Firstly, let’s consider the merits of a retirement plan. Firstly, the plan will aid you in the setting of clear goals for your retirement such as the age that you want to finish work and what you want your retirement to look like in terms of lifestyle. Secondly, it will help you to establish how much you need to save now to have a retirement that meets your objectives. Thirdly, a plan will allow you to choose your investment options wisely.
How you know how much you need to save is a common question. This depends on three factors:
- Your age. It makes sense that, starting to save for retirement when you are younger means that you need to save less money than if you start later in live.
- Benefits available to you. There are a range of federal governmental benefits that you might be eligible for, such as the Canada Pension Plan or Old Age Security.Your lifestyle.
- Your personal plans for your retirement will inevitably affect how much you need to save to fund it.
If you haven’t started saving for your retirement yet, or have less in your retirement savings plan than you would like, take a look at our top tips to accelerate your savings.
- Make the most of RRSPs and TFSAs to minimize your tax bill and make your money grow faster.
- Take advantage of any pensions or savings plans that your workplace offers as the contributions that your employer makes can add extra value to your fund.
- Think about putting spare money into your retirement fund.
- Look at your spending habits to identify opportunities to cut back outgoings and save more.
Taking steps to create an effective retirement plan is a decision that will pay off as you approach later life, giving you the opportunity to have the savings for the retirement that you deserve. Talk to us, we can help.