Growing Your Money Was Only Half the Job

For most of your working life, the goal was straightforward: save consistently, invest wisely, and build your wealth over time.

Retirement changes that goal.

Once the paycheques stop, your investments have a new job. Instead of helping you accumulate wealth, they now need to provide a reliable income that can support your lifestyle for decades.

Many retirees continue to focus on investment returns, but returns are only part of the equation. The bigger challenge is turning your savings into a retirement paycheque. Decisions such as when to start CPP and OAS, how much to withdraw from your RRSP or RRIF, and which accounts to draw from first can make a meaningful difference over the course of your retirement.

One of the biggest risks retirees face is something called sequence-of-returns risk. Put simply, if markets decline early in retirement while you’re making withdrawals, the damage can be much greater than experiencing those same declines later. Selling investments after they’ve fallen means less money remains invested to benefit when markets recover.

That’s why retirement planning is about much more than choosing the right investments. Having a plan for where your retirement income will come from, maintaining an appropriate cash reserve, withdrawing money from the right accounts at the right time, and managing taxes all work together to help your portfolio last longer and reduce the impact of market volatility.

For many retirees, I believe it’s important to have several years of planned income set aside in cash, GICs, or other lower-risk investments. Having this cushion can reduce the need to sell long-term investments during market downturns and allows the equity portion of your portfolio more time to recover.

One mistake I see from time to time is retirees managing their investments the same way they did while they were working. During your working years, the focus is naturally on growing your portfolio. In retirement, the focus shifts to generating dependable income while making your savings last as long as you do.

The good news is that retirement income planning doesn’t have to be complicated. With a thoughtful strategy and regular reviews, you can create a retirement income plan that supports your lifestyle, adapts as your needs change, and gives you confidence that your savings can continue working for you.

Growing your money was only half the job. The other half is making sure it can provide the income you need throughout retirement.

Why do we plan?

Knowing where you are translates into knowing where you're going, and we hope to provide every client with the trust and confidence to navigate through the waters of their financial lives.

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