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Wealth management

Market volatility: Tips to keep your retirement on track

July 6, 2023

Between the rising cost of living, market volatility and their combined impact on your budget, you’re probably worried about your investments. Let us help you get some perspective.

When you’re investing, it’s important to keep your emotions in check. Every economic cycle has its ups and downs. So, it’s important to avoid reacting too quickly based on emotion alone.

In times like these, you need to remember the golden rule of investing: Focus on the long term. The markets often deliver their best returns right after a correction. If you pull out now, you’ll miss out on the whole recovery, as well as some very promising opportunities!

Whether you’re nearing retirement or you’re already there, your advisor can help you decide what to do.

Is your retirement more than a few years away? Stick to your investment strategy!

If you’re not planning to retire in the next 5 years, stay focused on your financial goals. Don’t make any rash decisions while the markets are still in upheaval. Your investment strategy and investor profile are still reliable guides. There’s no need to rush. Keep saving for retirement, watch for investment opportunities and invest regularly.

If necessary, talk with your advisor. They can help give you some perspective and offer a bit of reassurance.

Are you retiring soon and worried about your finances? We can help.

Are the current conditions making you consider pushing back your retirement date so you can save more?

This might be a good time to meet with your advisor to review your retirement plan. They can help you manage your debts, income and investments. Here are some things your advisor can help you do:

  • Run new simulations that reflect the current state of your portfolio and financial situation.
  • Create a retirement budget and identify your sources of retirement income.
  • Go over your current contributions and increase your retirement savings if needed.
  • Rebalance your portfolio. The recent market turbulence may have caused things to shift.
  • Keep choosing diverse investments that are in line with your investment profile.

Having a set retirement plan can help you face the future with confidence.

Already retired or almost there? Check your withdrawal strategy.

This market volatility might be especially concerning if you’re just about to retire, or if you’ve already retired. You may be wondering how it will affect your investment withdrawal strategy.

But there isn’t much cause for alarm: Since you won’t need to withdraw everything you have at once, your investment horizon is still pretty long.

When you’re planning your withdrawal strategy with your advisor, you should:

  • Make sure you have some more stable investments that can be converted to cash for your short-term needs.
  • Create a diverse portfolio that reflects your investor profile and that will help your investments grow and last as long as possible.
  • Review your portfolio whenever the economy or your needs change.

However, depending on your current circumstances, we might recommend some changes:

  • If you’re able to, think about withdrawing less from your retirement savings this year.
  • If some of your investments have dropped in value due to market volatility, your advisor can tell you if it might be wise to revise your withdrawal strategy.

Converting your RRSP to a RRIF

  • If your RRIF isn’t your main source of income, it might be best to hold off on making the minimum required withdrawal until the end of the year. That way, your money can keep growing tax-free as long as possible.
  • If your spouse is younger than you, use their age to calculate the minimum you’re required to withdraw each year. The required withdrawal amount increases with age, and the amounts you withdraw are taxed. The less you take out, the less tax you pay.

Feel free to contact your advisor to discuss any concerns you may have about your retirement plan