Live well, Retire well

Live well, Retire well - Patricia Lovett-Reid

PATH is 4 step guide to a successful and financially predictable retirement:
1. Picture yourself in retirement
2. Arm yourself with the right financial and planning tools
3. Transition into retirement with style
4. Harmony: Put it all together and well balanced

PICTURE YOURSELF - Ask yourself questions:
1. How old will you be when you retire?
2. What kind of leisure activities do you see yourself doing?
3. What kind of, and how much travel do you see yourself doing?
4. How big a role will family activities play in your week-to-week activities?
5. How big a role will friends and social activities play in your week-to-week activities?
6. Do you see yourself mostly alone?
7. Do you see yourself and your spouse mostly alone?
8. Do you see a full slate of social activities?
9. What kind of work - volunteer or paid - do you see yourself doing?
10. Where do you see yourself doing all the above? Where you are now or in some other geographic location?
11. If you see yourself in some other place, where do you think it will be?
12. Will you live there full-time, part of the time, or will you try to evenly split your time between two or more places?

Your pre-retirement planning strategy
1. Attitude - Make sure you begin with a positive attitude; at the very least have an open mind. The more open you are in the process, the faster it will take hold and become easily achieveable in your mind.
2. Set realistic goals. Be specific about what you want to accomplish, whether it's keeping the exact same lifestyle you have now, downsizing or even upsizing.
3. Picture your retirement. Find a quiet place and begin a dream about what would make you and your spouse happy. Visualize the result over and over so it starts to feel like a comfortable reality. If you haven't talked to your spouse about your picture, or learned what his or her retirement picture is, now is most definitely the time.
4. Calculate your retirement number. Focus on the contribution number that makes the picture achievable.
5. Establish a strategy. Develop a financial and lifestyle plan to achieve the number
6. Arm yourself. Learn about your investment options and then choose the investment, savings and protection tools you need.

Your at-retirement strategy
1. Pre-planning. Cover all contingencies. Make the transition a smooth one.
2. Tax strategies. Convert RRSP and investment income to annuities and RRIFs.
3. Portfolio composition. Remember to apply the concepts of asset allocation and diversification.
4. Creative options. Reverse mortgages, part-time work, expectation adjustment, tax planning
5. Structure. Structure you days and weeks and make your attitude adjustment a reality
6. Close to home? Do you want to live close to friends and family or move to your dream location?

Your in-retirement strategy
1. Budgets. Simplify your life: Map out monthly budget that works for you
2. Integration of income. CPP, OAS, RRIFs, and so on.
3. Taxes. Not just income taxes but gifts and investments
4. Estate Planning. Leave a legacy without leaving half to the taxman
5. Work. To work or not to work

ARM YOURSELF WITH THE INVESTMENT KNOWLEDGE YOU NEED
Accumulate, grow, protect and enjoy


1. Pay yourself first - Saving for your investments (Accumulate)
2. Investments (Grow) - 4 Pillars to investing:
i) Risk
ii) Return
iii) Cost
iv) Time
3. Assets allocation and Diversification - Periodic rebalancing of portfolio
4. Insurance (Protect)
5. Understand the Tax implication (Optimize your return)

Top 10 investment mistakes:
1. Putting all eggs in one basket (Risk with diversification)
2. Putting all your money in safe, incoming-generating investments (Return to low)
3. Chasing performance
4. Procrastinating (Time to grow)
5. Failure to adopt asset allocation (Risk)
6. Misjudging your risk tolerance (Risk)
7. Timing the market (Time to grow)
8. Not knowing what you own (Knowledge)
9. Understanding the impact of compounding, taxes and inflation
10. Not setting quantifiable, realistic goals

10 Strategies to save tax dollars
1. "Buy and hold" - defer tax
2. Maximize RRSP - defer tax
3. Split your income with your family members - lower tax
4. Invest in your home - tax free
5. Dividends - lower tax rate
6. Borrow to invest - deductible tax expenses
7. Maximize RESP - tax at lower rate and receive grant from government
8. Maximize tax deduction - lower tax
9. Maximize employee benefit
10. Employ yourself - more tax deduction

TRANSITION TO RETIREMENT
Prepare a to-do list: travel, music, education, etc
1. Keep your option open - phased in retirement by doing less hours, part time work
2. Reinvent yourself - move to other job or work that is different
3. Take the plunge - start your own business
4. Open your mind - continue education, learn something you like to
5. Help those in need - volunteer to help people
6. Live it up - build a social network and meet new people
7. Delay retirement

HARMONY
1. Estate Planning - begins and ends in a Will


Life is an open road. It is the best story never told. Secret to a happy retirement is to make a big deal out of everything in your life.

To retire well,
1. Invest in making friends.
2. Invest in your health.
3. Invest in safe investment (minimize your risk)

The Rich are different from us
1. They save regularly
2. They live frugally
3. They know where their money is going
4. They avoid debt
5. They maximize income
6. They own appreciating assets
7. They get professional advice