Be accompanied
Many people are skeptical of all the advertising from financial institutions around the need to be supported by a financial planner to grow one’s assets for retirement. They fear high costs and doubt the effectiveness of these planners. What would you say if it was an experienced, independent research group advising you to do this? Sophie Paquet, senior advisor at Financière Banque Nationale, recalls that the Interuniversity Research Center for Organizational Analysis (CIRANO) published a comprehensive report in 2016 demonstrating that the advisory role, despite the associated costs, provided savers with oscillating added value. between 2.7 and 3.9 times, depending on stock market conditions. It is by helping savers to maintain good discipline that planners enable them to achieve their objectives, according to CIRANO.
The human aspect
To make preparing for your retirement not only more effective, but also more enjoyable, first focus on the human aspect of things, explains Noémie Sauvageau, financial planner at Dumais Sauvageau Garon, a financial planning firm in Rivière- the wolf’s. With her clients, she first fills out a notebook in which their tastes, their passions, as well as their retirement goals are noted. “Establish your short, medium and long-term life plans and, above all, talk about them to those around you and your advisor,” she says. Then determine when you would like to retire. Then measure the costs involved and the accumulation of savings required.
PHOTO PASCAL RATTHÉ, SPECIAL COLLABORATION
Sophie Paquet, senior advisor at National Bank Financial
Longevity, inflation and stock markets
The figures for life expectancy have changed a lot. It is estimated that, for a couple currently aged 60, one of the two spouses will live until 94, notes Sophie Paquet. And that’s without taking into account inflation. The period we have been going through over the past year reminds us that changes in economic conditions, even temporary ones, modify what the cost of living will be in retirement. The financial resources needed to face this new stage of life are therefore much higher today than 10 or 20 years ago. “You have to protect your purchasing power by investing in assets that will ensure wealth growth,” she says. In the long term, despite sometimes difficult times, the stock markets have achieved average annual returns of 9%, she recalls.
Budget and debt control
When you retire, you need to have a well-established budget and as little debt as possible, explains Noémie Sauvageau. “And why not use the last three or five years before we get there to apply this discipline right away? “, she says. This involves measuring the anticipated cost of living in retirement, applying it now to your budget and seeing what you have left in savings. This will allow you to realize whether everything will work when it comes time to retire and eliminate the stress that uncertainty can create. We must also reduce, if not eliminate, debt. “Be careful, among other things, with open credits such as lines of credit,” says M.me Savage.
Take advantage of free money
As you approach retirement, you will be in a better position if you took advantage of the free money available to you, explains Sophie Paquet. “During the years of accumulating savings, look for these opportunities,” she says. For example, in addition to taking advantage of registered savings plans, don’t forget about education savings programs, as well as your employer’s programs if this situation arises. “Good opportunities to accumulate savings are also available if you have the financial means to delay the moment when you decide to receive your government pensions, such as benefits from the Quebec Pension Plan (QPP),” adds Noémie Sauvageau .