Retirement! one of the most major life-changing events
It is about being worry-free, right?
You get to enjoy time with your grandkids,
work in the garden,
and finally,
get to watch TV all night long
without worrying being late for work anymore
However! your peaceful retirement could be at risk!
Unfortunately,
a lot of the common retirement advice is misleading.
And you could be making mistakes without even knowing it.
Make sure to watch this video all the way to the end
because I will be going over the TOP 3 mistakes
that could make your retirement uncomfortable.
Pay close attention so you can avoid these from now on
Hey, this is Thomas here!
Your Trusted Advisor!
Before we get into the three common mistakes,
let me address one thing.
You might be wondering,
how is it possible that
so many people make these mistakes?
Or did they even get any advice
on their retirement planning?
The thing is,
everyone’s retirement is DIFFERENT.
We have different circumstances,
goals and expectations.
But most retirement advice out there
follows a cookie-cutter approach.
Banks and advisors want to provide strategies
that fits EVERY circumstance and EVERY expectation…
I’m sure you agree that this is problematic.
It’s how bad advice gets spread
and people keep making the common mistakes.
If you have made these mistakes until now,
it’s not your fault.
You simply didn’t know better.
So, let’s get into the three most common mistakes
and help you set a better course for your retirement.
Mistake #1 – Saving Account is the Silver Bullet!
Yes, you heard that right.
One of the most common retirement strategies
just put everything in a saving account.
No matter how the world fluctuates,
you are guaranteed a return 100%.
Simply No risk at all!
The problem is,
this strategy was great 30 years ago.
Because back then in Canada
a term deposit was 15% interest rate per year.
Today, however,
we are talking about 1% with most of the Canadian banks.
Let me give you a concrete example.
If you had saved $10,000 30 years ago,
you’d get your 15%.
So, after 5 years,
your savings would have grown an additional $10,113,57.
A double of what you put in!
Today, with the same $10,000
and lock it in a term deposit
for 5 years with a 1% interest...
you will only have $510 as your total interest!
Yes, it’s a guaranteed return
but at the same time,
it’s a guarantee LOST due to fees and inflation
Also, what do you think
the bank will do with your deposit.
They can lend it back to others
as a mortgage with 3% - 6% interest rate.
Or they can invest the money into the market.
So either way,
for a bank it makes total sense to promote this.
Because they make money from your savings account.
Yet, even if you have a big savings account,
no one ever teaches you how to take that money out,
how to turn it into an income or how to use it.
They expect you to just know what to do.
That’s why I don’t like this approach.
Now am I saying
you shouldn’t have a saving account at all?
No!
But before you blindly follow a bank's advice,
get clear on your goals.
Visualize your retirement and what you want to do.
Do you want to travel?
See your grandchildren?
Live in a nice home?
Knowing what you want helps you
find the strategy that is best for you.
Mistake #2 - Relying too much on the government
This is a big one.
Did you know?
if you put too much money in your RRSP,
you could potentially earn less government benefits?
It sounds crazy, but here is why:
Let's say you are still making $60,000 per year
because you have rental income,
pension, CPP and OAS
and you have an RRSP account worth $500,000.
Very feasible if you spend 40 years to build it.
At age 71, by law,
it will convert to a Registered Retirement Income Fund
Short for RRIF.
And again, by law,
you are forced to take out at least 5%
this means you add another $25,000
to your existing income.
This also means not only you have to pay more tax
but also your OAS payment is reduced
due to income clawback.
With a higher retirement income,
even if the income is FROM your own savings,
the government will reduce your benefits.
Also according to a study,
for some government benefits such as OAS,
the significance of the benefit payout amount
vs the actual buying power is gradually losing
almost 50% over the next half-century.
This is slowly melting away like a Polar ice cap.
You might not be aware of it, but it is happening!
If you rely too much on the government,
you basically putting a handcuff on your income
and give away the key.
It could cost you your desired lifestyle.
There are strategies you can implement
to maximize your retirement benefits,
such as...
Offset your active income with tax deductions strategies
transferring your taxable income into tax-free income
Or have a plan for a better RRSP exit strategy
But there is no cookie-cutter approach
because we are all different.
The key is finding something
that makes you less dependent on the government.
Mistake #3 - Thinking that nothing ever changes
This is a dangerous mistake
I see too many people make.
The fact is, we live in a fast-paced world
and things do change.
Think about this year!
What just happened?
Saving tactics that worked years ago are obsolete now.
It’s likely that some tactics I talk about today
won’t work in 10 years
What should we do then?
keep yourself in the loop.
Continue to stay informed about what works now.
And The best way to do that
is to smash that subscribe button now!
So you always get the most updated information!
Second,
Thankfully - while tactics change –
the saving strategies,
the core principles will always stay the same.
In fact,
I want to give you 4 key principles to keep in mind.
Make sure to account for your daily expenses
and have easy access to a chequing
and a short term savings account.
Prioritize a secure and comfortable retirement,
that can be done by creating your own pensions,
annuity, and maximize the government benefits
Make sure your money grows
and keeps paying attention to inflation
You want strong diversified investments that beat inflation
Always account for emergencies and health care expense
This can be prepare by having
an 3 – 6 months worth of emergency fund,
having a line of credit pre-approved,
and recheck all your insurance policies
Following these four principles
will keep your retirement safe and secure,
even if things change.
So, remember:
Saving account is not the silver bullet
Don’t rely too much on the government
Thinking that nothing ever changes
will definitely change your retirement life
those are the 3 mistakes I see a lot of people making
because of all the lack of education and updates
Keep in mind that changing your action today
could save better for your retirement!
If you want additional help
want to profit from my insights into retirement strategies,
then I have prepared something for you.
There should be a link down below.
There you will find me dive deep
into some of the retirement problems I see today.
It’s also a chance for you to speak directly to me.
Everyone’s the situation is different,
I take the time to listen and hear your story.
And by using my knowledge and experience,
I can offer ideal suggestions applicable to your situation.
So click the link below
and I will see you in there!