Smart withdrawal strategies for retirees

The advisor-client relationship has typically centred on wealth accumulation, but that will soon change. As more boomers retire, advisors will need to pay more attention to helping them withdraw their savings as efficiently as possible.

Naturally, withdrawing funds is different than accumulating them. It requires a greater focus on spending – on travel and health care, for instance – and juggling RRIF removals, pension withdrawals, CPP and OAS payments, tax and more.

The first step in planning for this stage, though, is to figure out what one’s first few years of retirement might look like, says Michael Erez, manager at Vancouver’s Odlum Brown Financial Services.

Retirement projections, he says, should be run at least a year before retirement and should take into account what the client will be spending, whether they have any savings shortfalls and whether they plan to work later than age 65. “They need to come up with a baseline of what their taxable income might look like,” he says.

Scott Plaskett, CEO of Ironshield Financial Planning, agrees. “What is your client’s attainable cash flow?” he asks. “It tells you what they’re hoping to receive is sustainable.”