With life expectancy increasing, the duration of retirement could be as long as the duration of working life. That's why it's important to plan for this new stage of life as soon as possible, whether you're single or in a couple, with or without children. In this interview, our Advisor, Louis-Charles Lessard, and our Expert Advisor, Pierre-Raphaël Comeau, explain where to start.

Louis-Charles Lessard
Advisor – Quebec branch

Pierre-Raphaël Comeau
Expert advisor, Wealth Management and LBC Financial Services Financial Planner

• What is retirement planning? Why is it important to think about it?
• Retirement planning involves working with clients to develop a game plan to achieve their long-term financial goals, whether in retirement or earlier. How to save? How much? When to save? In which plan? With which investment? These are some important questions that clients will get answers to as part of their retirement planning.
  This personalized plan is very important because it enables clients to keep their goals in sight, to prioritize them and to achieve them without depriving themselves of too many of life's pleasures.
• At what age should I start planning for retirement?
• You should start planning for retirement as early as possible, ideally as soon as you start working. Also, when income grows faster than expenses, you build up a savings capacity that enables you to implement the plan. And the sooner you accumulate money, the sooner the effect of compounding will be felt. You will require less effort to save since it's your savings that will "do the work".
  If the client starts planning for retirement later, there are catch-up strategies that can help, but the savings effort is greater. The advisor is there to accompany clients and help them make the right choices to complete their project. The important thing to remember is that it's crucial to have a plan before and during retirement.
• Will the sources of income in retirement be sufficient to live a peaceful retirement?
• There is no one answer because everyone is different and has different goals. Some people have plans and goals for retirement that will require much more savings, such as a trip around the world.
  Among the income sources available at retirement, there is the Quebec Pension Plan (QPP), the Old Age Security pension, employer funds, the Guaranteed Income Supplement (GIS) for those who qualify and, of course, personal savings. But what is the share of each source? It is expected that for individuals with a gross annual salary of $60,000 per year, the various government benefits will only provide about 40% of the income needed to maintain their lifestyle in retirement. The remaining 60% will have to come from their own resources and those of their employer, if applicable.
• In a couple, is it better to do retirement planning alone or together?
• It is usually recommended to do retirement planning as a couple because it enables you to address both the human and financial aspects. This is one of the major stages of life and you need to discuss it with your partner to ensure that your main objectives are compatible and, ideally, complementary. Tax strategies and benefits should also be aligned with those goals, such as a spousal RRSP when one spouse is in a lower tax bracket than the other. A joint retirement plan is also more realistic for ambitious projects, such as buying a cottage or a house in Florida. However, if the couple doesn't wish to make a joint retirement projection, we respect their wishes and are always there to advise and accompany them by planning for each person separately.
• What is the best disbursement strategy you recommend to your clients?
• Disbursement strategies are unique to each individual and their goals. A good disbursement strategy will enable you to take full advantage of your savings efforts over the years. The most important thing is to respect your goals and desires by minimizing the impact of taxation throughout the different phases of retirement. Indeed, the timing and amount of your withdrawals from your various retirement accounts will have a major impact on your ability to realize your plans.

Your Laurentian Bank advisor is there to help you plan for this new stage in your life. Don't hesitate to make an appointment with him or her today!

Learn more about retirement planning

Laurentian Bank: Laurentian Bank of Canada
RRSP: Registered retirement savings plan
QPP: Quebec Pension Plan
GIS: Guaranteed Income Supplement