Thinking about retirement? Wondering if you’re financially ready for it?
Creating a “retirement check list” can be a way to see if you’re financially prepared for retirement.
It’s never too late, but you might find this most helpful if you’re about 5 to 10 years away from retiring. This means you could still have time to adjust any plans you’re making, but you’re not so far off that you’re dealing in too many hypotheticals.
Here are a few things you might consider adding to your list.
1. Create or re-evaluate your retirement plan
The first step is having a plan for your retirement. If you already have a plan, it could be time to re-evaluate it.
When do you want to stop working?
How much money will you be working with?
What do you want your retirement to look like?
2. Figure out how much money you’ll be working with when you retire.
This could look like going into any investment or savings accounts you have and putting those numbers together to get a holistic view of your financial situation to see if you’re on track for your retirement goals and planned start date. This could also be a good time to re-evaluate your risk tolerance, and adjust if needed. This retirement savings calculator can be a great place to start.
If you have a workplace pension, you will also want to factor that in here.
If you have any debt, you may also want to make a plan for paying it off as soon as possible so it isn’t a financial burden when you’re retired.
You may also be entitled to government benefits and programs that can help in retirement.
In Canada, you may be eligible for:
Canada Pension Plan (CPP)
Old Age Security (OAS)
Guaranteed income supplement (GIS)
As part of this exercise, you will also want to decide when you start taking these government benefits if you are eligible, since this will impact the amount you receive monthly.
3. Consider replacing your workplace benefits with private health insurance
It’s important to look into your benefits and if they may change in retirement. This can be important to consider as you age, especially since there can be a difference between your lifespan – how long you live – and your healthspan, which is how long you’re healthy.
Whether it’s massage therapy, new glasses or a dental crown, there are many medical expenses that universal healthcare doesn’t cover. While coverage for some things, like prescription drugs or certain dental procedures for some people, does increase for seniors, there are still many common health or wellbeing expenses you may have to pay for out-of-pocket.
A private health insurance plan, like Canada Life’s Freedom to Choose™ health and dental insurance, can help to bridge some of those coverage gaps.
4. Update your insurance coverage
Retirement can be a great time to re-assess your insurance coverage to see if it still makes sense for your current situation.
For example, do you still need accident insurance now that you’re no longer working? Or should you think about converting your term life insurance policy into a permanent life insurance policy?
5. Ensure your estate planning is up-to-date
If you haven’t made a will, this is a great time to make one. If you’ve already started your estate planning, it can be a good idea to check-in and make sure it’s up-to-date as you enter this next chapter.