Retirement — it’s a trip worth planning for — part 2
October 29, 2019Financial Fitness
It’s never too late to adjust spending and saving habits in order to protect your financial future.
The top reasons that people give for not saving for retirement are a lack of money and time. Statistics tell us that 57% of Canadians are stressed about retirement planning1. If you are among them and 10 years away from retirement, here are some things to consider that can help you land there safely.
10 years from retirement
This is the decade when you should really focus on saving for retirement. Generally, by this time, you should be increasing your savings rate and eliminating debts. If you plan wisely, it’s possible that as much as 80% of retirement savings will get set aside during this time.
If you’ve only saved a small amount at this point:
- You may have to consider working a few years beyond age 65. This will give you a chance to boost monthly government benefits, build up your RRSP account and reduce the period you’ll have to rely on your retirement assets.
- You may have figured out how to live on less, but don’t let that stop you from saving for retirement. Every little bit saved will help!
To help you build even more savings and protect them:
- Pay off all outstanding debts.
- Consider making a ‘catch-up’ contribution to your RRSPs.
- Become more conservative with your savings and investment choices.
- Purchase long-term care insurance to help ensure a nursing home stay doesn’t deplete your assets.
To make the biggest impact:
- Consult a legal advisor to make sure your estate plans are set up and are flexible enough to withstand tax law changes.
- Speak with your Financial Representative about investments in addition to RRSPs, RRIFs and TFSAs.
- Consider leaving a legacy gift, like a donation to a charity or cause you care about.
Many Canadians are not saving enough money for their retirement. Canadians estimate that they will need an average of $756,000 of retirement savings, however 90% of Canadians do not have a detailed retirement plan that describes their lifestyle or income needs for retirement2.
In 2018, from 1,528 people surveyed3:
- 63 is the average age at which Canadians plan to retire.
- $184,000 is the average amount Canadians say they’ve saved for retirement.
- 30% of Canadians have no retirement savings and a further 19% have saved less than $50,000.
Although a lack of time is a top reason that people give for not planning for retirement, do not be discouraged – there is still time. You can start by adjusting spending and saving habits immediately. You will be pleasantly surprised at how quickly your savings will add up to help you land safely and confidently into retirement.
1 CIBC, Consumer Research and Advice, December 28, 2017
2, 3 CIBC, Consumer Research and Advice, February 8, 2018