Outline for investors in late retirement

The following outline is provided as an overview of and topical guide for investors in late retirement.

This last part of retirement is less active than the first one; for most people, the switch occurs sometime during their 70s.

This article is intended to help a reader learn about a subject quickly, by showing what topics it includes, and how those topics are related to each other.

The financial life cyle
Investors in late retirement are continuing the decumulation phase of the financial life cycle. They may, or may not, wish to leave an estate.



Housing-related and lifestyle choices

 * Review your housing situation: have your needs changed?
 * Is it time to visit assisted living facilities to see what the options are?

Estate planning

 * Update your will
 * Update your power of attorney document(s)
 * Communicate your estate plan to your loved ones, in particular your executor

Retirement income management

 * Are you using the conventional retirement planning approach or the safety-first approach?
 * Review your overall decumulation strategy:
 * Don't forget to claim Canada Pension Plan, Québec Pension Plan, Old Age Security and the Guaranteed Income Supplement (if eligible)
 * Draw on employer pension plans or group retirement plans
 * Withdraw at least the minimum from your RRIF every year
 * In which order should your various investment accounts (non-registered, Registered Retirement Income Fund (RRIF), Tax-Free Savings Account (TFSA)) be spent?
 * Which withdrawal method are you using for your portfolio: constant amount, variable percentage, conversion to annuities, a combination... Is your strategy sustainable?
 * If you have a long life expectancy, and/or not much guaranteed retirement income, consider whether annuities could help with managing longevity risk
 * If this seems too complicated, consult a financial planner

Investing

 * Refresh your knowledge on portfolio design and construction and see if you should revise your portfolio
 * In particular, review your asset allocation, taking into account risk and return; is it time to get more conservative? Or, given bequest motives, perhaps more aggressive?
 * Do you need an allocation to cash, in addition to fixed income and equities?
 * Look at simple index portfolios or asset allocation ETFs if you want to simplify your affairs
 * Rebalance your portfolio regularly
 * Update your investment policy statement
 * If you don't want to do DIY investing anymore, consult a financial advisor

Tax planning

 * Look at Income splitting opportunities
 * Think about the tax efficiency of your investments
 * Utilize unused and new TFSA contribution room to shelter investments from tax

Insurance

 * Review the types and general principles of insurance
 * Home owners need home insurance and possibly title insurance
 * Renters need tenant insurance
 * Evaluate if your life insurance needs have changed

Banking, emergency fund

 * Investigate low-cost banking packages for seniors
 * Check that your emergency fund is sufficiently large

Credit and managing debt

 * Check your credit report regularly to protect yourself from fraud
 * Manage your credit card(s)