Save For Retirement with These Three Simple Steps

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RetirementRetirement should be a happy period. You’ve worked hard for years, and now you finally get time to enjoy your life outside of the workforce. That said, the extent to which you’re able to function financially in retirement varies depending on how much you’ve saved. That’s where some careful planning comes into play.

While every financial situation is unique, there are some basic things everyone can do to make sure their needs are met during retirement. For some, this can be a much simpler process if you’re content living with a little less money. Others who want to take trips or do more exploring in retirement need to know how they can save as much as possible.

Whatever lifestyle you subscribe to, having some kind of retirement fund is crucial. In order to do that, it’s important to plan ahead. When you enter the workforce, you need to know that you’re going to retire one day and all the money you make in your work life can’t only be spent in your younger years. Because of that, we’ve compiled some easy tips for you to follow to ensure you’re saving enough for your retirement needs.

Start Early

A lot of people entering the workforce think they have all the time in the world to save for retirement. However, as we all know too well, time flies by and before you know it — you’re a couple of years away from retirement without a concrete plan in place.

In terms of planning, it’s not only financial. You should take time to figure out what you want to do in retirement. Map out your priorities. Do you want to travel all over Europe? Are you looking to buy a boat and sail? Or are you just looking to spend more time with family and friends close to home? There’s always something you want to do more of in retirement.

Once you have that plan in place, you can start to make the necessary financial steps towards those goals. The key is to be open and honest. You don’t need to explain why you want to do a certain thing in retirement; you simply need to understand how to save for it.

Cut Your Debt While Working

One of the biggest retirement dream-crushers is debt. If you don’t pay off debt while working, it’s even harder to do in retirement when your income is generally lower.

A recent survey found roughly 20% of Canadian retirees were still paying mortgages and 66% had credit card debt. This is significant when you consider how much more difficult it is to pay your debt without a regular job.

Of course, this also translates into what you’re able to do in retirement itself. Instead of planning trips or family outings, you’ll be more focused on paying off debts. This is why it’s absolutely critical to focus on slashing debt payments while working. Not only can the debt come down quicker with a larger income, but you’re also opening up more financial opportunities for yourself as a retiree.

Work With A Financial Advisor

Sitting down with a financial advisor will give you a better idea of what you can do with your money in retirement. More importantly, they can help navigate your finances in such a way that you can make early investments to help you down the line.

Putting money into your Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA) is always a great place to start. You may also be eligible for other payments such as Old Age Security (OAS), the Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) and the Guaranteed Income Supplement (GIS).

Using an investment calculator and speaking with a financial advisor can help you with the complexities of saving for retirement. Our trusted team of financial advisors will help you make the best financial decisions for your future outside the workforce. Contact us today!

Ocean Wealth