You’ve accumulated funds from a wide variety of sources in order to ensure you can live your best life in retirement. The hard work is done, but there are still many facets to consider when establishing exactly how you’re going to spend the money you’ve earned for your retirement. This is where retirement protection comes in. Retirement protection consists of a number of tools used together to establish a holistic strategy to lessen some of the inherent risks of a retirement fund.
Time to Consider
Put bluntly, your retirement fund will have to last you until you die. Retirement protection, then, consists of two timed elements. First, we must establish a plan in which your retirement funds allow you to support your lifestyle for the rest of your life. Second, we must find a way to protect those funds should you pass away. In other words, your retirement fund should be protected for you and for future benefactors.
Retirement funds are an interesting study in risk. You have a large sum of money at your disposal – something aggressive investors might look at with dollar signs in their eyes. There are a variety of vehicles you can use to protect and grow your retirement fund. Some of these tools, like GICs and TFSAs, are designed to be low-risk investment opportunities. Other tools, like high value life insurance policies, are designed to reduce the tax burden on beneficiaries of your estate. When evaluating risk, it’s important to consider taxes on yourself and potential estate beneficiaries, as well as how much you stand to lose in high-risk environments. There’s a reason that financial planners will often advise you to invest aggressively in stock portfolios when you’re young, only to tell you to begin investing in bonds when you’re older – once you’ve retired, it’s not easy to replace your income.
Understanding flexibility is essential to evaluating your retirement fund-related risk. Annuities, for example, exchange the payment of a lump sum premium for a guaranteed income from the company you bought the annuity from. In some ways, this limits your flexibility; you can’t simply access cash from the lump sum payment when you need it. On the other hand, signing an annuity contract can guarantee you never outlive your retirement savings. How much access you’ll need to liquid assets will depend on your lifestyle, savings, and how much you intend to give to the beneficiaries of your estate.
We offer a wide variety of financial products that can help you protect your retirement savings, including life insurance in Winnipeg. Looking to protect and grow your hard-earned retirement savings? Get in touch with us.