Top 10 Retirement Planning Questions

What’s a detailed, tax-efficient retirement income projection worth to your clients? A lot of peace of mind, especially if they are interested in continuing to build their net worth in retirement and beyond, while reducing their frustration with high taxes on private pension income.

The increased financial freedom that comes with knowing the purchasing power of their savings is protected is priceless, but your clients may need some help from you, as a specialist in the area, to get there.

Do concerned pre-retirees want to pay for advice on structuring their retirement affairs? Yes, but only if their advisor is ready to answer their most pressing questions, says Alan Rowell, MFA, DFA-Tax Services Specialist, and president of The Accounting Place.

“Specialists will want to test and consolidate their knowledge of tax-efficient retirement income planning, then focus on meeting with concerned clients before tax season ends," Rowell says. "Especially with recently announced federal and provincial tax changes, this can be a lucrative opportunity for both parties before the hazy days of summer are upon us.”

Clients who seek retirement income planning services should also do some homework, to make sure they are receiving the most from every dollar they spend on professional advice.   Suggest new questions to discuss in the family, especially related to the averaging of private retirement income sources.

It always helps to have your clients list their top three or four most burning questions, especially if they don’t quite understand the new rules. These are the questions that matter the most to them. The answers that you help them with will confirm decisions that need to be made about their retirement income and subsequent investments throughout this important period.

Embellishing on the conversation as a tax efficient retirement income specialist you’ll want to be in a position to expertly answer the  top questions asked by Canadians. 

Financial advisor Kevin Gebert, MFA, CFP, author of the book Financial Fotographs, published by Knowledge Bureau, recently compiled a list for Knowledge Bureau Report, worth repeating so that families can take this opportunity to talk to their advisors about money in the important retirement transition period.

The Top 10 Retirement Planning Questions for Clients and Advisors to Discuss:

1. Should I sacrifice my RRSP contribution and make a TFSA contribution instead?
2. Should I pay off my mortgage before making any more contributions to retirement savings plans?
3. How much should I have in my RRSP before I may have too much?
4. Should I redeem any RRSP accumulations prior to age 71 if I retire at an earlier age?
5. Should I take benefits from my CPP early, or delay them in favor of redeeming other private pension accumulations first?
6. What is the real after-tax dollar value of splitting my CPP with my spouse?
7. Will we have more income if my spouse takes CPP benefits early and I defer my benefits?
8. How can we plan most effectively if my spouse has a defined benefit pension plan and I don’t?
9. What tax bracket should I plan to stay in when withdrawing income in retirement?
10. Assuming I wish to travel in the first 10 years of my retirement, how much should I invest on an annual basis at current rates of return if I need $75,000 after tax each year?

Client Alert: A knowledgeable retirement income planning specialist will be able to run the numbers for you to help you understand how much to save and how much to withdraw to meet your wants and needs . . . after tax.

Advisor Alert: Your clients may have an entirely new set of questions, priorities, and concerns as they face drawing income from the assets they have spent most of their lives accumulating. In order to stay current with their emerging issues, and to add real value as a trusted advisor throughout their retirement, you’ll need to know not only what new questions are keeping them up at night, but also the answers and strategies that will give them peace of mind as they plan their retirement income.

Be sure to initiate the conversation with them soon.

Additional Educational Resources:  MFA-Retirement Income Specialist Designation Program and Master Your Retirement by Douglas V. Nelson.  Shipping is free when ordered through www.knowledgebureau.com