How to Plan for Your Financial Future in Your 60s

Aug 15, 2018 12:25 PM ET

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Whether you plan to retire right at 65 or work a little longer, you’re likely eager to ensure your retirement dreams can soon become a reality. Here are some tips on helping prepare for this significant milestone.

Steps to take at age 60 and beyond:

✔ Take stock of income sources. Canadians have been accumulating savings their entire lives; in retirement, the tables turn. It’s important to determine what your income sources for retirement will be, such as government pensions, workplace pensions, registered and nonregistered accounts, and Tax-Free Savings Accounts (TFSA). Speak with a professional to discuss the order in which to access them.

✔ Factor in all the phases of retirement. It’s helpful to think of retirement in three stages. In the early stage, spending tends to be higher, as more time may be spent travelling and crossing items off your ‘bucket list’ that may have been put off while working. In the middle stage, time spent with family and friends often takes priority, as routines are established. In the later stage, the spotlight is typically on estate planning; health care, and all the associated costs, may become a greater focus.

✔ Consolidate your investments. Holding investments at a variety of financial institutions may seem like an effective way to diversify investments, but it could hold you back from reaching longterm financial goals. Combining investments at a single institution can have many benefits including greater clarity to achieving your financial goals. Consolidating can make investing more convenient by reducing the number of tax slips and statements you receive, helps reduce fees, helps diversify effectively and maximize tax efficiency. By simplifying your investments, and through a fully integrated plan, you can stay on track.

The don’ts:

✘ Rush into downsizing a home. More than half of surveyed Canadians between 55 and 64 are considering selling their homes to help fund their retirement.1 But while it may seem like a great idea to downsize given significant gains in home prices over the last decade, you may find there’s less of a boost to your nest egg than expected – especially after paying the added costs (including any applicable land transfer tax and legal fees).

✘ Keep mum about your estate plan. Though it can be an emotional conversation, speaking with family about an estate plan now can help avoid conflicts between loved ones down the road. It’s not necessary to provide all the details, but an understanding of your wishes can go a long way. It is common to choose a family member to be the executor. However, choose the family member carefully as this is a role with significant responsibilities and both parties should be comfortable with the decision.

✘ Draw too quickly from retirement savings. Saving enough for retirement is important, but so is drawing from it at an appropriate pace for the two decades or more spent in retirement. According to a recent study, individuals aged 50 and over reported saving an appropriate amount of income (an average of 20% annually) but planned to withdraw 15% of their retirement savings annually – three to four times the rate that is typically recommended.2

Check out how to plan your financial future in your 20s, 30s, 40s, and 50s.

1. 2016 RE/MAX poll conducted by Leger, RE/MAX Spring Market Trends Report.

2. Survey: Canadians nearing retirement need help for the future; Morneau Shepell, July 2016.

Legal Disclaimer: This article is provided for information purposes only.  It is not to be relied upon as investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell.  Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability.  Readers should consult their own professional advisor for specific investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.