As the Baby Boomer generation ages more and more, Canadians are leaving the workplace and retiring. Each day approximately 1,000 Canadians turn 65. It is estimated that about 250,000 Canadians retire each year, and that number is expected to rise to about 400,000 within a few years.
Most retirement tools on the market today are focused on the long-term – helping people who are 20 or 30 years away plan and save for their post-working years. But there is a shortage of resources to help people who are retiring within six to 12 months to transition into this stage of their lives.
“There are lots of resources to get people to plan early for their retirement but there is a definite gap in information for those who are just about to leave the workforce,” says Erica Hiemstra, assistant vice-president, distribution, with the Canadian Life and Health Insurance Association (CLHIA). “This can be a time of fear and intimidation and there are a lot of things people should know about to help make this transition as smooth and successful as possible.”
The CLHIA has put together a website called Retiring Soon? that provides both financial and non-financial information to help people transition from work into retirement. (https://www.clhia.ca/retiringsoon)
“Sometimes people just don’t know where to go for basic information about how to apply for the Canada Pension Plan or for health benefits,” says Hiemstra. “There are a lot of financial and non-financial issues that suddenly come into play as you’re about to retire. This web site is a good guide to help people through the process. It is user friendly, easy to navigate, tries to anticipate all the questions people might have and brings everything together in one spot.”
The best place to start the transition from the workplace is with your employer. Find out about your retirement income and the health and other benefits that you may be entitled to.
If you have a defined benefit pension plan you will be entitled to a guaranteed monthly retirement income based on earnings and years of service. The only thing you may need to know is when payments start.
If, like most people, you have a defined contribution or other type of plan, you will have built up a sum of money and will have to make decisions about converting it into income. Your choices generally are to convert it into a Registered Retirement Income Fund (RRIF) or annuity or both. There’s a link in the web site where you can go to find out what your options are.
You also should find out when your payments start, whether you have income from previous employers, from government programs and from personal savings.
If you have health or other benefits, what happens to them when you retire? Do you have an option to convert your life insurance to a personal plan? Will you supplementary health and dental benefits continue into retirement. Is there a cap on your benefits?
Then there are a plethora of non-financial lifestyle issues such as how you can stay active and connected socially, adapting to change, volunteering, estate planning and organizing your personal information and last wishes.
Retirees can be more susceptible to financial scams and other forms of fraud and the web site has a section on what to look for and government services and benefits should you be victimized.
“Moving from the workplace into retirement can be a daunting process but it doesn’t need to be if you are confident that you’re read to take that next step,” says CLHIA President Frank Swedlove. “Using this new web-based tool can give you that much-needed confidence.”