Consolidate your finances to manage your money more effectively when you retire
Consolidating your personal finances can give you a better overview of your situation as you prepare for retirement.
When preparing to retire, a host of decisions need to be made, especially when it comes to personal finance management. It's a great time to get informed and put your investment portfolio in order. One option to consider is to consolidate your finances. What does this entail? What are the benefits? Here's everything you need to know about financial consolidation to discuss it with your personal finance specialist and make a plan that suits your specific situation and needs.
A clear picture of your finances
It's not uncommon to accumulate savings with different financial institutions during your working life. Consolidating your finances means putting these sums together in one place. This strategy can provide a clearer overview of your accounts and sources of income, giving you a better idea of how much money you have and how to invest it. Consolidating your finances can also help you do the following:
- Optimize your tax bill
- Reduce your management fees
- Diversify your investments
- Plan your retirement income more easily
For instance, if you have several RRSP accounts at different financial institutions, you may face some management challenges when converting each of your RRSPs to a registered retirement income fund (RRIF), as you'll need to withdraw the minimum amount required by law from each account. If you consolidate your finances, you'll end up with a single RRIF, making it easier to manage your minimum yearly withdrawals.
A way to mitigate risk
Consolidating your finances is also a way to optimize your investment strategy. It's easy to end up with similar products at different financial institutions. Diversifying your savings helps mitigate risk. It's recommended that you invest in different products, such as bonds, mutual funds, and labour funds. By opting for products like these that also cover different parts of the world and industries, you can strike the right balance between your portfolio's overall risk and its return potential.
Diversification could also protect you from market fluctuations. This is because different categories of securities, such as stocks and bonds, can move in opposite directions. For example, if the economy weakens, stocks tend to fall. As a result, central banks may lower interest rates to reduce borrowing costs, which can lead to higher bond prices. Gains on some products, such as bonds, can offset losses on others, such as stocks.
Consolidating your finances can give you a clearer picture of your multiple sources of income. It's also a way to optimize the management of your retirement assets and mitigate risk. To find out if this is the right strategy for you, talk to a personal finance specialist. You can also meet with different financial institutions to compare offers and make an informed decision.
Getting a second opinion is always a good idea, especially when it comes to making an informed decision about your savings and retirement plans. Flexifonds mutual fund advisors are just a phone call away and can answer all your questions and help you choose the right solution for you.Farida Larfi, FlexiFonds Mutual Fund Advisor
The FlexiFonds offering: retirement savings solutions
Are you looking to maximize or consolidate your retirement savings? The Fonds de solidarité FTQ has launched the FlexiFonds offering to meet your needs and support you throughout your retirement. Better yet, with these new products, you can continue to support Québec's economy! The FlexiFonds offering is the logical extension of your Fonds experience.LEARN MORE ABOUT THE FLEXIFONDS OFFERING
About 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.