11 Smart Things to Do Before Retirement in Canada: Every Seniors Should Know These
“11 Essential Steps for Canadian Seniors Before Retirement: A Must-Know Guide”
11 Smart Things to Do Before Retirement in Canada
Retirement is no longer a distant concept, even if it feels like you just started your career. While it might seem like a major transition, careful preparation can bring comfort and peace of mind as you enter this next phase of life.
As you gear up for retirement, there’s a lot to wrap up with your advisor, but let’s not overlook how remarkable this journey should be. In this post, we’ve gathered 11 smart things to do before retirement in Canada.
Average Money Needed to Retire in Canada
Deciding when to retire and how much money you’ll need isn’t set in stone. It depends on factors like your preferred lifestyle, where you want to live, and the activities you plan to engage in. Figuring out the portion of your income you want to replace during retirement can be a useful starting point.
Ideally, aiming for a minimum of $70,000 per year is a good target, considering the expectation that your expenses will be less than your pre-retirement income, following the 70% guideline. Planning to retire at 65? It’s estimated that you should aim to accumulate around $1,750,000.
These 11 Wise Things Should Be Known by All Seniors
1. Discover your retirement “type.”
Visualizing retirement feels challenging when it’s years down the road. Yet, understanding it’s crucial for building a solid nest egg, you buckle down and give it your all at work. Experts suggest a bit of self-awareness today might lead to fewer surprises when you eventually meet the future version of yourself in retirement.
2. Think about your retirement funds
As retirement approaches, your income and expenses might undergo changes. It’s crucial to base your new spending budget on the expected monthly income during retirement. Some costs, like utilities, travel, healthcare, and entertainment, may rise in retirement. Take into account both your monthly and annual budgets when shaping your spending plan.
3. Examine your sources of revenue.
While working, we strive to save for our life after employment. However, when retirement arrives, the dynamics change. It’s crucial to identify your retirement income sources, such as employer and government pensions, registered and non-registered accounts, and Tax-Free Savings Accounts (TFSAs).
4. Guaranteeing Stability of finances
Monitoring your spending helps uncover areas where you can reduce or eliminate debt and costs, providing insight into your potential retirement expenses. Downsizing might also seem appealing, especially with the recent substantial increases in property prices.
5. Evaluate your requirements for insurance
As you age, your insurance needs are likely to change. With fewer obligations and dependents, you might not need as much life insurance. However, maintaining coverage for emergencies like home or vehicle damage is still wise. If you were previously covered by a workplace insurance plan, it’s a good idea to explore the cost of independent coverage.
6. Submit a claim for government assistance
Waiting until the last minute to apply for government assistance can lead to delayed payments. To ensure your CPP benefits are received on time, submit your application at least nine months before your retirement. Also, make sure your tax filing is up-to-date for a smoother process.
7. Go through your will and powers of attorney.
If retirement is on the horizon, consider updating your will. A current, legal will ensures your estate is distributed as you wish, providing peace of mind. Moreover, having a well-organized will can ease the legal and administrative burden on your family.
8. Clear your obligations or debts