Once you have found a financial advisor that specializes in retirement income planning, they should be able to guide you through the process using a series of meetings that will:
- Identify your values and what is important to you.
- Determine what your retirement goals and income requirements are.
- Discuss your other goals that require planning and money to achieve.
- Benchmark your current reality.
- Establish a plan to close the gap to meet those goals.
- Act as a guide to help you stay on track by being able to adjust and adapt your plan and strategies as required.
The Retirement Road Map Process
- Preliminary Meeting
- Strategy Review Meeting
- Implementation Meeting
- Get Organized Meeting
- Regular Progress Meetings
Preliminary Meeting
The purpose of this meeting should be to ensure the advisor is in total alignment with your family’s dreams, hopes and desires, and what you wish to accomplish and achieve over time.
In this meeting the advisor should find out:
- What are your values and what is important about money to you?
- Benchmark your current financial situation.
- Review your projected retirement dates and spending requirements.
- Discover your other goals that require money and planning to achieve.
At the end of this meeting, you can decide if you wish to take the next step of having a preliminary strategy developed for you.
Strategy Review Meeting
In this meeting, with an understanding of what you wish to achieve and being in alignment with you, the advisor should have developed and formulated the specifics of your Retirement Road Map.
This involves reviewing the required strategies and plans that will enable you and your family to accomplish your dreams, hopes, and desires in the time frames you have selected.
The risks to retirement income planning should be taken into consideration to create a concise step-by-step plan of action for your retirement income and cash-flow strategy.
Steps may include, but are not limited to:
- Documenting your current situation, income requirements, and estate objectives.
- Creating a detailed income & cash-flow strategy that will:
- Outline if you can achieve your goals using cash-flow based financial planning software.
- Utilize ‘what if’ options to maximize your income & cash-flow plan.
- “Stress Test” your plan to see if it will withstand market fluctuations.
- Detail how to best sequence the withdrawal of income from your various income sources (CPP/OAS/RRIFs/TFSAs etc.) to reduce taxes and increase asset longevity.
- Provide a strategy on how to best deploy your financial assets and investments to achieve your goals.
- Plan for health care and real estate assets as you age.
- Estimate taxes and estate costs.
- Ongoing guidance, review, and annual update of your retirement income & cash-flow plan.
- Strategies for the surviving spouse and the successful transfer of wealth to the next generation.
- Co-ordination with your accountant and lawyer.
This strategy should address the key actions and strategies to help you manage the unique risks of retirement income planning such as longevity risk, inflation, taxes, investment risk, sequence of return risk, and health risk.
Part of the strategy review should include a preliminary breakdown of the potential costs to implement, such as:
- Custodial Costs,
- Investment or Product Costs,
- Advisor Cost for advice.
If you decide to proceed with your Retirement Road Map, the next step is to schedule a meeting to begin the execution and implementation of your strategy.
Implementation Meeting
The execution and implementation of your strategy should be in the order of the most important tasks.
Often for people transitioning to retirement the key implementation items are:
- Retirement Income and Cash-flow
- Creating a sustainable cash-flow payment strategy.
- This should include the sequencing of where and when you should start the cash flow from the various sources of income (CPP, OAS, RRSP’s, TFSAs, pensions, non-registered).
- Investment Deployment and Asset Management
- Setting up initial investment allocation, asset deployment and products, including tax effective investment options.
- Asset location strategies on where to place the investments within RRSPs, RRIFs, TFSAs, and non-registered investments.
- Tax Review
- The initial tax strategies to reduce your taxes today and in the future should be reviewed and implemented.
Get Organized Meeting
Your advisor should meet with you about 45 days after the deployment of your strategy to make sure you understand the implementation steps so far, and to determine the next action items. Key items to review would be:
- Review of the paperwork.
- Review of the digital services the financial advisor’s company has, and how they can make things easier for you.
- Review of the investments and the allocations.
- Developing a plan on the next most important steps to take.
The next article will review the regular ongoing progress meetings.
For more information you can refer to Preserving Wealth: The Next Generation – The definitive guide to protecting, investing, and transferring wealth by Jack Lumsden, MBA, CFP®
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This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see me for individual financial advice based on your personal circumstances. The information provided is for illustrative purposes only. Commissions, trailing commissions, management fees and expenses, may all be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. Please read the Fund Facts and consult your Assante Advisor before investing.
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