Anokhi Buzz / Buzz: 5 Key Strategies For Generating Retirement Income

Buzz: 5 Key Strategies For Generating Retirement Income

Anokhi Buzz Mar 28, 2017

Regardless of where you live, planning wisely for retirement is a universal concern. Financial advisor Kunjal Mehta from Edward Jones Investments lists his five key tips to save up for your golden years. 

A key element of planning for your retirement is making sure you’ll have sufficient income after you retire. A portion of that income may come from reliable sources like a pension plan, government benefits, annuities and perhaps part-time employment. But beyond those sources, you may be counting on your personal retirement savings.

Most people need to withdraw some money from their portfolio, so having the right mix of investments to generate sufficient income and growth is important.

Here are some tips to help you along the way.

1.  Consider consolidating your accounts. This move can help you gain a clearer picture of your retirement savings and the withdrawal amounts that may be needed from both your registered and non-registered accounts.

2. Plan your withdrawal rate. The amount you withdraw from your portfolio can depend on factors such as your age, your risk tolerance, how your money is invested and your desire to leave a legacy. Everyone’s situation is different, but retirement can last 20 years or more, so an initial withdrawal rate of 4% can be a good place to start. A moderate withdrawal rate allows you to be more flexible because your income needs may rise and fall.

retirement savings
It’s never too late to think about your retirement! Photo Credit: Colourblock

3. Think about your income needs. Your portfolio’s makeup should provide you with an appropriate income. This income can come from Canadian Guaranteed Investment Certificates (GICs) and individual bonds from your country that can help provide a predictable flow of income. This approach is prevalent in the South Asian community because, culturally, predictability and stability are sought after when investing. Some people decide to invest only in GICs because they provide income with less risk. But remember that GICs alone likely won’t provide a return that can keep pace with inflation.

4. Seek quality investments. As for stocks and mutual funds, you should look for a history of paying dividends and increasing them over time — but keep in mind that dividends can increase, decrease or be totally eliminated at any point without notice. Although equities offer more risk relative to bonds, their growth potential can help protect against inflation. To help reduce risk, consider buying quality that you can hold for the long term — and don’t overlook the importance of diversifying your investments. While diversification does not guarantee a profit or protect against a loss, it has proven over time to be an effective investment strategy.

retirement savings
Think about your day-to-day living expenses when you retire to help you plan your budget. Photo Credit: Livemint

5.  Explore all your options. Life annuities and Guaranteed Minimum Withdrawal Benefit plans* may be another option for some of your retirement income. You can customize these options to meet your retirement needs, and you would essentially entrust money to an insurance company in exchange for a guaranteed income stream that will last your lifetime and pay for your necessary living expenses.

Speak with your financial advisor to create a long-term strategy that can help meet your needs today and into the future.

Reported by: Kunjal Mehta, Financial Advisor – Edward Jones Investments. 3621 Hwy 7 East, Markham ON, L3R0G6. Office: (905)947-1165, Mobile: (647)388-1391. [email protected]

Edward Jones, Member Canadian Investor Protection Fund.

* Insurance and annuities are offered by Edward Jones Insurance Agency (except in Quebec). In Quebec, insurance and annuities are offered by Edward Jones Insurance Agency (Quebec), Inc.

 Kunjal Mehta  is a GTA-based Financial Advisor serving the Province of Ontario in partnership with Edward Jones Investments. His vision for his practice is to help clients achieve their financial goals utilizing his skill and knowledge that have been developed over the course of a 10-year career in the Financial Services Industry and Capital Markets Trading.

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