Maximize Your Retirement Income

Aoife O’Reilly

Over 1,100 Canadians celebrate their 65th birthday every day. Research shows that people are living longer, which means that you will likely be a retiree for longer than your parents or grandparents were. How can you save enough for retirement?

Canadian retirees spend an estimated $2,400 per month on expenses such as housing, electricity bills and groceries. Government pensions and benefits are simply not designed for the rising cost of living. This article will explore different ways for retirees to maximize their income and enjoy the same quality of life that they had on a monthly salary.

Private pension plans are an excellent means of boosting retirement income. A Registered Retirement Savings Plan (RRSP) and a group retirement plan help you save a set amount each month for your retirement years. In the past, people had the same job for 30 or 40 years and then retired comfortably on a company pension. A worrying trend in recent years is that less and less people have pension plans – only 46% of Canadians have a retirement plan in place.

At Open Access, we specialize in group retirement plans because we believe every Canadian deserves to retire well. Investing in a retirement plan ensures that you do not outlive your savings. When you participate in a group retirement plan, you benefit from lower and more competitive fees due to the number of plan participants. It’s a cost-effective way of growing your savings and preparing for retirement.

How can you maximize your income as a retiree? Tracking your expenses is an excellent way of seeing what you spend money on the most and whether you can cut back on any unnecessary expenses. Break down your expenses into categories such as medical, groceries, transport, utilities and entertainment. Is there a subscription that you’re paying for that you never use anymore? Download our Expenses Worksheet here to help you keep track of all your essential and discretionary expenses.

Most of your retirement income is taxable, including the Canada Pension Plan (CPP), Old Age Security (OAS) and company pension plans. Any source that adds to your income, such as rental properties, is liable for tax. You can reduce the amount of taxable income by planning which asset you wish to draw from first. A financial expert can advise on the best strategy for withdrawing from your income sources. Taking advantage of withdrawal strategies will help maximize your retirement income.

There are many tax breaks that you can benefit from during retirement, depending on your province. These include the home accessibility tax credit, the disability tax credit, the medical expense tax credit and the pension income tax credit. If your pension income is $2,000, you can claim a tax credit that will reduce tax owed on that income by 15%. An accountant can provide insight on the federal tax breaks and deductions that apply to you. It is worth learning more about tax breaks and the best time to utilize these.

Reaching your retirement goals is easy when you plan ahead and learn about all the options that are available to you. Do you have questions about your group retirement plan with Open Access? Simply reach out to our friendly client relations team by emailing inquiry@openaccessltd.com or by phoning 1 – 866 – 625-4777. Our goal is to help you achieve your financial goals and retire well. You deserve it.