Starting Your Retirement Financial Plan

Retirement gives you more freedom to choose how to use your time. That might mean travelling, pursuing hobbies, spending more time with family, or simply enjoying a different pace of life. 

For ASEBP covered members approaching or already enjoying retirement, planning for that lifestyle involves more than determining how much income will be available – healthcare needs and coverage can change, travel may become a bigger priority, or your regular pay cheque may be replaced by income from several sources. Over a retirement that can last 20 or 30 years, these priorities and expenses are likely to evolve. 

No financial plan can anticipate several decades of change. However, it can account for the important things while providing flexibility for the unplanned. 

Start with the retirement you actually want 

Retirement planning often starts with a very common question: “Will I have enough?” 

It is an important question, and the answer significantly depends on what you expect that money to support. 

Some expenses may decrease. Commuting and other employment-related costs can disappear, a mortgage may eventually be paid off, and money that was being directed toward retirement savings during your working years may now be available for other purposes. 

Other expenses may take their place. Someone who has looked forward to travelling may take more and longer trips; you may spend on hobbies, recreation, or family; more home maintenance may occur after your mortgage is paid off; and some healthcare expenses that were previously covered through your employer-sponsored benefit plan may need to be handled differently. 

While general rules about how much of your working income you need in retirement can be useful when starting your retirement financial planning, knowing your personal retirement lifestyle plans provide a much better picture of where your money is likely to go. 

Where will your retirement pay cheque come from? 

Once you have an idea of the lifestyle you want to support, the next question is: “How will I pay for it?” 

During most working years, household finances revolve around employment income. In retirement, money may arrive from several different places. 

For education workers, the Local Authorities Pension Plan (LAPP) or the Teachers’ Pension Plan through the Alberta Teachers’ Retirement Fund (ATFR) may form an important part of your retirement income. Canada’s Pension Plan (CPP) and Old Age Security (OAS) can add government retirement benefits, while RRSPs and RRIFs, TFSAs, non-registered investments, cash savings, and other assets can provide additional resources. 

Having several sources of retirement income can be useful because they do not all behave the same way. 

Pensions and government income are often indexed, meaning they rise with inflation, and can provide regular payments that make recurring expenses easier to plan for. Personal savings can provide more flexibility when larger expenses arise or when you want to spend more. 

Taxes are another consideration. Different sources of income may be taxed differently, and decisions about when government benefits begin or when money is withdrawn from particular accounts (often referred to as ‘decumulation’) can affect taxable income. 

Retirement timing is an important part of this conversation. Whenever someone transitions from work to retirement, the timing of pensions, government benefits, and withdrawals from personal savings can influence the amount and type of income available. 

There is not a standard sequence that suits every household. A spouse’s income, taxes, savings, lifestyle goals, and family circumstances can all change the calculation. 

For that reason, account balances only tell part of the story. How those resources work together to pay for everyday living, healthcare, travel, and other priorities is what ultimately determines the lifestyle they can support. 

Questions worth asking 

As retirement approaches or evolves, these questions can help identify areas worth exploring: 

• What healthcare expenses could become my responsibility as my coverage changes? 

• What does the retirement I want specifically look like (e.g., travel, hobbies, and time with family)? 

• If travel is important to me, what medical protection would I have outside Alberta/my province or territory of residence or Canada? 

• Are there age, trip-duration, or medical-condition provisions in my travel coverage, and do I understand how they work? 

• Where will my retirement income come from and how do those sources interact? 

• How might taxes affect the amount of income I actually have available to me? 

• How much flexibility would I have if my health, housing, or family circumstances changed? 

• When did I last review the assumptions behind my retirement plan? 

You will not necessarily have an immediate answer to every question. However, asking yourself these questions regularly is still useful as it highlights the areas where more information or individual planning may be needed or worthwhile. 

Remember: understanding your options is one part of your retirement planning. Determining how your options work with your pension, savings, taxes, and lifestyle are what make individual financial planning support the retirement you have always dreamed about. 

A retirement plan is about more than replacing a pay cheque. It is about making sure your income and resources can support the life you dreamt of living.

How ASEBP supports you 

As you map out where your retirement income will come from, it is a good time to begin planning for your health benefits, too. Continue the coverage you know with ASEBP’s MyRetiree Plan, which is designed to support you through every stage of retirement. Learn more about MyRetiree Plan  

As an ASEBP covered member, you also have unlimited access to financial advice through your Employee and Family Assistance Program (EFAP). For example, you can call with questions about estimating how much you may need for retirement and how long your savings may need to last, understanding your retirement income sources, or how decisions about the Canada Pension Plan (CPP), Old Age Security (OAS), and personal savings could affect your finances. A financial professional can help you explore different scenarios, understand your options, and identify practical next steps based on your circumstances. This service is available to you at no cost. Visit asebp.ca/efap to learn more and register for your GreenShield+ account. 

The information provided through the Ask an Expert Hub is for personal use, reference, and education only. It is not intended to provide personalized medical, mental health, legal, financial, or other professional advice. Members should consult an appropriate health care provider, pharmacist, financial professional, legal advisor, or qualified professional before making decisions related to their individual circumstances.