage their cash flow and daily spending, planning for major expenditures, preparing for the unexpected, optimizing taxes and retirement savings, sharing wealth through estate planning and, for entrepreneurs, maximizing business success,” he writes.

Investing tends to be a main focus for financial advisors, but there’s more to think about than just that, Murchison writes.

“Stock markets will go up and down, but a good financial plan keeps clients on course to reach their goals in good times or bad,” he writes.

Such a plan has to guard against what he calls “financial leakage.”

“That can be paying too much taxes, paying too much interest to carry too much debt, paying for things they don’t use (such as subscriptions or memberships), and generally not really knowing where their money goes,” he explains.

Advisors, he believes, need to “resist the urge to focus solely on portfolio management strategy and returns” when meeting clients, and instead, should “learn more about their lives and their goals.” That way, tax strategy, retirement readiness, and estate planning can be factored in, he concludes.

This is good advice. There is much more to retirement savings that the pure act of saving. You’ll need to figure out your income from all sources, and then ensure that it’s enough to cover your post-work expenses. So things like tax planning, which is not that big a deal when you’re working, becomes huge when you’re not.

It’s a lot to think about.

There is a way to offload some of the worries we may have about investing our retirement savings, however. Why not get the Saskatchewan Pension Plan on your side? They’ll invest your retirement savings leveraging investment expertise that has delivered an average rate of return of eight* per cent since SPP’s inception 35 years ago. Be sure to check them out today.

*Past performance does not guarantee future results.

Happy retirement: We want to join everyone at SPP in offering Katherine Strutt, who is stepping down after more than 30 years with the organization, our very best wishes for a long and happy retirement!

Join the Wealthcare Revolution – follow SPP on Facebook!