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Consider the years leading up to your retirement

Are you retired or starting to think about your retirement? If so, you should be thinking about asset distribution to provide a tax efficient income.

This is very different than asset accumulation. We spend years growing and accumulating investments, but there usually comes a time when asset preservation and distribution becomes paramount.

There are a number of factors to consider in the years leading up to your retirement and here are seven top tips for a comfortable retirement.

• It is important that you assume an appropriate level of risk. You can take too much risk and put your portfolio in jeopardy by not having enough time to recover. You can also take too little risk, and you may find investing too conservatively results in your expenses outgrowing your income.  

Investing solely in GICs typically results in loss of purchasing power of your dollars due to inflation.

• Failing to plan for long term care. A retirement portfolio can be destroyed by having to pay for the cost of a nursing home or other long-term care without any kind of protection.

• Making provisions for a surviving spouse. It is not a pleasant subject, but it is important for couples to plan for the eventual death of one spouse before the other.

• Living beyond your means. Very simply, if you spend more than you have, you will find yourself in trouble at some point.

• Knowledge is power that can cause your investments to create more earnings. When you have a clear understanding of your investments, you are in a better position to sleep at night without worrying that your money will disappear overnight.  

This can lead to a greater comfort level and acceptance of some risk, which can lead to higher returns.

• Find an advisor that you trust.  

You should be able to talk easily with your advisor, conversation should be in terms that you understand and you should be contacted and updated on a regular basis.

• When possible, get tax efficient income from your investments by taking advantage of the Tax Free Savings Account.  This will help you to keep more money in your own pocket, and may also help you to avoid clawbacks of government benefits.       

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