Plan How You Will Spend and Invest Your Nest Egg
As you near retirement, start thinking about how it might feel to live off of your nest egg. (How it feels to spend it will be much different than how it felt to build it!) Just as important, now is the time to try living on the amount of money you think you'll need in retirement.
Here are some ways to get started:
- Think about how you want to spend your retirement.
One of the best ways to determine how you will feel about using your nest egg is to define your priorities and what you want to achieve during retirement. For example, do you want to relocate to enjoy a more care-free lifestyle? Or, do you want to work on a part-time basis to continue bringing in some employment income or to keep some of the satisfaction you enjoyed from your job?
However you envision your retirement, when you give some thought to how you want to spend your nest egg, you'll know you're putting all your years of building it to good use.
- Make sure you have enough to achieve your goals.
As you start to transition into retirement, it's smart to look at your budget as though you have already retired. By doing this now, you can get an idea of what it will be like to live off of your nest egg. You'll also have more time to make adjustments in your investment strategy—to ensure that your savings can provide you with the retirement lifestyle you’ve been planning for.
Our Retirement Cash Flow Calculator can help to clarify your financial picture and guide your conversation with an RBC advisor.
If you're not going to be ready to give up your employment income, then consider working a few extra years, negotiating with your employer to reduce your hours, or finding another lexible way to continue earning some employment income. And be sure to keep paying yourself first by maximizing your RRSP contributions and exploring other tax-efficient investment solutions like the new Tax-Free Savings Account coming in January 2009.
- Continue viewing your nest egg as your investment portfolio.
Another way to successfully use your nest egg is to continue thinking of it as your investment portfolio. You've invested well to get this far—you can still use those successful principles and apply them to fit your new risk levels.
Remember that your goal is to have your money carry you throughout your lifetime. That means changing your investment strategy, not your lifestyle! Creating an investment plan with an RBC advisor can help you to make that happen.
Achieve Your Retirement Goals
With the right planning and the help of an RBC advisor, you can create a retirement plan that fits your life.
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