Are you planning for retirement but don’t know where to start? You’re not alone – many people find retirement planning to be a daunting task. As your retirement date draws near, it’s important to take deliberate steps to guarantee a smooth transition. Here are some key action items to consider:
 

Ten years away

Personalize your plan
Starting your retirement planning ten years before your target retirement date helps ensure you retire on time with enough resources to enjoy your golden years the way you've always dreamed you would. Begin by visualizing your ideal retirement lifestyle. Will you downsize and live modestly or travel the world in luxury? Consider the age you want to retire, your current financial situation, your spouse's plans, and your personal goals. Different retirement lifestyles require different plans, so it's essential to start planning early.

Create a budget
Calculate your current retirement savings and how much you’ll likely have saved by your target retirement date. Identify all sources of income you expect to receive after retirement, including your workplace retirement plan, to determine your monthly fixed income. Revisit your vision of your ideal retirement lifestyle and estimate the associated expenses. Are you saving enough? Be sure to factor in potential future medical costs, dental treatments, and home or auto repairs.

Reduce your debt
It can be challenging to build your savings while still managing your debt. Now’s the perfect time to prioritize becoming debt-free. Consider booking an appointment with a financial advisor to discuss your current debt situation. They can help you decide whether paying off your mortgage before retirement makes sense.
 

Five years away

Budget check-in
At the five-year mark, you should review the budget you prepared earlier to see if anything has changed, such as unforeseen expenses that may have affected your initial savings plan. If you’re still far from your savings goal, you may need to cut down on your spending over the next five years and allocate more of your income toward your retirement fund. Alternatively, you could postpone your target retirement date by a few years to maintain your current lifestyle.

Assess your risk tolerance
As they approach retirement, many workers often feel inclined to avoid stocks to minimize their risk. On the other hand, those behind on their savings may choose to invest in riskier assets in hopes of achieving higher returns. However, both approaches can lead to mixed results. Being overly conservative can limit market growth potential while taking on too much risk can result in significant setbacks if the markets decline.

At this stage of life, it’s crucial to maintain a balanced mix of stocks, bonds, mutual funds, and other assets that align with your risk tolerance and retirement timeline. If you’re unsure about your risk tolerance or have questions about diversifying your portfolio, consider consulting a financial advisor for guidance.

Explore your insurance options
According to a recent report, the average life expectancy of Canadians is just over 80 years.¹ Given this, you should consider insurance options that provide comprehensive coverage for a lengthy retirement – including health, dental, and vision care plans, as well as prescription drug coverage and travel insurance, which may become necessary in your later years. It's also wise to think about purchasing a life insurance policy to protect your family once your group coverage ends. A life insurance benefit can help cover final expenses, pay off debts, and provide financial security for your loved ones.

Attend a retirement workshop
Attending a retirement workshop is a great way to gain a thorough understanding of the valuable information you’ll need as you approach retirement. These workshops also allow you to ask specific questions and have them answered by industry professionals. OTIP offers free retirement workshops for anyone in the Ontario education community. They cover the benefits of retiree health, dental, and travel insurance, financial and estate planning, RRSP and investment preparations, and much more. Visit our workshops page to view the schedule and register for a workshop near you.
 

One year away

Pick up a new hobby
As your retirement date closes in, it's a good idea to think about the hobbies and activities you might want to pursue when you retire. Consider your interests and goals, and research local associations and community groups that offer relevant programs. Many options are available: volunteering, learning a new skill, joining a community sports league, etc. Getting involved in these activities before you retire can help you develop your social circle outside of work and make for a smoother transition – preventing the feeling of "What now?"

Try a practice run
Take another look at your budget and make any necessary adjustments to estimate your retirement income accurately. Then, try living on that budget for a couple of months. How does it feel? If you find you're managing well with some extra cash to spare, you're likely on track for a successful retirement! However, if you're struggling to make ends meet, you may need to reassess your retirement plan. Identify the areas you can adjust, such as your budget, savings plan, investments, or possibly your retirement timeline. The good news is that you still have plenty of time to make these changes before you take the plunge into retirement.
 

Three months away

Apply online
As you approach this major milestone, be sure to submit all necessary retirement documents. Take some time to carefully review your health, dental, and travel insurance needs. It's crucial to choose the plan that's right for you. OTIP is here to support you through this exciting next step, and we're pleased to offer RTIP Easy Enrol. RTIP Easy Enrol streamlines the coverage selection process for OTIP group benefit plan members nearing retirement, so you don't have to complete our standard RTIP application form. Simply choose one of the three RTIP health insurance plans, confirm your personal information, and we'll take care of the rest to ensure there's no gap between your active and retiree coverage.

If you have any questions about retirement planning, life insurance, or the RTIP health insurance plans, contact a Life and Living Benefits Representative at 1-800-267-6847 or view the available RTIP health insurance plans.
 

1. Government of Canada – Retirement needs