You want to ensure that your retirement years are as fulfilling and stress free as possible. Having a solid understanding of your finances will be an important part of minimizing stress. The investment landscape can appear very confusing and intimidating with dozens of different investments and approaches available. Understanding your current situation and expectations for the future are critical in creating and maintaining a successful financial plan. Your relationship with your financial advisor is an important step in creating a financial strategy that works for you.
You may hold some investments with other financial institutions. The problem with this approach at this time of your life is coordinating the different investments. An effective financial plan (especially when it comes to taking income out of your investments) requires looking at all your assets in total. Without this overall approach, you cannot accurately determine if the plan is correctly structured for your individual needs. There are specific income layering techniques your advisor can suggest to maintain tax credits, avoid clawbacks of benefits and reduce taxes. It is crucial that you consolidate your investments in one place with your primary financial advisor. By doing this you and your advisor can confidently plan and monitor your financial situation. You should also be able to rely on your advisor to call in any specialists to deal with particular issues. This could be tax specialists, estate lawyers, insurance specialists, etc.
As at any time in your life (and death), tax is a constant issue. The tax system in Canada is complex and becoming even more so as time goes on. While no one likes paying tax, most of us appreciate that it is necessary but we certainly want to pay as little as possible while still playing by the rules. Your financial advisor can assist you in structuring your investments in a way that is most beneficial in reducing tax. For example, there are ways to split your income with your spouse which results in an overall lower tax payment. Or, if you have a mixture of registered and non-registered savings there are tax-efficient ways to draw on those funds. Depending on your situation, there may be other techniques to structure your affairs in a tax-efficient way prompting your advisor to call in a tax specialist to analyze your needs. Again, these strategies can only be effective if all your assets are consolidated with one advisor.