The responsibility for saving for our retirement has in recent years shifted increasingly to the individual. The good news is that by following a handful of simple rules, you can make that responsibility work in your favour.
Make it a habit
At first, it’s the act of saving that really counts, rather than the amount you put away. Its important to be realistic and get into the habit of savings. Even if you only have small amounts to save, building your nest egg takes time. Save small amounts and let the magic of compounding go to work.
Have a plan
Be clear on your direction, purpose, and incentives. When you have a clear idea as to why you are saving and what you want to use the money for can be a great motivator. It can be as simple as the short term being a rainy-day fund, the medium term perhaps saving for a car or a home, and the longer term is about setting yourself up for when you’ve finished working.”
Diversification refers to putting your money in different places and/or assets rather than saving all in a single investment or investment account type. Take advantage of the tax efficient accounts available to you such as TFSA’s, RSP’s, and company pension plans available to you. Mixing your investment plans for these accounts and your taxable accounts can not only help reduce taxes but also to diversify risk.
Consider your own situation
If you’re employed, find out what your employer will contribute towards your pension. Most will match your own contributions or pay in a certain percentage of the amount you do.
If you are self employed consider the advantages of incorporation, unused RSP contribution room, and dividend income.
There are many reasons for taking professional financial advice, including the role we can play in helping you get into good habits and keep them going.
What will help keep you on track are regular check-ins financial planner. Life can take over and even important things can lose our attention, so a regular check-in with your professional planner can ensure you stay on track. Your plan needs to be constantly evolving with you, your thoughts, and desires, not a static document.
Retirement Navigator planners have built thousands of plans and work with clients to update plans on almost a daily basis. We work hand in hand with portfolio managers to help them ensure your investment strategies align with your life plan.