Why do I need to plan for my retirement?
Keep in mind that retirement isn’t just an extended vacation, but a major life transition. And, like many transitions (graduation, starting a career, moving, marriage, having children) retirement can be challenging if you are not fully prepared. Let’s deep dive into vacation vs retirement planning likeness to understand importance of retirement planning:
Vacation planning demands :When am I going?
Retirement planning demands: What year do I plan to retire?
Vacation: Where am I going and what is my budget?
Retirement: Where will I live? What is my net worth? How is my cash flow?
Vacation: Do I have an itinerary? Am I going with anyone else?
Retirement: How will I spend my days and what kind of lifestyle do I want? Will I be near my family?
Vacation: Do I need to rent a car? Is the area walkable?
Retirement: Do I have a wellness plan to stay active and physically fit?
Vacation: Will I need travel insurance?
Retirement: Will I have adequate health insurance, including long-term care coverage?
Vacation: Do I have the required travel documents?
Retirement: Do I have my estate planning documents in order?
To address all these concerns of retirement, its planning becomes imperative. In Canada, when it comes to saving for retirement, a Registered Retirement Savings Plan (RRSP) is a popular choice for most Canadians that helps to achieve long term goals (Although TFSA is also an effective savings tool, its bit unfortunately underestimated).
Defining The Registered Retirement Savings Plan:
It is a savings tool that allows you to accumulate money throughout your life while reducing your tax bill. It is registered with the Canadian federal government that you can contribute to for retirement purposes.
Why investing in RRSP?
Let’s understand major pros of investing in RRSP:
1.The amounts for which you contribute to an RRSP are deductible from your taxable income , which could entitle you to a tax refund;
2.The return generated by your investments is not taxable as long as your investments remain in your RRSP;
3.If you are buying your first home or going back to school, you can borrow money from your RRSP as a loan, which you have a number of years to repay, interest free. If you started saving early (and often), you can plan your home-buying or education strategy based on your RRSP savings;
4.The feature of carrying forward unused contribution rooms indefinitely adds an attraction to its beauty;
5.There is a choice to defer your RRSP deductions which means you don’t have to deduct your RRSP contributions in the same year that they were made. Waiting to claim them in a future year may be beneficial if you are in a lower bracket currently but think that you will end up in a higher one.
6.Choice of a right financial advisor can help to make the most of your RRSP as there are multiple ways of this savings plan;
Why do I need a financial advisor in planning my retirement savings?
Planning your retirement savings without an expert professional advisor can prove to be a fruitless task because in the absence of specialist’s advise:
1.Efficiently navigating your way to and through retirement may get missed;
2.Differentiation between long and short term goals may cause confusion;
3.Holistic analysis from saving and investing to budgeting and spending may go on a toss;
4.Overall financial health and habits that can help you to build your wealth may get compromised;
5.Whether you already have some money stashed away for retirement or not, absence of right time advise of boosting your savings, identifying shortfalls and then protecting what you’ve saved as you head into retirement may lead your financial planning steering to a wrong direction.
Book your appointment today for best financial planning services with Best Planners Inc
Address 195 Queen St.E, Brampton
E Mail email@example.com