I’m Thinking about Retirement

Your retirement will be as unique as you are. Travel, sports, hobbies … no one will combine these and other activities the same way you will. Your retirement plan should be just as unique.

After all, no one has the exact same retirement benefit plans, tax considerations and priorities as you. That’s why you need a personalized approach to provide steady income when your regular paycheque stops.

Working with an RBC Financial Planner is one of the easiest ways to get started with your retirement plan. In addition, you can use resources like the ones below to help guide your conversation:

• Defining Your Retirement
• How Will I Fill My Time in Retirement?
• Retirement Planning: Top Things to Consider
• Where Will My Retirement Income Come From?
• Your Future by Design^® Tool

Timing your Registered Retirement Income Fund (RRIF) conversion is very important as this decision can impact the amount of taxes you pay and your government benefits.

You must convert your Registered Retirement Savings Plan (RRSP) to a RRIF or an annuity—or cash it out (not typically recommended)—by December 31 of the year you turn 71. You can also make the switch before then if you need the income.

Since RRIF payments are considered taxable income in the year you take the money out, these amounts are added to your “other income” for tax purposes. Once you convert to a RRIF, you have to withdraw a minimum amount each year and that money will be taxed. Your withdrawals can also reduce certain government benefits such as Old Age Security (OAS).

For help knowing when to convert your RRSP, talk to an RBC Financial Planner. He or she can help you understand your options and suggest strategies to help you make the most of your income.

Avoiding emotional investing, following proven principles and adjusting your plan for the right reasons can help you reach your goals.

• Negative headlines and market volatility can make it tempting to change a well-designed investment plan. While selling off your portfolio may make you feel better, this decision could mean lost opportunity and not achieving your long-term investment goals.
• Stay on track with these five principles of successful investing:
  • Invest early
  • Invest regularly
  • Invest enough
  • Diversify
  • Have a plan
  Explore These Principles
• Adjust Your Plan as Needed

Your investment plan should be dynamic, not static. Here are three “levers” that can be adjusted over the years to meet your changing needs.

• - Lever 1: How Much You Invest
  Concerned about not having enough money to meet your goals? Consider adjusting how much you contribute on a regular basis. Even a small increase can have a significant impact long-term.
• - Lever 2: How Long You Invest
  You can extend or shorten your investing time horizon based on your needs. For example, postpone retirement or re-enter the workforce if you want more time to build your wealth.
• - Lever 3: How Much Risk You Have
  This lever should be shifted carefully as your risk profile is core to your investment plan. The best way to do this is to review your portfolio regularly with your RBC Financial Planner.

When you retire, your income could come from at least four different sources:

• Government benefits such as Old Age Security (OAS) and the Canada Pension Plan (CPP)/Quebec Pension Plan (QPP)
• Registered Retirement Savings Plans (RRSPs)/Registered Retirement Income Funds (RRIFs)
• Work pension plan(s)
• Other personal savings and investments you may have

For advice on making the most of your income in retirtement, check out the following resources:

• Where Will My Retirement Income Come From?
• How Do I Know When to Take My CPP/QPP?
• RRIF Tips and Hints
• What Are My Pension Options When I Leave Work?