Maybe you’re already retired. Maybe you’re looking forward to the next phase of your life. Either way, your goal is the same – to enjoy every year of your retirement. And why not, you’ve earned it. You’ve put away a retirement nest egg and you should spend it to truly live your retirement dreams.

But you also want to make sure that your retirement income lasts for all your retirement years – that it will always be there to sustain the lifestyle you want – and that takes some careful retirement income planning. Here are a few essential steps to a sustainable retirement income.

Know where your income will come 

The three basic sources of retirement income are:

• Government benefits, including: Old Age Security (OAS), which would be ‘clawed back’ in increasing amounts if your personal net income exceeds a stated threshold; the Canada Pension Plan/Quebec Pension Plan (CPP/QPP), which is intended to provide about 25 per cent of your average annual employment earnings; and the Guaranteed Annual Income Supplement (GIS), which is a tax-free (income-tested) payment which is available to those who have little or no income beyond OAS.

• Private pension plans and group Registered Retirement Savings Plans (RRSPs).

• Personal savings – the crucial building blocks that help provide financial security through all your retirement years.

Maximize your retirement paycheque

Identify your continuing costs and expenses in two streams:  essential spending that can’t be reduced, and discretionary spending that can be managed. Take into account the effects of inflation and the fact that you’ll likely need an income for 20 years or more, establish a mix of investments that will deliver the right level of cash flow, and develop a customized plan for withdrawing retirement income that will sustain your retirement lifestyle without stripping your underlying assets.

Be tax-efficient

Your withdrawal plan should also allow you to take full advantage of all the tax benefits available to you, such as the age and pension income credits, while avoiding OAS clawbacks. Other tax strategies can include splitting income with your spouse, investing in tax advantaged mutual funds, making minimum withdrawals from investments held within Registered Income Funds and other fully taxable investments, and selecting non-registered investments that offer preferential tax treatment, such as investments that are Tax-Free Savings Accounts eligible.

If you’re worried that there might be a gap between your retirement expenses and income, if you want to investigate strategies for increasing your retirement income, or if you simply want the peace of mind that your retirement income will be sustainable for all your retirement years, talk to your professional advisor.

Doug Robbins is a financial planner and seminar specialist with Investors Group Financial Services Inc.(Chatham). Contact the contributor at doug.robbins@investorsgroup.com Like us on facebook: Doug Robbins. Follow us on LinkedIN or Twitter: @igdougrobbins

*This article has been written and submitted by:  Doug Robbins