by Margaret Janecki, EPC, Independent Financial Advisor
Afraid of running out of money in your retirement?
Confused as to where to start in planning your retirement?
Feeling it might be too late to create a plan?
Today’s baby boomers and seniors face many challenges including cash-flow, health, longevity, family needs and changing lifestyles. Therefore it is critical to have a retirement plan, review it and tweak it regularly.
There are 5 steps of which to be aware when forming financial plans; Financial Plan, Manage Debt, Family Discussion, Health and Insurance.
In this issue, I will be talking about the first three.
1) Financial Plan – Do you have one and if not why not? We can help you set one up. They are to be reviewed annually and whenever you have life changing events such as changes in employment or becoming self-employed, purchasing a home, marriage/divorce, having a baby or raising grandchildren, and death of a family member. Financial planning includes:
(a) Building, saving, growing and protecting your hard earned money. This can be accomplished by diversifying investments through asset allocation, use of alternative investments, insurance products and pensions. In the past GICs were the staple for seniors’ income but with today’s historically low interest rates our capital is quickly eroded by taxes and inflation thus diminishing our capital’s purchasing power.
Canadians should be investing in products that will provide higher returns in their Tax Free Savings rather than hold guaranteed income certificates. 
(b) Market Volatility is the nature of the beast. Each year there is a new crisis claiming economic disaster whether it is Greece, China or the U.S. The important note is we do recover and the problems will be solved.
Equities purchased, in accordance with your time line and risk level, are an important component of a balanced portfolio to provide diversification, growth and income to survive longer retirement years. Segregated funds have certain death guarantees and by naming beneficiaries, even in non-registered accounts, can by-pass probate.
2) 
Manage DEBT – Is your debt growing out of control? It is important to manage debit efficiently to help balance cash-flow. More Canadians are retiring with higher amounts of debt than ever before. And there is a growing number of seniors who are considering declaring bankruptcy.
As you know, it is important to prevent debt from spiraling and have it under control. The main reasons for debt are over-extension of credit, insufficient or loss of income, and unexpected medical expenses.
To off-set our debt we may be forced to continue working longer or picking up a part-time job in retirement, refinancing the home or renting space within the home. Simply spending less today may help to balance cash-flow or simply down-size expectations.
3) Family Discussions – Are you concerned with your end-of-life care? The family dynamics for retirees has changed. Once we cared for our kids, now the “sandwich generation” is looking after adult children, grandchildren as well as their own parents. Supporting children and parents not to mention themselves might well alter retirement plans for such people because of the often large costs involved in ta
king care of multiple generations.
This is why whatever stage in life you are currently in you need to prepare for the inevitable that being death. Death and taxes are the only two certainties in life.
While seniors are coherent, along with their families and for all adults and their families, it is important to have families gather together to discuss Wills, Powers of Attorneys and Executorships.
This is the time to share your personal wishes, personal care and vision on how your legacy will continue.
This is your time to decide on who would best serve in these positions taking into account, their knowledge, experience, current family responsibilities, location and their age. For seniors, in most cases, it should be someone younger.
Who will be your Executor, will they be compensated and do they understand their duties or roles? If they are not clear, they will need to get advice, since as an executor they are liable for any loss through negligence or mistakes, even in good faith.
Examples of loss include: selling property at below market value; accidentally selling valuable items at garage sales; giving expensive household goods to charity.
To avoid potential liability, there is a new product to protect executors and this can be purchased and charged as part of the Executor’s fees before you administer the estate. Estates can take two to three years to be wrapped up.
This is an extremely important time to have an experienced accountant to file tax return and help an executor avoid errors and mistakes.
There is a huge need for advice on how to effectively use various kinds of financial assets, including equities, fixed-income, insurance products and pensions to create a cohesive retirement plan.
Call me, I can help.
Next issue, I will talk about the important issues of how Health and Insurance affects your bottom line.
If you have any questions about what you have read, call me at 905-206-9387.
Margaret