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To set clients up for success, advisors should consider educating them about financial literacy and ask questions to gauge their familiarity with holistic retirement planning.LumiNola/iStockPhoto / Getty Images

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Now that the registered retirement savings plan (RRSP) contribution deadline has come and gone, many Canadians may be tempted to put their retirement planning on the backburner. They made their yearly contributions to invest in their future. What else is there to do?

Well, quite a lot actually. While an RRSP plays a critical role in retirement planning, it’s not the be-all and end-all.

The RRSP has dominated the retirement narrative since its inception more than 60 years ago, with Canadians embracing it as the primary vehicle to invest and save for their golden years. In fact, almost two-thirds of Canadians report having an RRSP account with an average amount of $133,000, according to a recent IG Wealth Management survey.

However, the findings also suggest most Canadians have not thought beyond their RRSP when planning for retirement and remain unsure about other financial factors – including how they’ll be taxed, monthly budgeting, insurance needs, and estate planning considerations.

The reality is that many Canadians are woefully unprepared for life after retirement.

Without a comprehensive approach to retirement planning, they’re more likely to make mistakes when it comes to withdrawing money, paying down debt, or managing finances in a tax-efficient manner.

To avoid these issues, financial advisors need to work with clients on all elements of their lives to develop a holistic plan that considers all aspects of a client’s retirement.

This holistic approach includes tax planning, insurance and health care needs, budgeting, housing, estate planning, and facilitating discussions so everyone in the family is on the same page.

For example, retirees might be surprised to learn how their investments and their different income sources will be taxed in retirement. Without an effective tax strategy in place, that could eat into their available income significantly – and its sustainability.

There are other considerations as well.

What will be their main sources of income? What kind of insurance will they need? How will inflation affect their fixed income? How long do they want to remain in their home? What are their retirement expenses, both non-discretionary and discretionary? Do they want to leave money to their family? And the list goes on.

As daunting as these questions may appear, a good advisor will be able to help clients navigate these and any other questions that might come up as they work together to build a comprehensive retirement plan.

Not only is it the right thing to do for their clients, but advisors will also benefit by demonstrating their value and commitment to a client’s overall financial well-being.

How to make clients think differently about retirement

To set their clients up for success, advisors should consider educating them about financial literacy and ask questions to gauge their familiarity with holistic retirement planning.

That can motivate clients to start thinking more seriously about retirement plans.

It’s also important to encourage clients to envision what their ideal retirement looks like before working on a plan for them. For example, where do they want to live? Do they want to travel? What kind of lifestyle would they like? From there, work with them to determine spending needs and retirement income to reach their goals.

Once the client is more familiar with the different aspects of retirement planning and has set out goals for the future, begin building a financial plan with them that includes retirement expenses, different sources of income, creating a will, taxation and inflation considerations, and potential risks to income.

Collectively, advisors need to take the lead in changing Canadians’ perspectives on planning for retirement to achieve their financial goals.

We need to change the narrative from just saving for retirement to saving and planning for retirement; and we need to explain to clients how they can benefit from that.

RRSPs are important, undeniably, but there is so much more that needs to be done. Helping clients develop well-rounded financial plans can prepare them for everything life throws their way during their golden years.

Damon Murchison is president and chief executive officer at Winnipeg-based IG Wealth Management.

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