4 tips to grow your money during retirement
Make the most of your retirement savings plan.
By Dominique J. Favreau
Personal finance blogger
To ensure that you get the most out of your savings, here are some suggestions from François Lincourt, Director, Advisory Services, Savings Market, Flexifonds.
01Invest and diversify
It's important to know that if the return on your savings is equivalent to less than inflation, you are losing money. For this reason, you should aim for a return that matches or exceeds the current inflation rate.
There are many financial products available. The important thing to understand is that you should diversify your portfolio. You know the old saying that you shouldn't put all of your eggs in one basket? It's definitely applicable here. Diversifying your assets means taking advantage of the assets that fluctuate while reducing the risk of financial loss by relying on more stable assets. For example, exchange-traded funds (ETFs) are a good option. Moreover, mutual funds are a great way to diversity risk. To this end, FlexiFonds products are geared to three different investor profiles. Mutual fund advisors are there to help you choose the product that best suits your risk tolerance and investment goals.
When you retire, consolidating all of your tax-free accounts into a single RRSP or RRIF and combining your taxable accounts can provide a return advantage for your retirement portfolio.
02 Limit fees
It's best to calculate how much to withdraw and when to withdraw so you can avoid paying too much tax. For example, let's say you're going on a cruise for 3 months during the winter and you hadn't planned on this expense. Would it be better to withdraw this amount before or after December 31st? Talk a financial planner, CPA or tax advisor who will guide you according to your tax bracket and other factors.
03 Plan for the unexpected
Unexpected events happen suddenly. Whether it's illness, divorce or death, build a cushion to be prepared for surprises.
Did you know that if your spouse dies and all of your current accounts are joint accounts, the money in them could be frozen until the estate is settled? We recommend making arrangements in advance. Nobody is immune to accidents. For example, what if your spouse broke his/her legs and was immobile? A power of attorney will give you the authority to manage his/her affairs and finances.
We also strongly suggest writing your willAttention, this link will open a new tab.. It's never the wrong time to review it or write it. And don't forget about a protection mandate in case of incapacity. Of course, we know it's not the most pleasant thing to do, but at least it will be ready if ever you have to designate a person to take care of you and to manage your assets.
04 Use a personal finance expert
Relying on a brother-in-law who considers himself an expert in financial matters is probably not your best bet! A professional will be able to provide helpful information while respecting your investment profile. There are many different types of finance experts and several places they can be found. Here is a list:
- Advisors at financial institutions (banks, caisses) - Advisors earn a base salary and may receive a commission on the sale of financial products.
- Independent advisors - These advisors make investments on your behalf but are often paid on a commission basis. Commission means that your investments cost you more.
- Securities brokers - Some of them require a minimum investment of $250,000 and, with that amount, your account will remain one of their smallest client accounts. Knowing that others are investing $10 million and more, it's not easy to say whether brokers will make time for you and your needs.
- Fee-based financial planner- These advisors aren't as common and work a bit like independent advisors. They manage your investments in exchange for consulting fees.
Needless to say, the miracle solution doesn't really exist. What's important with retirement is that you never lose track of your finances. Don't hesitate to ask an expert for advice so that he/she can help you in the event of unforeseen circumstances. By planning appropriately, you can optimize your money so that you can enjoy your retirement for a very long time.
Get unbiased advice with the FlexiFonds offering
FlexiFonds mutual fund advisors are paid a fixed salary, not on commission, and their sole aim is to help you achieve your retirement plans. Whether you’re looking to maximize or consolidate your savings, they'll provide sound advice to help you choose the savings solution that best suits your needs.
LEARN MORE ABOUT THE FLEXIFONDS OFFERINGAbout FlexiFonds de solidarité FTQ
FlexiFonds de solidarité FTQ Inc. is a wholly-owned subsidiary of the Fonds de solidarité FTQ. FlexiFonds de solidarité FTQ Inc. acts as the principal distributor of the funds' units and is a mutual fund dealer registered with the Autorité des marchés financiers.
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About FlexiFonds de solidarité FTQ
FlexiFonds de solidarité FTQ inc., a wholly owned subsidiary of the Fonds de solidarité FTQ, is a mutual fund dealer duly registered with the Autorité des marchés financiers. FlexiFonds de solidarité inc. acts as the principal distributor of the FlexiFonds funds and does not distribute the units of any other mutual fund.
