For many retirees, it can be a challenge to shift mindsets from saving and investing during working years to spending it in retirement. But learning to plan and pace your spending can go a long way toward ensuring your retirement savings will last through your lifetime.
Here are a few tips to get started:
Revisit your budget. As your circumstances change, so will your budget. There are items you may no longer need to purchase, such as commuter passes, workweek lunches or a special work wardrobe. However, other living expenses could increase in later years, such as medical care, supportive living or caregiver costs. Plan for your needs and wants, then be careful about spending outside your budget.
Understand registered plan rules. Be aware of the different features of your savings and investing accounts. Your Registered Retirement Savings Plan, for example, must be converted into a Registered Retirement Income Fund by the time you are 71 years old. Become an active and informed participant in your plans to manage taxes and maximize savings.
Get good advice. Talk to a licensed financial or tax advisor about when to apply for CPP, Old Age Security and your options for drawing on any company pension plans you may be eligible for. If you have money saved in multiple places (for example, an RRSP, TFSA and bank account), get some advice about where to withdraw money from first. Your advisor can help you plan to achieve your goals so you have peace of mind and are well prepared for your later years.
Find more information online at investorcentre.ific.ca.