OPB News: Not planning today will cost you tomorrow: Debunking popular pension myths
A recent poll conducted by CIBC revealed that more than a quarter of Canadians (27%) regretted retiring and half needed to go back to work because of financial needs.
This is why it’s so important for you to plan how you want to spend your time and understand what your financial picture will look like in retirement.
Myth #1: You don’t need to think about retirement planning until your late 40s or 50s
Reality: If you push your retirement plan to the side for too long, it’s going to be much harder, if not impossible, to make up any savings gap in time. That means you’ll either need to work longer or scale back your expectations to compensate.
That’s why it’s important to start working on a retirement plan now. We know that you’ve got a lot of other competing priorities and expenses, but ignoring the issue could affect you and your loved ones down the road.
If you have a buy back opportunity (such as a leave of absence, or fixed-term employment with a PSPP employer, or credit earned in another registered plan) the best time to buy it may be right now.
If you think you might have eligible service, give us a call and we can confirm if you can purchase it. When it comes to savings, the earlier you start, the better off you are.
Myth #2: You have a pension, so there isn’t much else you need to do
Reality: While it’s true that you’re off to a great start, that doesn’t mean you can forget about retirement planning. It’s important to understand your opportunities so you can maximize your pension and set your retirement goals. That way you know if you’re saving enough or if you have a gap. Depending on your goals and how much credit you expect to have in the PSPP when you retire, you may need to put extra money into other retirement vehicles.
Myth #3: You have your financial plan in order, so you’re ready to retire
Reality: Even if your finances are in order, the transition can be incredibly emotional. Work is not only a big part of our lives but, for many of us, it’s also a large part of who we are. So, it’s really important to start planning what you’ll do after you retire and how you want to spend your time. This can include creating a new daily schedule and weekly, monthly, or yearly goals.
On average, PSPP retirees are collecting their pensions in excess of 26 years. The time to start thinking about how you want to spend all that time is now.
We’re here to help!
Check out My Retirement Planner – our free, online tool available through your e-services account to find out if you’re saving enough for your future. This planning tool helps you understand and forecast your complete financial retirement picture, including your projected income from all sources and your projected expenses in retirement.
You can also book a one-on-one session with one of our Client Service Advisors, who are all Certified Financial Planners®, to discuss any questions you have about your retirement and pension. Our Advisory Services are available to you at no cost and are offered either in-person or over the phone. To book a one-on-one session, log in to your e-services account and select ‘Book My 1-on-1’.
We also have Client Relations & Education Officers who will visit your workplace to conduct in-person information sessions on the PSPP. We can present general topics including an overview of the PSPP and we can also conduct customized presentations. To arrange a presentation please contact your employer.
Our new website is another great resource
At OPB, we believe that understanding how your pension fits into your overall financial and life circumstances is critical to making informed decisions. We’re committed to providing the resources you need to achieve a secure retirement.