Without proper preparation retirement may prove to be a difficult time for many Canadians. We are living longer and retiring earlier which means we will have more years in retirement. Longer retirement requires more money to maintain our lifestyle. If we are poorly prepared then government pensions such as OAS and CPP will not provide the worry free, comfortable lifestyle we seek in retirement. Private pensions from employers are decreasing both in number and in benefits. Also, in many cases retirement savings are far too little.
Retirement is becoming more expensive. Baby boomers are starting to retire in large numbers. Inflation, currently around 2% per year, is historically low. However there are indications that this will increase over time. That will adversely impact those living on fixed incomes. Another serious concern is that some of us have unrealistic expectations of what retirement will be like.
We are facing a difficult investment climate. Low fixed income rates combined with volatile stock prices make good investments for retirement income very difficult to find. Even bonds, a traditional safe harbor during volatile economic periods, are under threat of rising interest rates. The generally unsettled economic climate throughout the world is not contributing to the recovery in North America.
So what’s a person to do? Some options present themselves. Retiring later, partial retirement, purchasing a pension for life and better investment strategies may be available to us. The real question is which of these should we pursue and what tactics should we take?
We can help you with this problem. Contact us for expert advice with your retirement planning.