1) Do you have a goal for the age you want to retire?
[x] Yes
[x] No

The age you plan to retire will have significant implications on many aspects of your retirement plan including, how much you need to save, when to start pensions and government benefits and the sequence you use to draw-down on your assets. Until you have some idea of when you want to retire, it will be difficult to set any meaningful retirement goals. If you have no plans for your retirement, start by setting a desired retirement age.

Planning Tip:
If you are young, raising a family or focused on paying off debt, any retirement plans you make should simply default to age 65. If you plan to retire in the next 5 years, use this CPP/OAS Checklist before you apply for benefits.

2) Do you have a goal for the after-tax income you want in retirement?
[x] Yes
[x] No

Your retirement income will be made up of several different sources including government benefits, any pensions you have and your savings. Without having a goal for the after-tax income you want, it will be difficult to know if the projected value of your retirement savings will be adequate to meet your needs. A proper retirement plan will clearly illustrate that the after-tax income you want in retirement can be sustained well beyond your life expectancy.

Planning Tip:
If you don’t know where to start, try using this Retirement Budget Worksheet to compare your income and expenses today to what you anticipate may be needed in retirement.

3) Have you considered the difference between “needs” and “wants”?
[x] Yes
[x] No

When planning for retirement, it is important to understand the difference between your need for basic income and the cost of the extras you want. Breaking your income goal down into needs and wants, will help you set realistic assumptions when preparing your retirement plan.

Planning Tip:
Use this Budget Planner to create a “current” budget that includes both needs and wants, and a “proposed” budget where you can make adjustments to expenses until you have the desired result.

4) Have you considered the effects of inflation on retirement income?
[x] Yes
[x] No

Knowing which of your sources of income will be, and will not be fully indexed to inflation, and the impact this can have on your retirement is fundamental to a proper retirement plan. You should ensure that your retirement plan accurately illustrates the future value of the various sources of income you expect to have. Even a small change in the rate of inflation assumption used can have a huge impact on your retirement plans.

Planning Tip:
You can estimate a rate of inflation that is unique to you based on your spending habits with this Personal Inflation Calculator, and compare your results to that of the average Canadian.

5) Do you plan to relocate in retirement?
[x] Yes
[x] No
[x] Have not decided

Relocating in retirement can have several financial implications including the cost of moving and changes to income tax rates, both should be incorporated in your retirement plan. Although there is no best time for making the decision to relocate, your retirement plan should be flexible and allow for all types of added expenses such as renovations and maintenance of your current home.

Planning Tip:
Before you commit to relocating, use Numbeo, a crowd-sourced global cost of living database, to compare the cost of living across multiple cities.

6) Which statement best describes your travel plans in retirement?
[x] A rocking chair on the porch
[x] A 2-week vacation in the winter
[x] Winters in a warm location 
[x] World traveler

The amount of travel you plan to do when you retire should be factored into your planning. Without adequate travel insurance, you run the risk that an out of country sickness or injury could have serious implications to your financial security. If your travel plans include living out of country for extended periods of time you should consider purchasing travel insurance that is fully underwritten and guaranteed renewable today, so that when you retire you cannot be denied coverage.

Planning Tip:
If you have travel insurance through your employer, be sure to review your coverage before you travel. If you need to buy travel insurance, online or through an advisor, make sure you fully disclose all pre-existing conditions to avoid having a claim denied.

7) To what age do you expect to be an active traveler?
[x] No travel
[x] Age 70
[x] Age 80
[x] As long as I can

Unless you suffer from a serious health condition, you should have little difficulty securing adequate travel insurance into your early 70s. For many people, the cost of travel insurance in your 80s can be more than the cost of the travel. The longer you plan to travel in retirement, the more important the need is for planning. Without planning traveling at any age can bring added financial risks that can negatively impact your standard of living.

Planning Tip:
Regardless of your duration of travel, only with proper planning can you be assured of having both the resources and the coverage needed to travel without significant financial risk. Use this Guide to Travel Insurance to help you prepare for the unexpected.

8) What do you estimate your life expectancy to be?
[x] < Age 85
[x] >= Age 85

If you underestimate how long retirement will last, you run the risk of outliving your money by spending an amount each year that cannot be sustained. If you overestimate how long retirement will last, you run the risk of not fully enjoying retirement by spending less than you could otherwise. Your retirement plan should consider the combined life expectancy of you and your partner and adjust based on your individual health.

Planning Tip:
When planning how long you will need your money to last in retirement, assuming you are of average health, at age 65 life expectancy is 84 for males, 89 for females and 94 for couples. Use this Life Expectancy Calculator to see how leading a healthy lifestyle can add years to your life.

9) Do you expect to carry a mortgage into retirement?
[x] Yes
[x] No

Carrying a conventional mortgage into retirement will increase the amount of income you need in retirement to offset any mortgage payments. Eliminating all debt prior to retirement provides added financial security by reducing your need for income to make mortgage payments.

Planning Tip:
A fully paid for home is an asset that can be used in the later years of your retirement should you require additional income to pay for residency in a long-term-care facility. Use this Mortgage Calculator to create a plan to pay off your mortgage before or shortly after you retire.

10) Do you plan to down-size your house in retirement?
[x] Yes
[x] No

Planning to down-size your home in retirement can free-up capital that can be invested for income. Your retirement plan should account for the expenses of selling your home and the best investment strategy for generating income. If your plans are to move into a rental, this added expense should be factored into your income needs.

Planning Tip:
Before making plans to sell your home, use Honest Door to see how much your home might be worth and how much it will cost to replace it in a new neighborhood. The difference less closing costs and relocation expenses, can be used for retirement income.

11) Have you considered a reverse mortgage?
[x] Yes
[x] No
[x] Unsure what one is

A reverse mortgage is an arrangement where you collateralize the equity in your home as security for a stream of monthly payments. If you own your own home and require additional income in retirement, using a reverse mortgage as an alternative to selling your house will allow you to remain in your home for as long as you are able to live on your own.

Planning Tip:
For as long as you remain in your home, you are not required to pay the interest or principle on the amount borrowed. To see how much you can borrow and to learn more about reverse mortgages, visit the CHIP website (not an endorsement).

12) If you own a business, does the value factor into your retirement plans?
[x] Yes
[x] No
[x] N/A

As a business owner, you may have a significant percentage of your retirement assets locked in your business. Your retirement plan should include a “decumulation strategy” that optimizes withdrawals from both personal and business assets to reduce tax and maximize income while enhancing the value of your estate. Without advanced planning for how your business assets will fit in your retirement plan, last minute expenses related to the liquidation of your assets could make funding your retirement more difficult.

Planning Tip:
Retirement planning as a business owner can be complex and seeking professional advice from a qualified financial planner can help you achieve the goals you have. Visit this Website created to help the Canadian public learn about the value of financial planning.

13) Does your employer provide a pension or group RRSP?
[x] Yes
[x] No
[x] N/A

An employer sponsored retirement plan can provide you with an automatic way to save for your retirement. Without an employer sponsored pension or group RRSP, it is important to begin saving for your retirement as soon as possible to take advantage of the power of compound interest. If you are self-employed with your own corporation, you may be able to take advantage of an Individual Pension Plan (IPP) to provide enhanced retirement benefits and tax advantages.

Planning Tip:
Contributions made by your employer are not taxable to you until you begin to draw income from the plan, usually in retirement. It is important to understand how your plan is structured, so that you can integrate future benefits in your retirement planning. Use this RRSP Calculator to estimate how much your employer contributions will be worth to you at retirement.

13a) If you answered yes, do you take full advantage of any voluntary matching contributions?
[x] Yes
[x] No
[x] Unsure

Many employers that offer group RRSPs will match the contributions employee’s make up to a maximum percentage of their income. Whether your employer matches 100% of the contribution you make, or a lesser percentage, you should take full advantage of this free money.

Planning Tip:
You should contact your employer to ensure you are making the required contribution to maximize the free money available to you.