by Jamie MacDonald
Okay, you want to retire. What in the heavens are you suppose to do now? How do you know if you have enough to retire and will it last your life time?
The majority of people in Nova Scotia do not know the exact answer to those questions simply because they are too busy earning an income, paying down debt, and/or raising a family. Then it hits you, the mortgage is gone (hopefully), the kids have left the nest, and the job you have had forever is starting to get to you. Time to make a change.
Where do you start?
To begin with, look at your net worth. Simply add up the value of all your assets, including the market value of your house, land, car, savings, RRSPs, etc., and subtract your debt including mortgage, line of credits, credit cards, personal loans, etc.
If the amount is a negative then you might want to correct that before retirement.
Look at your monthly family net income (what income your family receives after taxes and deductions).
Total up the monthly debt payments you make from your mortgage, credit card, personal loans, car loans, etc.
Subtract the total debt payment from the total net income.
The answer, is the amount you use for living expenses and could closely reflect what income you need in retirement.
If you are presently having trouble getting from one payday to the next then you may need to consider downsizing and/or reducing your debt before retiring.
If you are fortunate enough to have savings, pension plan, or other retirement income then you may be able to supplement it with a Canada Pension Plan (as early as 60) and/or Old Age Security at (age 65) if you are eligible. You may also be eligible for government tax credits and more information is available by calling Pension Services 1-800-277-9914.
Finally, it is never too early to start reviewing your retirement. There are many other factors that impact one’s retirement including health, job loss, family matters, and lifestyle, so it’s important that you talk to your financial advisor before making any retirement decisions. An advisor can easily determine if retirement is right for you and most offer free advice. It’s the best place to start if retirement is in your future.
Jamie MacDonald, Advisor JS MacDonald Financial Services
Antigonish, NS (902) 735-3011