Retirement looks different for everyone. For some, retirement might include traveling the world, golfing, or spending time with grandchildren. For others, hobbies or volunteering might be appealing. Or, like many physicians, perhaps continuing to work part-time is a more realistic goal. Have you thought about what your retirement will look like? Whatever your goals, a customized financial plan will help you achieve them – and keep you on track along the way.

Step 1: Create your goals

Brainstorming your goals will help bring your future dreams into focus. If you have a partner, consider creating lists of goals independently, and comparing them afterwards.

If the idea of delaying full retirement and working part-time appeals to you, make sure you factor that into your retirement goals as well. Focus first on the reasons behind your retirement choices, and not the choices themselves. This approach will help you and your advisor to take a more rational and, ultimately, more successful approach to financial planning for retirement. A goal-setting matrix has been provided on the following pages to help walk you through this process.

Step 2: Develop a cost framework

Start by adding up your anticipated annual expenses to help you understand how much income you’ll need to meet your retirement goals.

Taken into account with other lifestyle costs and inflation, you can then establish an after-tax retirement or semi-retirement income to work towards. This process will help you and your advisor determine how much income you’ll need to meet your lifestyle and financial goals in retirement.

Your advisor can also help you set up your investments in a way that maximizes return and minimizes taxes, without taking on too much risk, depending on your time horizon.

Step 3: Determine sources of income, identify gaps and create a plan

Armed with an understanding of your retirement needs and goals, you and your advisor can create a retirement roadmap. To do this, you’ll need to identify any gaps in the income sources you need to support your goals. When you retire, you’re likely to have investments in many types of accounts, including personal investment accounts, a Registered Retirement Savings Account (RRSP), a Tax- Free Savings Account (TFSA), a corporate account that may have a Capital Dividend Account (CDA) balance, and maybe even an Individual Pension Plan (IPP). Sources such as the Canada Pension Plan/ Quebec Pension Plan (CPP/QPP), and Old Age Security (OAS) are also part of your retirement income. Your financial advisor can help you determine the most effective way to draw down your retirement savings, maximizing income and tax efficiency.

You should also discuss issues like estate planning and insurance, and key steps involved in winding down your medical practice to ensure a seamless transition from your working years into retirement.

Step 4: Review the plan

Financial planning is a lifelong process. During your earning years, it’s important to revisit your financial plan regularly to determine how you are tracking toward your retirement goals, and to make changes as personal circumstances change. When you review your plan, consider any changes in your goals, your income needs, assumptions used, the market value of your investment portfolio, your health, and your family situation.

A well-structured retirement plan is one that is flexible and adaptable, and able to evolve with you as you progress through your working years and into retirement.


Read the full guide put together by the Vancouver Division of Family Practice. Click Here