Retirement Planning: Getting Started
Retirement is still a long way off, but as a financially responsible person, you are able to put some money aside every month. But you’re not sure where to save it in order to give you the maximum benefit possible. Bank accounts are paying little or no interest. The stock market sounds terrifying. What to do?
I can help you
Comprehensive retirement planning really shouldn’t be a DIY project. As an experienced Financial Planner, I can help you by creating an effective plan for retirement that, among other things, will show you how, where, and when to save more effectively.
Studies have shown that households using a Financial Planner have up to 273% of the assets at retirement that an otherwise identical household would have. In other words, most people will have nearly three times as much in retirement if they use a licensed professional to help them along the way.
Sooner rather than later… if possible
The sooner you can start the sooner you can put the power of “compounded returns” to work for you. For example, in order to reach a goal of $1 million, a 25-year-old would need to save $300 per month until age 65, whereas a 35-year-old would need to save $700 per month until age 65. Even though the 35-year-old didn’t save anything for 10 years, their total contributions will end up being nearly twice as much as the 25-year-old.
What type of tax shelter(s) should you be utilizing?
There are a number of tax shelters to choose from, including RRSPs and TFSAs, but no two people are exactly the same and a generic “cookie-cutter” approach is not your best option. A customized solution built specifically for you, and your specific needs, can grow your savings at an accelerated rate, whether these savings are for your retirement or a major purchase in the next few years.
An effective Financial Plan will do more than simply help you accumulate savings — it will also protect your income and your savings to ensure that you reach your financial goals. Tax strategies put into place now can have significant benefits later in life.
Most of us understand the benefits of sensible retirement planning, but when it comes to actually creating your personal retirement strategy and putting it into effect, it doesn’t feel quite as straightforward. The reality is that many of us are unsure how to plan for retirement because there are many, many variables to consider.
Let’s consider the merits of a retirement plan. A basic retirement 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. It will help you establish how much you need to save now to have a retirement that meets your objectives. This plan will allow you to choose your investment options wisely.
Determining how much you need to save is a common concern. This depends on a number of factors that are different for everyone:
- Your age. Naturally, starting to save for retirement when you’re younger means that you need to save less money than if you start later in life.
- Pensions and personal retirement savings plans.
- Benefits available to you. There are a range of federal governmental benefits that you may be eligible for, such as the Canada Pension Plan or Old Age Security.
- Your lifestyle and spending habits. 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 my top tips to accelerate your savings.
- Make the most of RRSPs and TFSAs to reduce your tax 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 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.
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If you’re ready to begin your retirement planning, or take what you have started to the next level, contact me for a no-cost preliminary consultation. Together we can determine whether I am the right Financial Planner for you. I would be happy to help you find the solution that fits your unique situation.