Canadians approaching retirement need to do their research before picking a retirement start date, according to the latest BMO Retirement Institute report, When to Retire: Age Matters!.

Under the Canada Pension Plan’s (CPP) current rules, drawing benefits prior to the age of 65 reduces monthly payments by 0.5% per month. Conversely, pensions are increased by 0.5% for every month one defers drawing on their payments past age 65.

The CPP changes, which will be fully implemented by 2016, could significantly impact when one chooses to retire, providing an incentive to wait.

“The upcoming changes to CPP are just one example of why Canadians need to educate themselves on their retirement options,” says Tina Di Vito, head of the BMO retirement institute. “In order for Canadians to start thinking about their retirement start date, they need to have a clear financial picture, be able to envision their goals and have a plan for the future. The best way to do this is to seek the advice of an experienced financial professional.”

When planning for retirement, future retirees often focus on variables that are outside of their control, like the future state of the economy and how the markets will perform. According to the report, however, retirement age—and, in turn, retirement income—is something that most Canadians should consider strategically.

BMO offers these tips
Be informed: Familiarize yourself with how government and employer pension benefits will be calculated. Avoid finding out at retirement that what you will receive is different from what you expected to receive.

Protect your retirement savings: As you approach retirement, restructure your portfolio to ensure that a portion of it is invested in products that are not subject to market fluctuations.

Obtain advice: Seek out the help of a financial advisor who can assist you in developing a retirement plan that best suits your needs.

Read a copy of the report

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