{"id":657,"date":"2020-10-30T01:03:09","date_gmt":"2020-10-30T01:03:09","guid":{"rendered":"https:\/\/www.thomascchan.com\/old\/?p=657"},"modified":"2020-11-29T22:59:13","modified_gmt":"2020-11-29T22:59:13","slug":"stressed-about-retirement-planning","status":"publish","type":"post","link":"https:\/\/www.thomascchan.com\/old\/stressed-about-retirement-planning\/","title":{"rendered":"Stressed about retirement planning?"},"content":{"rendered":"\n

Are you stressed about retirement planning in Canada? You\u2019re not alone.<\/h2>\n\n\n\n
\"Stressed<\/figure><\/div>\n\n\n\n

According to a survey from CIBC and Maru\/Blue, forty per cent of Canadians are worrying about the effects of COVID-19 on their retirement plans. In this blog post, we look at the three main reasons why Canadians feel stressed about retirement, and how to prepare for retirement with the takeaways from Tom Hegna’s book, Don’t Worry, Retire Happy<\/em>. <\/p>\n\n\n\n

Reasons why Canadians are stressed about retirement<\/h2>\n\n\n\n

1. Never Think About Retirement Planning<\/h3>\n\n\n\n

Thirty years ago when the Defined Benefit Pension plan was available, people didn\u2019t have to think much about retirement planning in Canada. This plan placed the responsibility for retirees\u2019 income on employers and the government and most people were covered by the plan.<\/p>\n\n\n\n

However, by 2011, only 18% of Canadians were covered. <\/p>\n\n\n\n

2. No Clear Financial Strategy<\/h3>\n\n\n\n

Largely because people don\u2019t know how to plan for retirement, many people decide to just wing it, hoping there will be enough money for retirement when they are ready. <\/p>\n\n\n\n

Unfortunately, this strategy is dangerous. About \u2154 of Canadians don\u2019t even know how much money they will need in retirement or how long they will need it. However, these questions are important to answer along with what happens if you need long-term care.<\/p>\n\n\n\n

3. Focus on Assets, Not Income<\/h3>\n\n\n\n

Before retirement, people are in the accumulation phase. They are used to focusing on growing their assets. However, retirement is the opposite, but many people don\u2019t have a clear plan for this.<\/p>\n\n\n\n

Most investment ads are focused on the accumulation phase. For example, everyone is always trying to sell us on RRSPs as an investment tool for retirement or we hear about the tax benefits and how it facilitates saving for the long-term.\u00a0However, no one explains how to take out the money at retirement. For example, did you know you have to take the money out by age 71? Otherwise, you could end up paying more in taxes. When you retire, your game plan has to change, but many people don\u2019t know this.<\/p>\n\n\n\n

So what do you need to do? <\/p>\n\n\n\n

How to prepare for retirement in Canada<\/h2>\n\n\n\n

As a financial advisor for over 10 years, I always reference the book Don\u2019t Worry, Retire Happy<\/em> by Tom Hegna and encourage my clients to consider the following four takeaways from the book. <\/p>\n\n\n\n

Define What Retirement Is to You<\/h3>\n\n\n\n

First off, you need to define what retirement is to you. For me, I think retirement should encompass the ability to do whatever I want to do without having to worry about bills. In other words, financial freedom.<\/p>\n\n\n\n

Of course, everybody has a different idea of their ideal retirement. One person might love the idea of sitting on the couch all day while another would love to travel and will take 5 trips a year. <\/p>\n\n\n\n

Keep in mind that there are three stages of retirement.<\/p>\n\n\n\n