Assante Hydrostone’s blog and news updates.

Making sure your retirement savings goal meets the new longevity

Published on: May 27th, 2022

retirement couple on beach

More Canadians are reaching retirement with a longer life expectancy, thanks to healthier lifestyles and advances in medical tests and treatment. According to Statistics Canada, a woman aged 65 is expected to live to 87 and a man to 85. That’s on average, so a retirement savings goal should allow for a longer life span – typically, to at least age 90.

Can you imagine a time when Canadians will need to fund a retirement lasting 30 years or even longer? Well, by the time your retirement rolls around, that could be you.

‘How much will I need to retire?’

This may be one of your first questions when you think about funding a 30-year retirement. Fortunately, you only need to provide the input we require – we’ll do the math. A key plan to share with us is how you wish to enjoy your retirement years. Do you hope to purchase a villa in Spain and travel through Europe, or downsize to a condo and spend time with your grandchildren? The lifestyle you envision helps us determine the income you’ll need, which is instrumental in setting your retirement savings objective.

However, many other factors contribute to projecting your financial goals, such as your marital status, health, tolerance to investment risk, estimated net worth at retirement and estate plans. We also take into account the effects of inflation and the new longevity. Ultimately, we help you arrive at a savings objective and retirement date that enables you to achieve your desired lifestyle without worrying about outliving your savings.

The mutual fund advantage

To fund a long retirement, you want the best possible investment returns for your level of risk. This is achieved through diversification, a hallmark of mutual funds. Your equity investments can be diversified across geographic regions, investment styles, market capitalization and economic sectors. Fixed income funds invest in a wide variety of bonds and other fixed-income securities that’s very difficult to duplicate otherwise.

Estate plans and retirement

Living longer may raise an issue regarding naming children as beneficiaries in a will. They could likely receive their inheritance when they’re already established – perhaps even retired. Instead, should you name grandchildren as beneficiaries? Or give children an advance on their inheritance when a financial boost can make more of a difference? We can tell you how giving while living may affect your financial health or retirement income.

When it comes to planning retirement income, there’s no single formula. Each retiree’s personal situation, financial status and investment personality dictate the most effective combination of income sources and strategies. A retiree who needs the utmost security might complement government benefits with an annuity and guaranteed investments to produce a reliable annual income. Someone with a higher risk tolerance may follow a method that draws income from a cash bucket, while a growth-oriented bucket generates potential future returns.

Just know that we choose from a variety of investment and withdrawal strategies so you can feel confident your retirement income will fund your desired lifestyle – to any age.

At every life stage, living longer can affect your financial picture – whether it’s the amount to save when you’re younger or the way you draw income when retired. Talk to us anytime you want to discuss how your wealth plan is meeting the needs of the new longevity.

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