Navigating Decumulation: Key Challenges and Strategies

Life expectancy continues to rise in Quebec, extending the length of retirement. Your investments will need to support your standard of living for several decades while providing the flexibility required to cover your expenses.

To avoid depleting your savings, your withdrawal plan should account for a long retirement horizon. You can then adjust your projections and optimize your plan based on your lifestyle, family history, and determine the best time to start receiving your pensions (QPP and OAS).

Inflation gradually reduces your purchasing power, so it's essential to factor it into your withdrawal strategy.

To maintain your standard of living, your investments should ideally generate a return that is equal to or greater than inflation. Indexed income sources (such as QPP and OAS) offer some protection, but it's crucial to ensure your savings grow enough to keep up with rising prices.

Taxes in retirement can have a significant impact on your disposable income.

The timing of your withdrawals (RRSP, RRIF, non-registered investments) will affect your tax rate. You may benefit from spreading out your income to optimize your benefits and reduce your effective tax rate. Pension income splitting with your spouse is also a strategy worth considering to lower your household tax burden.

In retirement, it's important to assess whether your current asset allocation still suits your new financial reality. Some people may choose to adjust the risk level in their portfolio to better manage volatility, while others maintain their allocation to support long-term capital growth.

It's essential to review your investor profile during major life events with your advisor. This process ensures that your investment strategy remains aligned with your withdrawal horizon, life expectancy, income needs, and lifestyle.

When planning your withdrawals, it’s important to know what you want to achieve. Do you want to use your assets during your lifetime? Leave part of your assets to loved ones or make gifts while you're alive? Support a cause? These decisions can significantly influence your strategy.

Well-structured estate planning ensures your assets are distributed according to your wishes after your death. It includes updating your will, protection mandates, and beneficiary designations.

A flexible solution that offers diversification across different asset classes based on your profile and objectives.

Turnkey solutions diversified between equities and bonds according to your profile, from the most conservative to the most growth-oriented.

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With capital and interest fully guaranteed by the Quebec government, Épargne Placements Québec offers a wide range of savings products to satisfy your savings and retirement needs.

An annuity is a financial tool that converts a sum of money—often from your retirement savings—into a series of periodic payments. In exchange for an initial payment to an insurer, you receive a stable income for a set period of time or for the rest of your life. It's an effective way to ensure a predictable source of income, which can be useful once you retire.