Retirement — it’s a trip worth planning for
October 22, 2019Financial Fitness
It’s never too late to make adjustments to spending and saving habits in order to protect your future.
Two of the top reasons that people give for not saving for retirement are a lack of money and time. Stats tell us that 4 in 10 people have no idea of the amount required to fund their retirement plan.1 If you are 20 years from retirement, you have time to plan wisely to help you land safely in retirement.
20 years from retirement
As you get closer to retirement, you should consider the quality of life you want to have and how much it will cost for you to get there. This is a crucial time for you to adjust spending and saving habits with a view on your future!
To help you save a small amount:
- Put away what you can. Even if it’s only $100 a month, this is a good habit to maintain and you’ll be surprised at how quickly your money can grow.
- If you have children you want to help educate, set clear guidelines for what you can afford to pay for their education. Create a plan with your financial advisor before your children get to college/university age.
To help you save a moderate amount:
- Avoid “midlife crisis” splurging.
- Stick to your budget – especially for those big-ticket items, like a vehicle.
- Consult with a financial advisor to make sure you are investing wisely to generate the most after-tax return from any investment option you choose.
To help you save a bigger amount:
- Make additional “catch-up” contributions to your RRSP.
- Guard against “lifestyle creep” where you become accustomed to living the “good life” now. Higher expenses will quickly eat up the income you are saving for your retirement.
1 CIBC, Consumer Research and Advice, December 28, 2017