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  • Writer's pictureDarryl Smith

Retirement Planning Investment Tips for Savvy Business Owners

Retirement Planning Investment Tips for Savvy Business Owners - Synergy Life Financial

Whether you’re just starting to think about retiring, or you’ve been dabbling here and there with RRSPs or other investments over the years, now is the time to get serious and to start working on a retirement plan that will fuel your future dreams. I work with a lot of clients who hope to retire in the next 10 years, and one of the most popular questions I get is, “What are the best investments to make for a successful retirement?”. Before we can talk about investments, however, there are a few steps that need to happen first. One of them is to think about the type of retirement you envision (think vacations, hobbies, where you will live, time with the grandkids, etc.). Another step is to assess your current and projected assets, expenses and income; you need a clear picture of your overall finances. Don’t forget to calculate future income such as Canada Pension Plan, Old Age Security, and any other pensions.

Once you’ve got a better idea of what you want and what your finances look like, you can start to make sound investment decisions based on a plan and geared towards your personal and financial goals. When it comes to retirement planning, it’s important to think about your future income, not just ‘investments’ in general. The odds are that you won’t draw on all of your various sources of retirement income all at once, so it’s important to be prepared.

Let’s have a look at a few planning tips that can help you better plan for and enjoy your retirement:

1. Eliminate Debt

While this may not seem like an investment, it actually is…in yourself and your finances! The less you are paying in interest payments now, the more you will have to save, invest (and spend!) down the road. Every day that goes by carrying debt is money lost. If you can’t pay off all debts, at least try to find ways to switch over from high interest to low interest loans or credit cards.

2. RRSPs

Feel free to max out those RRSP contributions and enjoy the income tax refunds now that come with doing so. In fact, you can take that refund and look at paying off debt or increasing your investment contributions. You can roll your RRSPs into RRIFs down the road, which will keep your investments growing while you take an income.

3. TFSAs

A tax-free savings account is a great way for Canadians to maximize their wealth potential, without having to pay taxes when you withdraw the funds. Again, this is something you can max out to reap the full benefit ($6500 per year as of 2019, or $63,500 in total if you’ve never contributed).

4. Non-Registered Investment Portfolios

If you have maxed out the contribution room of both your RRSP and TFSA you then have unlimited contribution room in non-registered investment accounts. With after-tax money going into these accounts your future income stream will be tax favoured as part of your income will be a return of principal (tax already paid). In addition, portfolio growth by capital gains and dividends will also be tax much more favourably then future RRIF income.

5. Real Estate

If you currently own property, there’s a good chance you’ll make a profit when it comes time to sell or downsize. Depending on if you have a mortgage or not and what is left owing, you may have a sizable amount of money to invest given that you likely don’t need a large home with your kids grown and living on their own, now is the time to think about transferring that equity into an investment portfolio that will provide you additional income during retirement.

6. Business Assets

Owning a trades business usually means owning some assets – whether it’s equipment, tools, vehicles, real estate, inventory, client accounts, and so forth. Many of these assets can likely be liquidated when you sell your business, while others may have little or no value. A great investment now is to get your business’ valued in order to give you a better idea of what you can expect to get out of the business that you can roll over into investments that will provide income upon retiring. It may mean that you need to invest in or build up your business value to enjoy maximum profits down the road upon selling, or if you plan on keeping your business but will be stepping down from managing it, that requires a careful financial strategy as well in order to best plan for your future cash flow.

Darryl Smith of Synergy Life Financial is here to help you map out a retirement plan that puts your lifestyle and financial well-being first so you can achieve those big goals, worry-free! Connect today by calling (705) 434-0562 or emailing Plus, don’t forget to check out the 10 tips to maximize blue-collar wealth for business owners HERE!

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