High Net Worth Retirement Planning

Retirement is a very personal decision. It’s not just about age, it’s about how you want to spend your time. Many people enjoy the work they do whether they work for someone else or have their own business. Others look forward to having more time to do new things. It’s important to have a plan about what you will do with your additional time when you retire. It is a huge transition, especially if working brings you enjoyment. Many people are easing into retirement by continuing to work part-time thus enjoying the best of both worlds. Another consideration is financial. Are you preserving your wealth or do you want to continue to grow it? Can you meet the goals you’ve set for yourself, your family and your philanthropic interests? If you want to increase your wealth, you may decide to continue to work longer or work part-time.

The short answer is – now. Regardless of your age, you should be saving and investing for the years you will spend retired. You should also think about what you want to do before then. What do you want to accomplish before retirement? What do you want to maintain or do differently during retirement? As soon as you start working you should consider contributing to a Registered Retirement Savings Plan (RRSP). The contributions help you save for retirement and assist with optimizing your income taxes in each year you contribute. RRSP savings can be placed in a wide range of investments so you can pick the investment type that suits your risk tolerance and life stage.

For each person, the best retirement plan will mean something different. What is important is to have a plan even if it is likely to change over time. Setting a goal for how much you will put aside for retirement savings, how much you will donate to philanthropic causes, and how much your family needs to have the lifestyle you want for them will help you set the stage for a successful retirement. Talk to your BMO Private Wealth professional about your plans and goals so you can work towards the retirement plan that works for you.

As you may be aware, in the year you turn 71, you must convert your RRSP into a Registered Retirement Income Fund (RRIF) or an annuity. Consolidating your RRSP assets with one financial institution can make it easier to manage your retirement income cash flow as you’ll be making withdrawals from just one institution. Talk to your BMO Private Wealth professional to discuss how to manage your investments effectively after the age of 71 to ensure your needs will be met in the long-term.

While fixed income investments (GICs and bonds) can protect your savings, they offer limited growth opportunities. To stay ahead of inflation, you may consider keeping a part of your portfolio in equities to provide the risk and reward balance that is right for you. Speak to your BMO Private Wealth professional for more information on how to preserve and grow your wealth.

Having a frank discussion with your partner before you get married is important. You’ll need to decide which assets you will bring to the proposed union and decide from the outset how you wish to deal with them. Where children and family are concerned, many couples keep their assets separate and apart; this arrangement may be effective, simple, and straightforward. It’s important to have this in writing so everyone has the same understanding. A prenuptial agreement will help to ensure that you and your future spouse know what to expect if the marriage ends.*

* BMO Private Wealth does not provide legal advice. Please check with your legal experts if you require legal advice.