FINANCIAL SECURITY VERSUS FINANCIAL FREEDOM
Did you know that Centenarians are the fastest growing age group in Canada? Not Millenials, not Gen Z, and not Baby Boomers. There are incredible implications here, but let’s just consider the impact on you.
So what if you live to be 100? Or older? How does that impact your retirement planning? Let’s see, retire at 65 … that’s potentially 35 years that your retirement savings need to cover! Suddenly financial security looks a whole lot different, doesn’t it?
Usually we write about financial freedom—that’s just way more fun to be thinking about!! But so many of us revisit our financial planning in January and February, it seems appropriate to get a little more serious this week.
Have you done some math? What is your current income? If your goal is simply to maintain that income level in retirement, have you figured out how to do that? You may have a pension, then you may be able to add in CPP and/or OAS benefits. At this point, most people are about half way to their current income level—yup, we’re completely ignoring inflation for now. Next, you can add in your RRSP’s, TFSA’s, or other savings—but wait, you’re dividing those by 35 years?!?! And many people are finding that their RRSP’s haven’t grown and/or compounded anywhere near their expectations. Worse, many Albertans have had to dig into their savings to survive over the past 5 years—and now it’s time to rebuild.
There are a lot of ways to grow or rebuild your retirement savings. A great financial planner is your best starting place.
We also love adding in Real Estate Investments. Even if you are in your 40’s or 50’s, and take 25 years to pay off a mortgage on an investment property—you still might own that property for another 25 or more years of your retirement. Yes, of course, each house will have repairs and maintenance—but they also have tenants and income! Once that house is paid off, it starts to really pay you! Or if you have a number of properties, you can plan to liquidate one every 3-5 years for increased cashflow and strategic tax planning.
If the whole concept of retirement planning and real estate is a little overwhelming—don’t quit! Start with a financial planner and your accountant. Savings, stocks, and pension plans should all be considered (we’ll save inflation for another day’s consideration). And if you want to invest in real estate—without all the work—talk to someone about Joint Ventures. Good partners and good opportunities can create long term wealth for everyone. The hardest part really is getting started. Connect with us at any time to learn more: @MtnEdgeRenovate, @MtnEdgeDevelops.
