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When John Lennon wrote that "life is what happens to you while you're making other plans," he probably wasn't thinking about financial stability.

Yet, thoughtful planning can make a big difference to your finances, especially if you're moving into retirement.

"The first thing I ask people is, what does financial security mean to them?" says Darren Coleman, a senior vice-president and portfolio manager at Raymond James in Toronto. "Some people say it means comfort, others say safety, others power. The first thing you have to know when you're planning is what road you're [taking]."

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An adviser can help families focus their quest for financial stability by asking more details about their personal goals, Mr. Coleman adds. Understanding the psychology of stability is key to achieving it, he explains. "Are they saving to educate their children or are their children already educated? Are their debts paid off? Do they own their home? Are they looking for the stability to retire comfortably, or is it to help another family member or to leave a legacy to a cause that they care about?"

After the aspirational aspects of financial stability have been looked it, it's time to deal with the hard math, Mr. Coleman says. People's goals should be quantified if they hope to achieve them.

"It has to be both dollar-specific and date-specific," he notes. "If you want to retire at 62 and you expect to live to around 90, then you have to look at the numbers."

People should also consider their debts, such as mortgage payments, and determine when they expect them to be paid and how much is likely to be available for a stable retirement. "Otherwise," he points out, "the goal [of stability] stays as a dream."

Once people understand how the numbers can work to help them achieve financial stability, they should become more familiar with the range of investments that can put them on track.

"I like people to know how a mutual fund works, how an RESP [Registered Education Savings Plan], and so on, works, just to understand the basics," Mr. Coleman says.

Markus Muhs, an investment advisor at Canaccord Genuity Wealth Management in Edmonton, says he looks to three sources of income for his clients' financial security in their retirement.

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"We look at a retirement plan that has non-registered funds, a Registered Retirement Income Fund [which becomes taxable in the year a Canadian turns 71] and Tax-Free Savings Accounts," Mr. Muhs says.

The types of investments he recommends depend on each client's situation, he explains. Generally, he encourages people to keep as much as possible in tax-sheltered funds, reinvesting profits until the funds are needed for financially secure living.


This content was produced by Randall Anthony Communications, in partnership with The Globe and Mail's advertising department. The Globe's editorial department was not involved in its creation. 

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