After tax season, one of the things we recommend to our clients is to set aside time to review their tax returns and start thinking about opportunities to improve their tax situations in the months and years ahead.
We encourage them to start making plans to ensure they are using all legal strategies available to minimize or defer taxes. Every dollar saved in taxes can have a positive impact on financial and retirement planning.
But when it comes to retirement planning, a majority of Canadians don’t even know where they stand. Some don’t even realize that saving for retirement is not an option but a must! The reason is simple: once you no longer have a salary, you need to make certain you’ll have enough money to take care of basic needs like food and housing.
From our research and discussions with some of our clients, we’ve found that many people don’t take retirement planning seriously or create a plan at all because
1. They don’t know where to start;
2. They lack knowledge of financial/retirement planning;
3. They think financial/retirement planning is only for the rich and wealthy;
4. They think they are too young or too old to start;
5. They don’t trust financial planners;
6. They think government benefits will be sufficient to take care of their retirement;
7. They think their work pension plans will be enough for their retirement even when they have no idea what the monthly pension income will be when they retire;
8. And, for those who do have a financial/retirement plan, there is no accountability or periodic monitoring to ensure they are on track to a successful retirement.
None of these reasons justify neglecting planning for your retirement, especially not confusion or a lack of knowledge. In a recent article published in the Toronto Star, personal finance expert Gail Vaz-Oxlade explains, "If you don’t know where to start, or if you’ve been putting it off because you’re not sure what-all you need to consider, it’s time to start figuring it out." She concludes, "If you use 'I don’t know' as an excuse, you’re a fool."
Don’t be a fool. No matter your age or your current financial situation, it is critical to do an assessment now and determine where you stand today and what you’ll need once you retire. This assessment will determine the gap you need to address. If you’re unsure of how to begin this process, consider consulting a professional to help. Accountants and tax advisors can show you how to get started and dispel some of these misconceptions about financial/retirement planning.
We can help.
Given our unique position as accountants and tax advisors, we get the opportunity to work with a variety of clients at different stages in their financial/retirement journey. In addition, we have partnered with a financial planner and a wealth advisor to ensure that all aspects of your financial/retirement planning is taken care of.