Did you know that the challenges inherent to retirement income planning and asset drawdown will soon lead many households to consolidate their assets within one institution?
PORTRAIT OF OUR CLIENTS – FUTURE RETIREES (part 2)
As noted in July 11th Did You Know article, more than 1 in 5 (21.8%) of Canada’s working-age population is close to retirement, that is, aged 55 to 64[1]. In addition, their main concern about having enough savings to maintain their standard of living stems from the fact that future retirees do not have a comprehensive view of their needs and finances.
Consolidating assets with a single institution, why not with iA?
Many experts recommend consolidating one’s investments with a single institution when approaching retirement. Among the many advantages, your client will be able to obtain a complete picture of their financial situation, which may allow for better planning, more efficient investing and easier tax management.
However, many clients in this age group tend to turn toward banks. Why? The feeling of not being well supported appears to be the main reason.
A proactive approach on your part, such as an increased frequency of contact and personalized guidance, could counter this exodus and instead help repatriate investments held elsewhere.
In addition, by consolidating all of their assets with iA Financial Group, your client may have access to fee reductions that are out of reach if they hold their investments in different locations. Prestige preferential pricing is a good example!
You can play a key role
As your client approaches retirement, you need to establish a robust plan of action, but one that will need to be reviewed over time. The drawdown plan should be part of a larger retirement plan that accounts for your client’s life goals (travel, renovations, financial assistance for children and grandchildren, etc.) and their particular situation.
- Complete the retirement calculator with them. All you need to do is provide the requested information and the retirement simulator will do the calculations.
- Create a realistic budget, both now and in the longer term (period while active and while gradually becoming less active).
- Aim to eliminate debt: A good plan will aim to reduce or completely eliminate debt at retirement.
- If possible, make a drawdown plan that will maximize the assets set aside for retirement by ensuring that the savings last as long as necessary.
- Determine which retirement accounts your client will need to draw on first to save taxes.
The key point to emphasize is that this process is dynamic and will include annual reviews and customized adjustments based on your client’s situation or health status.
REMINDER
To fuel your retirement discussion with your client, feel free to share the my-retirement.ia.ca link in advance.
[1] Source: Statistics Canada, The Daily, April 2022
