A retirement plan is a subset of a Fee-Only Financial Plan.
A retirement plan can be broken down into 3 primary phases:
- Retirement goal settings/lifestyle planning
- Wealth accumulation
The objective of the goal setting and lifestyle planning is to determine your retirement income goals. Having a clear understanding of what you will require as income in your retirement will set the stage for when you will be able to enter retirement.
During the wealth accumulation phase, the focus is on savings and growing your wealth. This will be accomplished through addressing budget and cash flow concerns, as well as aligning your investment plan to your risk appetite and stage of life.
Drawdown is the more complicated aspect of the plan. There are many ways to fund your retirement, and your accumulated wealth, in conjunction with workplace pensions and government benefits (i.e. CPP/OAS) will serve as the backbone of your retirement income. Here we attempt to map out each year for the rest of your life. This will ensure that future cash-flow considerations have been contemplated. A well-devised drawdown strategy will ensure that your retirement income will be maximized over the long-term.
Whether it be during accumulation or drawdown, a fundamental component is tax-efficiency. Tax efficient strategies will be employed throughout all phases of your retirement plan.