Retirement: Wasn't there supposed to be cake?

_{By Bromwich+Smith Staff | 549 words | Reading Time: 2 minutes and 28 Seconds | Date: 2022/04/05}

We’re all feeling a bit exhausted from the last two years,  between multiple waves of COVID-19 to a battered economy and a short supply chain, many, especially essential workers, are feeling overworked and burned out. And for those close to retirement, 2022 might seem like the best year to do so. 

Or is it? Unless you absolutely must retire in 2022, consider the following:

1. Inflation is still high

For almost seven months, inflation has stayed above the Bank of Canada’s 1-3% targeted rate. High inflation, fueled by short supply chains, has made cost of living expenses skyrocket. Everything from meat to cheese to gas is significantly more expensive, making it more difficult to budget out our everyday costs.

2. The pandemic isn’t officially over

What that could mean for you is limitation around what you can do in retirement. For example if you are wanting to travel in the early part of your retirement you may be facing restrictions on what countries you can visit. Along with potential exposure to the virus or variants. 

3. Retirement savings have been impacted

With the pandemic still in the foreground your investment portfolio may have been heavily impacted. If your retirement accounts have sunk in value, you may retire with less savings than you feel comfortable with.  

Can you retire in 2022? 

As eager as you may be to retire, if you’re among the 32% of Canadians who are nearing retirement without any savings, you should probably rethink your retirement strategy before doing so. 

We want you to get to enjoy blowing out those candles on your retirement cake, so here are some suggestions we have to make it possible for you to do so:

• Set a date

Having a timeline in mind is a key component of retirement planning, it helps get the clock ticking, allowing you to come up with some short and long-term goals towards your retirement. 

• Budget

The next step is figuring out how much you’re bringing in, and how much you’re spending. This is important not just to figure out what you can afford, but what you’ll be spending in retirement. If you’re going to build a retirement plan, you need to know both. Along with planning around “what if” scenarios like: your health, dealing with house damage or inflation to ensure a comfortable retirement budget. 

• Other income

Now that you’ve figured out what income you have,  make sure you realize all the income you could have in the future. This would include Canadian Pension Plan payments, Old Age Security, an employee pension plan, and more. It also would include any investments like a Registered Retirement Savings Plan and Tax-Free Savings Account. Other elements to consider are your assets such as a home. If you’re going to be downsizing in the future or moving somewhere cheaper, that also increases your income.

Young or old, making sure you contribute regularly to your retirement plan will assure you can reach retirement when the time is right for you.

If you are feeling stress about your financial future in the face of retirement we’re here to help you. With Bromwich+Smith we ensure that our expertise will leave you feeling hopeful and confident. Call our Licensed Insolvency Trustees today for a free, no obligation, confidential consultation 1-855-884-9243. We want you to enjoy your retirement, worry-free.