Posted 1.23.13 @ 12:0 by: Staff

It’s no secret that Baby Boomers are fueling the real estate boom, but it’s important not to put all your eggs into one basket (or more specifically, one house!). It was reported late last year that over half of all Canadians don’t have retirement savings set up – with more and more looking at real estate as a hedge for retirement, it’s important to know that nothing beats a well-managed investment.

Delayed Retirement

More Boomers are delaying retirement not only so they can rack up more money in their account, but so that they’ll have everything in place. More employers and even the government are considering delayed retirement plans to better manage those that are already in the program. But the longer you delay retirement the longer you can keep up with living expenses and sock away more in your nest egg. With life expectancy rising more and more each decade, it’s important to maximise your retirement savings. What one used to get by on for 10 to 20 years of retirement one needs to stretch out for 25 years if they retire at 60.

Managing Risk

More and more funds are looking towards managing risk, which means that some plans that were defined could end up in the murky waters of target benefit plans. Even if you’re an existing member that’s been grandfathered in at the previous rate, nothing may be guaranteed. It’s important to diversify and avoid depending too much on just your pension to get by – invest, expand, explore your options and know what’s right for you.

More Focus on Boomers

With so many of the same generation entering retirement around the same time, there is a greater focus on showing people how to not outlive their money. More emphasis on investing, greater understanding of an ever lengthening lifespan and more “decumulation” products that help borrowers get their money out when they need it. It’s important to watch out for decumulation though, because there can be plenty of predatory lenders out there that are working to deplete your nest egg. Always have a financial advisor and attorney look over anything before you sign on the dotted line.

Bigger Pools are Safer

According to a recently Ontario report, the bigger your pool for your fund is the better you’re going to do. Larger funds are better diversified and there is a better influx of cash. While a smaller fund might see better returns in the short term, more and more people are seeing better long term results with larger funds. Your mileage may vary, but it’s important to talk to your financial advisor about the size of your retirement fund’s pool and how you could make more of it.

Everyone needs to improve their financial literacy, even if you’re not yet near retirement age. Take some time, talk with an advisor, HIRE an advisor if you don’t have one. Managing your future is important!

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