Planning for retirement in the time of COVID-19
When planning for retirement, you may base your plans around what you normally expect to happen each year. However, 2020 was anything but normal. Due to the pandemic, some within the teaching community have delayed their retirement decision, whereas others are retiring early.
No matter where you are in your retirement journey or how your plans may have changed, the basic principles of planning for retirement stay the same. Here are six tips on how to plan for retirement.
1. Imagine your retirement lifestyle
Although traveling and social activities are limited due to the pandemic, eventually things will open again. Think about how you’ll want to spend your time during your retirement.
Do you hope to travel, settle down in a new spot, invest in a hobby, learn something new or join a community sports league? Do you have activities you can do year-round? Research what you want to do and how much it will cost so you can work your priorities into your retirement plan.
2. Think about who you are
Some of us define ourselves as our occupation, which can make retirement challenging. If your self-worth is intertwined with your work, try to shift your focus – instead of thinking about what you’re retiring from, think about what you’re retiring to. Start doing some of your retirement activities before you retire. This can make the transition to retirement easier and can help you to figure out what activities are a good fit.
3. Budget for your lifestyle and start saving
Budget for the money you’ll have access to through your savings, non-registered and registered investments and work pension plan. In retirement, you may also receive the Canada Pension Plan, Old Age Security and Guaranteed Income Supplement as well.
Balance this income against your expected expenses, factoring in medical costs, dental treatments, home/auto repairs, unexpected expenses, housing costs and others. This will give you an idea of how close you are to your pre-retirement savings goal.
The Financial Services Commission of Ontario and the Canadian Financial Consumer Agency have several calculators and tools to help you determine your retirement income and budget.
If you fall short on your pre-retirement savings goal, you may need to cut back on your expenses or consider your options to save more before retirement. Before you retire, try living within your set retirement budget and decide what works best for you.
4. Work on paying off your debt
Paying interest on debt will eat away at your retirement savings. If you’re not sure which debts to prioritize, consider talking to a financial advisor who can help you. Debt.ca has advice and calculators to help you determine how long it will take to pay off your debt.
5. Research your insurance options
You will need insurance to help cover your health and well-being needs. Research your options for health, dental and vision care plans, as well as prescription drug coverage and travel insurance that will support your retirement needs. Learn more about the three health plan options available from OTIP’s Retired Teachers Insurance Plan (RTIP).
It’s also important to consider a life insurance plan that can help provide for your family, pay off your debts and cover estate settlement costs at the time of your death. OTIP has a variety of flexible life insurance options to suit your needs.
6. Listen to a retirement planning webinar or podcast
Planning for retirement can seem daunting, so why not get advice from an expert? OTIP offers a free retirement webinar workshop, where you can get an in-depth overview of the health, dental and travel insurance coverage we provide.
Some OTIP retirement webinars also cover financial planning topics, such as tax and estate planning and RRSP and investment preparations with Educators Financial Group. These webinars have “financial planning” listed under the topics to be discussed section of the webinar schedule. View the webinar schedule and register online.
For retirement information on the go, listen to OTIP’s “Walk into retirement with a plan” podcast series. Episodes cover topics on retiree health insurance, travel insurance, lifestyle planning and home and auto insurance. Listen to the podcast on our website or your favourite podcast app.
If you have any questions about health and dental insurance plans, please contact a Life and Living Benefits Representative at 1-800-267-6847 or visit RTIP Health and dental plans for more information. If you are an OSSTF member, visit the ARM website for details about the health and dental insurance plan available to you.