YOUR PRACTICE-Gradual retirement poses planning challenges

Tue Mar 26, 2013 3:26pm EDT
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* More Canadians want to retire gradually, not abruptly

* Advisers must plan for several income scenarios

* Taxes, insurance may determine strategy

By Andrea Hopkins

TORONTO, March 26 (Reuters) - Retirement planning once meant plugging a client's 65th birthday into a spreadsheet and going from there. But with more Canadians than ever saying they plan to retire gradually, financial advisers are faced with a growing set of unknowns as they help clients plan for their golden years.

"It's becoming totally different. People are no longer retiring as much as they are redirecting," said Jill Chambers, a certified financial planner at Integrated Wealth Management in Calgary.

"They are going from a predictable full-time salaried position to something totally different. It isn't just a line in the sand: 'Today I'm a worker and tomorrow I'm a retiree.'"

A majority of Canadians say they plan to work after retirement or transition to retirement with a gradual easing of workload. Experts expect the trend to continue as people live longer and healthier lives, making work possible, and carry more debt into retirement, making work necessary.

A survey released in January by Desjardins Insurance found 75 percent of Canadians planned to transition into retirement over time, rather than stopping work suddenly.   Continued...