FEATURE
The Retirement Savings Gap: Are Canadian Retirees at Risk?
Are Canadians’ retirement plans in a state of crisis? Given a worldwide pandemic, low yields and extreme market volatility, many Canadian retirees may find themselves running out of money prematurely. This "retirement income gap" could mean the difference between thriving and just surviving in their golden years.
The Canadian retirement savings gap
How many years a senior might outlive their money:
Source: Financial Post, Retirees worldwide may run out of money 10 years before they die, report shows, June 2019
Longevity Risk: The Fear of Running Out of Money
More and more retirees are growing concerned that they'll outlive their retirement savings. A premature depletion of assets could force retirees to slash their living expenses or be unable to fund their long-term healthcare costs. Many of those now in retirement (or on the cusp) are already forced to consider a change to their current lifestyle.
Top concerns for retirees:
Concerned they will outlive their assets
Not confident they'll be able to afford post-work lifestyle
Not having enough money for necessities
Rising health care costs
Source: Benefits Canada, “Canadians worry about outliving retirement savings: surveys”
Key Considerations: Remember the “4 Ms”
Taxes, inflation, market swings and untimely drawdowns can all wreak havoc on your nest egg. By focusing on the 4 Ms, you can build more resilient portfolios designed to deliver a consistent cash stream – through bull and bear markets alike.
With Paycheque Portfolios, the focus changes to:
Maximize Cash Flow
By focusing on income-producing assets, investors can create consistent cash flow in order to avoid withdrawals during market downturns.
Minimize taxes
Building a resilient paycheque portfolio requires a special focus on maximizing after-tax cash flow. After all, it’s not what you earn, it’s what you keep.
Minimize the impact of drawdowns
Focusing on cash flow can help reduce the impact of drawdowns, which can quickly erode a portfolio’s value.
Maximize purchasing power
To protect one’s purchasing power – especially during inflationary periods, it’s critical to allocate a portion of one’s portfolio to asset classes and strategies designed to deliver positive inflation-adjusted returns over time.
Introducing the Dynamic Retirement Income Centre
Filled with informative articles, podcasts, videos and more, the Dynamic Retirement Income Centre was created to help advisors and investors build retirement income portfolios to last a lifetime. With this mission in mind, we've centred the content around the four most important retirement considerations: maximizing cash flow, minimizing taxes, maximizing purchasing power and minimizing drawdowns. We encourage anyone worried about outliving their assets to visit the centre and learn more about the range of Dynamic solutions designed to help retirees live their best life.
For more information visit our website
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