My Finances

Whew! You've just retired and life is not like it used to be! Now you also have to carefully manage the money you've worked so hard to save all these years. Here are some tips that will help give you some breathing room and keep your future looking bright.

• Once you've retired, re-do your investor profile to verify your level of tolerance for risk as well as your comfort level with certain investments.
• Realistically evaluate the lifestyle you wish to maintain, also taking into account your desire to leave an inheritance to loved ones.
• Think about splitting your income with your spouse to reduce the amount you pay in taxes.
• Analyze the value of dividing your Québec Pension Plan (QPP) or Canada Pension Plan (CPP) pension between you and your spouse. Certain conditions apply.
• Be mindful of the taxation level of your investment income.
• Conserve your capital as much as possible so that it will be there as long as you need it.
• Avoid unnecessary debt by making a budget and sticking to it.
• Withdraw non-registered savings first and put off paying taxes on your RRSP funds for as long as possible.
• Maximize the use of your tax-free savings account (TFSA).
• Make sure you claim all tax credits (personal, age, pension income, etc.) and deductions (RRSP, medical expenses, etc.) to which you are entitled.

In what order is it generally recommended to withdraw your savings?

• Non-registered savings
• TFSA
• Life Income Fund (LIF) - Québec, Ontario, New Brunswick, Federal
• Locked-In Retirement Account (LIRA) - Québec, Ontario, New Brunswick, Federal (automatically converted to a LIF if withdrawal is necessary)
• Registered Retirement Income Fund (RRIF)
• Registered Retirement Savings Plan (RRSP)
• Fixed-term annuities

To ensure that you have sufficient income during retirement, ask your financial planner1 to do a computer simulation for you, which will give you a better idea of how your earnings and withdrawals will evolve. That way, you'll be able to evaluate the relative importance of your income sources over time.

1) Within Desjardins caisses, the financial planner acts on behalf of Desjardins Financial Services Firm Inc.