A well-designed retirement plan should take into account the following factors that can greatly affect your income.

The good news is that Canadians are leading longer and healthier lives; Your retirement plan should support a retirement lasting 20 or 30 years, or even longer.

Asset allocation
Establishing your risk level when it comes to investing is an integral part of your plan. Historically, equities have been used to provide the long-term growth necessary to a retirement plan. However a well-diversified portfolio that includes cash equivalents, fixed income and equities helps provide growth and protection against market volatility.

Your investment portfolios need to keep up with inflation. If your investment returns are below the inflation rate, it will erode the purchasing power of your retirement income.

Withdrawal rate
The amount you withdraw from your investment portfolios each year greatly effects how long your portfolios will last. You need to withdraw enough to sustain your desired lifestyle, but withdrawing too much could mean you portfolios will not last long enough.

Health care
It is very important to understand what health care costs are covered by government programs and plan for any costs that are not covered.

To make sure you outlive your income, you should have a retirement plan that addresses all these issues.  It is also very important to review your plan regularly. 

If you would like to have a retirement plan created or want to have an existing plan review please contact us.

Source: Fidelity Investments
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