Outliving Your Retirement Fund

If you are concerned you may outlive your retirement fund, well, the financial experts say you should be. And what’s more, you are not alone. While more Canadians are living longer than ever, many are finding their finances strained, particularly those needing care in the final years.

With average life expectancy growing, Canadians are more and more worried about outliving their money. What a cruel conundrum. Here are few considerations to help you manage your wealth throughout your many retirement years.

The biggest risk we take when planning to retire is underestimating our own life span. Further, the thinking used to be that retirees spent more in the early part of retirement when they are busy travelling and playing golf, and less in the later years when they stay closer to home. Not so. As you age and your health begins to fail, your expenses can accumulate considerably.

Home care

Planning to live out your retirement in your own home? Then you need to budget for someone to help care for the home. For example, lawn maintenance, snow removal, and even regular home cleaning (especially the big jobs like those eavestrough and windows). Home care requires someone to monitor mediacations, you may need someone to drive you to medical appointments, and someone to help support you so you can have a bath safely. These costs all add up.

Long term care

At some point it may be necessary to consider leaving your own home and living out your retirement in a long term care home. Long term care is also quite costly, and the waiting list is long as government run facilities are already full.

Drawing down your money

Potential tax hits that accompany the drawing down of your retirement money is a huge threat to retirees. After spending all those years building up your nest egg, you will want to withdraw that money in the most tax-efficient way. You need to spend as much time figuring out how to best draw down as you did accumulating those savings. This takes some strategy and this is where you need some expert help.

Financial help you trust

 Financial strategies are complex enough, what can make matters worse is the potential for cognitive decline. One of the most important factors to be considered for retirement is a trusting relationship with a financial advisor. This is critical at all stages of your financial portfolio,  but especially important when you are in that phase of life where cognitive abilities may be on the decline. You need someone you can count on that will look after your best interests.

Each person has a different set of life circumstances, so your retirement plan really needs to reflect your goals and objectives, and it really needs to consider that you are likely going to live longer than you think. You also need to have your will, power of attorney and estate desires clearly established. Key to this plan is working with someone you can trust.

Whatever stage you may be at, McDougall is here to help. Give us a call today at 1.800.361.0941