Here’s how members of the education community can financially plan for their futures

It’s hard to learn about all the aspects of personal finances, especially when there are other priorities.

But financial planning is essential to any person’s long-term well-being. Education community members are no different. Proper planning ultimately helps anyone and everyone reach their financial goals in the most efficient way possible.

“Financial planning really entails helping people handle their finances over the long term in order for them to achieve their goals,” says Shannon Lamont, Certified Financial Planner professional at Educators Financial Group®. “This could mean sending a loved one to post-secondary education, saving up to buy a vacation property or planning for retirement.”

A financial planner can help clarify much of the confusion. Lamont likens financial planners to personal trainers. But instead of going to the gym, it’s getting budgets, debts and investments in check.

“Having a financial planner is like going to the gym on your own versus getting a personal trainer,” she says. “You generally get better results with the trainer because they keep you on track.”

Like how everyone has different goals and abilities at the gym, people’s finances are also unique. Being an education member results in economic factors that require special attention.

Education members have different financial needs

“Financial planning for educators is different ultimately because of their job,” says Lamont. “They have strong pensions in retirement, and they generally retire sooner than the average Canadian.”

Lamont recognizes just how much easier an educator’s pension can make retirement.

“The fact they have a strong pension really makes our jobs a little easier because they have some guaranteed income source in retirement,” she says.

But a great pension can come with its own issues — specifically, tax issues.

“If they have other savings in a registered retirement savings plan or a locked-in retirement account above and beyond their pension, we need to be concerned about being tax-efficient in retirement,” says Lamont. “All these things are taxable income.”

Another challenge is accommodating the early retirement that many education members desire. This often means finding alternative sources of income to supplement their pension before Canada Pension Plan (CPP) and Old Age Security (OAS) begin.

“For educators who want to retire early, it’s important to consider that OAS doesn’t start until age 65 and CPP, at the earliest, age 60,” says Lamont. “There may be a shortfall for a number of years.”

To understand all these facets, educators could benefit from working with a financial planner that specifically advises members of the education community.

“If you can get specialized advice, you’re going to be in a better situation,” Lamont says.

Find a financial planner who understands the education community

A planner or advisor with expertise in advising the education community has numerous benefits over someone with a generalized client base. In its essence, specialized financial planners better understand an educator’s situation.

“We’re intimately knowledgeable about an educator’s finances, pension plans, pay structures, benefits, potential pitfalls and all that good stuff,” Lamont says.

Planners who work with a wide variety of clients also don’t have the benefit of understanding individual pension plans in detail. Instead, they’re more like a jack of all trades.

“I was a general advisor back in the day, and I used to see pension plan documents from so many different pensions,” says Lamont. “I can’t be an expert in every single one.”

Because Lamont and her colleagues only work with the education community, she’s familiar with the pensions that teachers and education members are concerned with.

“We only deal with the Ontario Teachers’ Pension Plan and Ontario Municipal Employees’ Retirement System (OMERS),” she says. “We deal with them day in and day out and know them like the back of our hands.”

But specialty isn’t the only thing to consider in a financial planner. You should first and foremost find someone you’re comfortable with.

“A good financial planner is someone you get along with and trust,” says Lamont. “Because the reality is a good financial planner is going to be with you through the ups and downs of life.”

And the best way to create a trusting environment is by empowering educators with the tools and knowledge to plan for their financial futures.

“We want to ensure clients know what they’re getting into and are comfortable with it,” says Lamont. “The only way to do that is to educate them on the financial landscape.”

Book a complimentary consultation with a financial specialist from Educators Financial Group and enjoy expert, one-on-one, customized financial planning advice to achieve your financial goals.