Financial planning in your 70s + MORE Oct 12th

For retirees and near-retirees, at least five dire possibilities can threaten a long and fruitful retirement: taxes, investment fees, crumbling stock markets, soaring interest rates and inflation. 

We can largely control the first two by maximizing the use of tax-effective vehicles like TFSAs, RRSPs and RRIFs, and avoiding high-fee investment solutions. Stock market returns and interest rates are trickier, typically addressed by ensuring that the traditional free lunch of diversification and asset allocation are commensurate with your financial resources and lifestyle objectives. 

But what about inflation? Throughout 2022, inflation has remained elevated, triggered by the COVID recovery and stimulative monetary policy by way of ultra-low interest rates. Central banks in Canada and abroad have done an about-face, raising rates to try to slow down spending and cool inflation.

If you’re contemplating retirement or semi-retirement, is inflation a sufficient threat to consider postponing it? We tackled similar ground in this space a year ago, shortly after the COVID bear market hit…

When most people think about financial planning, they think about saving and investing for retirement. That is certainly a part of it, but financial planning is much more holistic.
Here are a few financial planning strategies for those approaching or into their 70s. If you are not there yet, bookmark this for future you, or share it with older family members for whom it may apply.
RRSPs
An account holder can only have a registered retirement savings plan (RRSP) until December 31 of the year they turn 71. By that time, they must either convert their RRSP to a registered retirement income fund (RRIF) or purchase an annuity from an insurance company that provides a regular payment for life. 
The conversion age used to be 69, but was increased to the current age 71 in 2007. I find in the course of my work as a Certified Financial Planner that some people still think it is 69. It often makes sense to take RRSP withdrawals prior to age 72, and even convert your RRSP to a RRIF as early as age 65…