Frequently Asked Questions
Everyone's needs and concerns are different, especially when it comes to mapping out retirement. There are some prevailing concerns that you might share. Take a look at our more frequently asked questions, or contact us for more help.
Q: How will current retirement trends change my planning strategy?
A: Retirement planning will need to become increasingly strategic for a couple of reasons:
We live in a time that emphasizes health-consciousness and active lifestyles. As a result, ideas of retirement have been reshaped: It is now a time for ambition, a period where you can take stock of how you want to enjoy your time, on your terms. BMO Financial Group and Ipsos Reid recently undertook the most comprehensive survey of changing attitudes towards retirement.
Read full report.
At the same time, a demographic shift is occurring. The massive Boomer generation is moving en masse towards retirement age. By the year 2016, there will be 6.9 million seniors in Canada, which means there will be more seniors than children under the age of 14 in this country. Whereas previous generations had the benefit of a guaranteed income through retirement, new retirees may not. All this means that the retirement-aged population will increasingly have to examine their post-retirement needs and plan accordingly.
Q: How can my partner and I plan our retirement dreams, but still keep track of unforeseen circumstances?
A: BMO Financial Group's financial and life planning experts have made a point of learning about all the contingency planning that might be necessary for your retirement years.
Given that you have a spouse, you might want to start assessing how you plan to map your lives together. It's wonderful that you are considering the activities and achievements you desire in retirement – but what about farther down the road? What if something goes wrong? Our financial planning experts can help you identify the key risks of your plan, ways that you can mutually provide for each other. They can get you thinking about health care, living and insurance plans. Your housing situation. Your lifestyle choices and capacities.
Contact us for more information, or to book an appointment with a financial advisor.
Q: How can I be sure that I have saved enough to both satisfy my vision and support my family?
A: We understand how precarious the balance between a fulfilling retirement and a practical approach may appear. You have to consider your family, legacies, health or emergency issues and living expenses. Everyone needs to assess the risks of the future alongside their personal objectives.
Here are some primary risks you will need to consider:
Contingency risk – the unexpected events that occur, including eldercare, health and personal mobility concerns
Income risk – safeguarding against putting all your eggs in one basket, in the event that retirement proves more costly than thought
Longevity risk – you may be retired longer than you think!
For additional, detailed insights, consult a BMO Financial Advisor. By asking relevant questions and assessing your assets and goals, we can advise you how to realistically plan for this next phase - including challenges you may not have even considered.
Q: How can my spouse and I ensure that we've calculated correctly, and saved enough over the years to maintain our present lifestyle?
A: Analyzing your assets and expenses with a professional will be key in determining your needs. You can, however, do a quick calculation by following this rule of thumb:
If you withdraw 4% of your capital annually, you can expect your savings to last 33 years. If you withdraw 10% annually, you are out of money in 11 years. Today, retirement often includes a transition period of full or part-time work that can dramatically extend the amount of time your retirement savings last.
Alternatively, you can consult our transition illustrator to determine how your transition from work into retirement will affect your savings.
Q: How can I assess how prepared I am for retirement?
A: There are, in fact, a number of things you may want to flag while transitioning into retirement.
First we recommend that you consider your needs, or think about what factors you will face as you move into your retirement phase.
You also might want to consider:
The transition itself: Will you be transitioning into retirement by working part-time? Do you have plans to continue working for income? If so, how much is your projected income during this time?
Your financial outlook: Do you have a budget, including contingency risks and unforeseen circumstances? Have you updated your estate plan? Have you determined you beneficiaries?
Longevity: Has your family historically lived long and healthy lives? Do you think that you might see 90 or 100 years of age?
Investor type: What is your investor profile? Conservative, income or growth oriented?
A dependency phase: Though it may seem like a distant reality, have you considered the needs of a dependency phase?
Health care: Have you considered health care costs for relatives, your spouse or your dependent?
You might also want to take a look at our Case Studies to glance at hypothetical situations that other retirement planners face.
Q: How can I take partial employment into consideration when planning my retirement?
A: The New Retirement is about individual ideas and desires, so naturally you might feel inclined to continue working, one way or another.
BMO Financial Advisors can arm you with a number of tools that might help you to understand how to strike a balance between professional and personal aspirations. If you're considering opening your own consultancy, you might want to seek a professional opinion on determining business succession planning, tax planning or even new business creation? Contact us to learn more about our various service options.
Q: How can I protect (or even grow) my nest-egg while I'm in retirement?
A: More people approaching retirement expect a lifestyle similar to their current one. This may mean dipping into their nest-eggs for supplemental income. By seeking out the advice of financial advisors, you can learn how to develop tax-efficient strategies for funding your retirement. Protect the assets you've worked hard to accumulate. Continue to help them grow (possibly at a more modest rate). Determine when you might need to dip into your capital. Plan an effective spending strategy.
Based on the choices you make, our life planners can help you build a plan that allows you to spend what you need, when you need it. Contact us to learn more.
Q: How can my spouse and I determine whether selling our home will become necessary, given how financially demanding an active retirement may become?
A: Deciding whether to sell your family home can be troubling. BMO Financial Group can help you examine your options. Work with us to determine the cost of purchasing a new home, your future lifestyle needs, your present lifestyle situation, and how moving may affect your overall financial security. Our financial planning experts, with the additional expertise of our tax planning partners, can help you plot your next steps.
Q: How do I factor longevity into my retirement plan, given that I plan on living forever?
A: Today, the average Canadian man lives to 78, and the average Canadian woman to 81. But even beyond that (just think!), today's 65-year old couple has a one-in-four chance of at least one reaching 97 years of age. And a one in two chance that they will see 92 years of age.
Obviously this has huge implications for financial planning. Since most people wait until age 50 to get serious about saving for retirement, that leaves 15 years to accumulate enough assets to fund at least 20 years of retirement.
Start early. Seek guidance. Learn how you can live forever in a style that is unique to you.
Retirement Your Way®
