If you think managing your TFSA and RRSP is a handful, just wait until retirement.
At that point, you have to turn your accumulated savings into a stream of income you can draw from to help cover living expenses. You will likely have Canada Pension Plan benefits, Old Age Security and, if you’re fortunate, a company pension. Your own savings in tax-free savings accounts and registered retirement savings plans are the mortar that holds all of these bricks together.
Given the importance of the shift to generating retirement income, it’s important to highlight resources that can help people make smart decisions. I wrote recently about DIY retirement planning apps, and about some investing products that turn retirement savings into income. A reader recently asked whether there are any books that can help as well, and two immediately came to mind.
The first is Retirement Income For Life, by Frederick Vettese. Mr. Vettese writes the Charting Retirement feature for The Globe and Mail and previously held the position of chief actuary for the human resources consulting firm Morneau Shepell, now part of Telus Health. Currently in its third edition, Retirement Income For Life is full of practical advice for people of all backgrounds on how to generate sustainable income.
For example, he talks about the financial benefits of delaying the start of CPP retirement benefits as late as to age 70, and the role annuities can play in producing sustainable income. The book also looks at how much you can safely withdraw every year without increasing the risk of running out of money, and how to structure your investments to balance growth and the potential for market downturns.
Another good book is Your Retirement Income Blueprint, which is also in its third edition and was first published in 2011. Author Daryl Diamond has been a leader in the financial advice world in focusing on retirement income and his book covers areas like which accounts to draw on first and which you should defer, preserving government benefits, reducing taxes and leaving a legacy.
Both of these books are suitable for people who plan to manage their own retirement savings, and for those who have an adviser or financial planner. Better decisions are made when clients bring their own knowledge to the planning process.