Practice Management: Great Opportunities Await in Three Retirement Phases

With tax season largely behind us, energetic business builders in the tax and financial services industries will be interested in pursuing their next great revenue growth opportunity immediately: tax-efficient retirement income planning.

Canada has the largest and most sustainable baby boom generation in the world, and they are starting to transition out of their work life. But they need your help to do it strategically, in the most tax-efficient way.

In fact, nearly one in three Canadians is now a baby boomer (born between 1946 and 1965), which is 27% of Canada’s population. Still, ours is the second-youngest population¹ overall among the Group of Eight major industrial countries. There is much to learn from those that have already begun retiring in other countries, including the fact that many people in the USA, for example, have been unprepared for the tax consequences of retirement.

Moreover, retirement planning, done well, requires a multi-generational approach. “The right amount of money must be saved in the right investment vehicles to get the right income results in retirement,” says Evelyn Jacks, President of Knowledge Bureau and keynote speaker at the upcoming Distinguished Advisor Workshops on the subject Tax Secrets in Retirement and Estate Planning. “Tax and financial advisors who can engage the family in three phases of planning will get the best overall income results while preserving capital for future uncertainties.”

There is a tremendous opportunity in engaging clients in all three stages of retirement planning:

• PHASE 1 - PRE-RETIREMENT: The millennials are in the sweet spot for pre-retirement planning. With a longer time horizon, saving deliberately in registered and non-registered investment accounts will help them build an impressive future nest egg.

• PHASE 2 - IN RETIREMENT: While the boomers are the generation in focus for both retirement income planning and post-retirement or estate planning, Gen X is in the sweet spot for retirement planning. Both these generations can benefit from longer income averaging and income splitting time frames to reduce taxes on retirement income sources. Waiting too long, however, can thwart these opportunities and cost the family significantly in unnecessary tax erosion.

• PHASE 3 - IN POST-RETIREMENT: Canadians have a hard time wrapping their head around this phase, which requires planning deliberately for disability, death and beyond—and the best time to do all of that is when you are healthy. The elderly (71 and older) are a significant demographic for tax-efficient retirement planning, which includes tapping into government tax preferences for disability support. Remember, for the very elderly, the key causes of death are: cancer, diseases of the heart, and accidents. Their health can change quickly, so helping to facilitate preparedness for powers of attorney and executors plays an important role in Phase 3. Tax and financial advisors can be of significant assistance here.

Please join us in learning much more about tax-efficient retirement income planning skills at the Distinguished Advisor Workshops in Winnipeg, Calgary, Vancouver and Toronto later this month. It’s a practice growth opportunity you’ll want to embrace as you continue to help your clients throughout 2016. To register call 1-866-953-4769 or register online today. 

¹Most recent Canadian census

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