John Labunski retirement-planning

John Labunski -Four Essential Elements of Retirement Planning

Until recently, many retirees relied on three established sources of retirement income: a defined benefit pension plan that guaranteed income for life, their own savings, and the Canada Pension Plan. Over the past twenty years, the first of these sources has almost disappeared and many defined benefit plans have been replaced by defined contribution plans. This change placed the responsibility of creating a source of retirement income on the shoulders of future retirees. With the increase in life expectancy, the cost of retirement is on the rise and one must take retirement planning seriously to ensure that one’s income covers the rest of one’s life. Here are the four essential elements of good retirement planning:

Set clearly defined goals

As life expectancy increases, it is no longer enough to simply set a goal of retiring at 65. To have a well-designed plan and find the will to follow it faithfully, you need to have a clear vision of your retirement life.

  • Do you plan to be completely retired, or would you like to work in another field?
  • How will you live in retirement?
  • Where will you live?
  • What do you want to accomplish?

As you get closer to your retirement goal, your vision will become clearer and more focused. Over time, your retirement goal will become the benchmark for your s and will guide your decisions based on where you are in relation to your goal.

Calculate the cost of your retirement

According to John Labunski the most popular rules, retirees would only need 70% to 80% of their pre-retirement income to maintain their standard of living. However, the main flaw of this rule is that it does not take into account the true cost of aging. Calculating the cost of retirement has become more difficult due to the increase in life expectancy. This new reality can mean rising costs for health care or assisted living. To calculate the cost of your retirement, you need to make realistic assumptions about your expenses, based on your goals and the lifestyle you want to lead. You also need to factor in health care costs and set aside an amount for unforeseen expenses.

Once you know the cost of your retirement, you will be able to better calculate how much you will need in retirement. This amount could become your savings goal.

Develop a long-term strategy

Accumulating enough capital to secure a lifetime income is a daunting task. This is all the more difficult as the current economic context is marked by low returns on savings and increased stock market volatility. A serious long-term strategy is required and one must show confidence and discipline and follow the plan. This strategy begins with establishing a specific objective. This may be, for example, the return you need to achieve to meet your capital needs.

The next step is to determine your risk profile. This will allow you to choose an portfolio that matches your risk tolerance and is likely to achieve your goal. To do this, we design an asset allocation plan that combines different types of s whose correlation is variable. Then, thanks to a wide diversification of your asset classes, you can reduce the volatility of your portfolio and obtain a more stable return over the long term.

Consider tax diversification

For decades, we’ve been taught that tax-deferred savings vehicles like (ERISA) are the best way to accumulate capital for retirement. While these instruments are still a sensible choice for accumulating capital, this strategy does not take into account the tax implications of withdrawals for income purposes and their effect on total disposable income in retirement. In the past, retirement planning relied almost entirely on capital accumulation. Now that one can live 30 years or more as a retiree, the focus has shifted to income management during retirement. If your only source of income is an Employee Retirement Income Security Act (ERISA), your income will be taxed as ordinary income. By diversifying your sources of income,


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