14 Smart Things To Do BEFORE You Retire

Links:

------
Intro (0:00)
1. Save hard (0:14)
2. Smash debt (0:42)
3. Build a war chest (1:41)
4. Cover expenses upfront (2:25)
5. Plan out your time (3:20)
6. Nail down the budget (4:10)
7. Test your budget (5:33)
8. Think through pensions & GRSPs (6:07)
9. Know your public pension plans (8:41)
10. Figure out how much money you'll need (9:38)
11. Build a tax strategy (10:46)
12. Stress-test your plan (11:57)
13. Consolidate RRSPs (13:43)
14. Know your health insurance options (14:42)
------

DISCLAIMER: All videos on this channel (including this one) are for educational or entertainment purposes only. They are not (and are not intended to be) financial, investment or legal advice. It is our firm position that everyone has a unique situation and should seek professional advice on how best to navigate it. Rhys Martell is a Chartered Investment Manager (CIM), a Fellow of the Canadian Securities Industry (FCSI), a Qualified Associate Financial Planner (QAFP) and more. However, he is not registered to provide investment advice and, therefore, does not provide specific investment recommendations. Those looking for specific investment advice should seek out a registered professional.

[ClemonSteve]

I wish they taught investing at school level. There is so much advantage to doing this!
My biggest regret is that I started so late.

[DrivingPhilippines]

tldr
- Save as much money as possible before retiring through intentional saving and minimizing taxes.
- Eliminate all debt, including mortgage debt, before retiring if possible.
- Build a solid cash reserve or "war chest" that is accessible for unexpected expenses.
- Pay for any major upcoming expenses like home repairs before retiring.
- Plan meaningful activities and ways to stay engaged during retirement to avoid boredom or isolation.
- Carefully create a budget and living expenses estimate for retirement.
- Test the budget before retiring to ensure it is realistic.
- Understand any pension, retirement savings, and government benefit options.
- Stress test the retirement plan for challenges like market downturns or higher costs.
- Consolidate retirement accounts and plans for simpler management over many years.

[natureboy]

Here are a few things we did:
Home has been paid for for many years already. So we decided to tackle some of these big ticket items.

We installed a new roof a couple of years ago.
We installed a new heating/a/c unit during the pandemic. Got a great deal during the shutdown. A/C heating units can cost $$$$ to install nowadays.
Installed a new water heater.
Installed new sets of tires on our vehicles.

[dallasjohnson]

Your channel is the absolute best in this genre (Canadian financial)...super clear explanations, logical and evidence-based guidance...somebody should be giving you a book deal/your own t.v. show.

[AnnaOllsson]

Becoming a millionaire through a Roth IRA or a 401(k) involves different strategies for maximizing profits. A Roth IRA offers tax-free withdrawals in retirement, which can be advantageous if you expect to be in a higher tax bracket later in life. On the other hand, a 401(k) provides tax-deferred growth and potential employer contributions, boosting your savings. The optimal choice depends on factors like your current and future tax situation, employer match, and investment options. Consulting a financial advisor can help tailor a strategy that aligns with your financial goals and circumstances.

[oliviaacosta]

Thank you. I’m 56 and plan to retire at 60

[creativitybycarilyn]

Great advice!! I also purchased items for my hobbies in advance, so I wouldn't get hit with that expense during retirement. I purchased sewing and embroidery machines. knew I wouldn't want to spend that money on SS income and then have a less enjoyable retirement. I think you need to make sure if you have rental income, that you can get by if the tenant doesn't pay their rent long term. During COVID the U.S. government blocked landlords from evicting people who don't pay...a disaster for someone on fixed income.

[freetofly]

Thanks for a thoughtful list of action plans. I just retired and gone through the experience of most of these on the list.
All sound advice. And your follow up links are appreciated.

[gigitoronto]

My father in law retired at 75. Now he’s 80 and went back to work twice a week. He’s a Dermatologist and he said that he got depressed after retiring.

[whistlerbrad]

Very good list, thanks for posting this video

[FIRED]

We don't need fancy software... We have very accurate records of expenses. We use this and apply a very conservative investment return of 4.5%, a SWR of 1.5% max, and retirement of 50 years. Since that says we won't run out of our invested money (which EXCLUDES SS & pensions), we are good. See. No fancy software needed.

That said, we will try a paid software service, say like New Retirement, and see what optimizations we can maybe consider.

[OptimisticHominid]

There's lots of great info in this video. Although we're now drawing from our pensions, I still like to see if we've done all the right things - it seems so!

On the merging of RRSPs, we didn't do that, so now we have five active RRIFs and LIFs, but as I'm currently still good managing these, I use them to hold off on CRA taking too much money too soon. I withdraw from our plans three times a year: Withdrawal 1) All the no tax withheld cash, 2) 10% tax withheld, and finally 3) 20% tax withheld. In addition to the 0% portion, we get $25K at 10%, and $50K at 20%. For sure, in the following year we owe a little to CRA. It's probably not worth all the hassle, but for now, I'll keep on doing it this way.

[terryevp]

Another top notch video. Many Thanks. Have a great weekend..!!!

[corinnelangevin]

Would love to see a video about taking out the lump sum of your employment pension vs waiting until you get guaranteed payments.

[JDRichard]

Great video and thanks for all of the options as I am two months from retiring

[williammiller]

Excellent video! Thanks for the information.

[njlifeandhealth]

As far as health insurance options go, Medicare can be much more cost-effective in many cases! You will most likely have to wait until you are 65, but in many states, Medicare + a Medicare Supplement is affordable and consistent cost-wise. Definitely worth a thorough comparison.

[Knitterly]

You mentioned health insurance. Could you do a video on private health insurance post-retirement? My workplace plan stayed with me until age 65. Then I signed up with a plan within the timeframe that would allow me in without a medical exam. But everything I read said the premiums aren’t worth what you get in return. (I ended up not taking the dental plan because I have really good teeth etc and this saved me $72/months.) I also wanted to hop on board with the medical insurance because it allowed me to add on lifetime guaranteed travel health insurance. Thanks

[James_]

Smash debt - Yes…..but me might not quash the HELOC we have used solely for investing. The interest is 100% deductible. We will do our best to reduce it but not at the price of shrinking down our retirement home.

[liverpool]

Hey Rhys! What do think about the size of "war chest"? What should be the cash amount: 5%, 10%, 20%, ... of the portfolio? Or maybe it is going to be 1 year of expenses, 2 years, 3 years, 5 years, ...? How would you suggest to start building it? I am almost done with my mortgage and planning the next step. Thank you. From Edmonton, AB.