Planning for income to last a lifetime

Retirement Planning Vancouver

Planning for income to last a lifetime

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If you are nearing retirement or already there, you face a critical challenge.

You have to rely on your pensions and savings to provide income. But you can’t know for sure how long you will need those assets to last. If they are not wisely invested or you spend too freely, you may outlive your savings.

Know the five key risks

There are five key risks to your retirement income. Knowing how to manage them will help you achieve financial security for the rest of your life.

1. Longevity
In Canada, both men and women are living longer than ever before. Yet many people underestimate how long retirement could last.
What you can do:

  • When setting up your retirement income plan, allow for the fact that your savings must last for 20, 30 or even 40 years.

2. Inflation
Don’t let recent low rates fool you – planning for inflation is still a necessity. Let’s say you start with retirement income of about $46,000. Even an inflation rate of 2% will steadily nibble away at it. After 25 years it would be worth approximately $28,000, a decline in purchasing power of 39%.
What you can do:

  • Include investments with the potential to outpace inflation in your portfolio and investment plan.

To read the remaining 3 key risks in this article by Fidelity Investments, CLICK HERE. If you have any questions or comments please contact Harry or David.