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Retirement is your time to do what you love and slow down enough to enjoy it. You can travel the world, get cozy in peace and quiet, break out of your comfort zone and try new things. But the dream of your glorious golden years can quickly turn into a nightmare if your finances aren't in order. A comfortable and sustainable retirement isn't about having tons of cash, it's about strategic planning, responsible saving, and sound decision-making. Follow these key steps to secure your financial future and enjoy retirement to the fullest.

Envision your retirement 

Before diving into numbers, start by envisioning what your ideal retirement would look like. International travel? Downsizing to a cottage? Spending time with friends and volunteering? You need to determine your goals before you can assess your financial needs. These factors are worth thinking about:

Location

Do you plan to stay in your current home, downsize to something smaller and more affordable, or relocate? Decisions like these can impact your cost of living dramatically.

Entertainment and activities

Will your days be spent focusing on hobbies, traveling, or going out a lot? Estimate how much you'll likely spend in these areas before setting an annual or monthly budget.

Healthcare

Depending on your personal health challenges, your retirement healthcare costs could be significant. It’s important to save for a rainy day and consider options like long-term care insurance.

Family and support

Will you be a dependent or will you be supporting family members? Do you need assistance with daily tasks that require trained support that is not covered by your insurance or government assistance? Ask these questions — they matter.

Crunch the numbers

With a clearer retirement vision in mind (and hopefully on paper), it's time to crunch some numbers. You’ll want to estimate your cash flow in retirement and determine how much income you'll need to maintain your desired lifestyle. 

Create a budget

Once you have an idea of how much you can spend annually in retirement, you can create your retirement budget using a retirement budget calculator tool online. Your budget should factor things in like:

Essential expenses

You’ll need to account for all of your non-negotiable costs, such as housing, food, utilities, transportation, clothing and healthcare.

Discretionary expenses

You’ll need to earmark a budget for costs related to entertainment, travel, hobbies, and dining out.

Inflation

The costs of goods and services will increase over time, so you’ll need to factor in an inflation rate (2-3%) to project your future expenses more accurately.

Maximize your savings

You’ll need to save money consistently to ensure a financially sustainable retirement. Start early and contribute as much as possible to your retirement accounts.

Choose a withdrawal strategy

You'll need a plan for how you’ll access your funds during retirement. For example, you could use the 4% rule where you withdraw 4% of your initial retirement savings each year, adjusted for inflation, to sustain your income. You may need to adjust your withdrawal rate as you go though. There are lots of different retirement withdrawal strategies. It’s worth talking your options through with a financial advisor to figure out what method is right for your situation.

Don’t forget about taxes

All withdrawals from traditional retirement accounts are taxed as income. Plan accordingly to avoid any upsetting surprises.

Reassess your withdrawal strategy annually

Your personal needs and market conditions will likely evolve over time. It’s wise to review your withdrawal strategy annually and adjust it as needed.

Pay down your debt

If you have high-interest debt, it can hinder your retirement savings. Focus on paying down your debt, especially credit card debt, fast. 

Get help from an expert

Retirement planning is challenging. Consult with a qualified financial advisor who can help you develop a personalized retirement plan based on your goals, income and savings. Their guidance on investment strategies, tax planning, and estate planning can be priceless.

Prepare to change course

Retirement planning evolves over time. You’ll need to adjust your plan as your needs and circumstances change. Keep up to date on market trends, tax laws, and your healthcare options in your province.Review your financial plan with a retirement specialist and adjust it as needed.

Retiring sustainably requires considerable planning and saving. By following these steps, you can enjoy your retirement to the fullest. 

Looking for an apartment to downsize to in retirement? Panoramic Properties would love to welcome you home. Please visit our website to browse our available apartments.