Planning for your retirement - Servus Credit Union

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Here’s WhereRetirement Income GoesEstimate Your Monthly Cost of LivingBudget Need:(excluding savingsand income taxes)Food:(including meals out)Housing:(utilities, rent/mortgage, furnishings,property taxes,maintenance,homeowner’sinsurance)Transportation:(gasoline, autoinsurance, licence,maintenance, publictransportation)Clothing & PersonalCare: (dry cleaning,cosmetics, toiletries)Medical Care:(drugs, dental, healthinsurance, othermedical expenses)Entertainment:(recreation, books,magazines)Other Items:(gifts, donations,life insurance)TOTALS$MonthlyNeedNow$AnnuallyNeeded inRetirement$Monthly$AnnuallyPLANNING FOR YOUR RETIREMENT 5
Strategies for SavingWithout a definite savings strategy, most people find itdifficult to save. The trick is to build saving into your budget,rather than leaving it as an afterthought. If the cash has away of disappearing before it reaches your savings account,try a payroll savings plan so that the money can’t take adetour. Make sure you’re realistic about your savings budget– if you aim too high, you’ll soon find your good intentionsare unworkable.You can earn the best return on your money by followinga few basic techniques:• Channel all idle money into a savings account that willearn interest, even if only for a few days or weeks. Forexample, if you make monthly mortgage and car loanpayments, keep the funds in a daily interest savingsaccount and transfer them to chequing just before yourpayments are due (check first to make sure transfer costsdon’t apply). Or use a chequing savings account.• Transfer savings that won’t immediately be needed fromyour regular savings account into higher-paying termdeposits or a high interest savings account. To coveryourself in emergencies, stagger the maturity dates of theterm deposits so that one is always coming due shortly.The cornerstone of many retirement savings strategiesis to put your savings into a registered retirement savingsplan (RRSP).RRSPs are designed specifically to help you save for yourretirement. Qualifying contributions made to an RRSP canbe claimed as a tax deduction. No tax is paid on the interestand other income earned from these contributions untilthe funds are withdrawn. At retirement, the funds held inyour RRSP can be converted to your own personal pension.This pension can take the form of a Registered RetirementIncome Fund, Life Annuity or Term Certain Annuity. Forfurther information about RRSPs, refer to the credit unionbooklet: Understanding All The Basics – RRSP, RRIF,ANNUITY, LIF, LRIF.Another retirement savings vehicle is the Tax-Free SavingsAccount (TFSA). This registered product has been availablesince 2009. Unlike RRSPs, the contribution limit is not tiedto your income and the contributions are not tax deductible.Interest and other income earned on the contributionsaccumulate tax-sheltered. A withdrawal of contributions and/or income is not taxable. For further information, contactyour credit union or refer to the credit union leaflet: Tax-FreeSavings Account: A Fresh Approach to Your Savings.6PLANNING FOR YOUR RETIREMENT
Page 4 and 5: How to Begin PlanningThere are thre
Page 8 and 9: Savings ultimately are not only a s
Page 10 and 11: Match Your Investments to Your Obje
Page 12 and 13: Worksheet for Planning Your Savings
Page 14 and 15: Old Age Security (OAS)People 65 and
Page 16 and 17: Disadvantages of This Kind of Plan
Page 18 and 19: Personal Pension Plans -RRSPs and M
Page 20 and 21: Term Certain Annuities to Age 90 (T
Page 22 and 23: Some Tax ConsiderationsRRSPs, RRIFs
Page 24 and 25: Planning for Retirement LivingWhere
Page 26 and 27: • If you’re married, consider d
Page 28: ® HANDS & GLOBE Design is a regist

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