GETTING STARTED ON
RETIREMENT PLANNING
Whether you’re just starting out in your career or you’re well-established in your position, retirement planning should not be left by the wayside. The sooner you start an effective investment plan, the better off you’ll be upon retirement.
However, as many as 35% of Canadians are approaching retirement with little to no savings to their name, making it difficult to save for a retirement they can truly enjoy, while also affording them financial freedom. Don’t put your financial future on the line, take advantage of the many retirement savings tools available to Canadians and make your money work harder for you!
Where to start.
The first step in planning for your retirement is to take account of your current savings. Don’t be discouraged if your retirement savings are smaller than you’d hoped, or you may have had some financial setbacks along the way. Speaking with a trusted financial advisor can help you discover savings
What tools are available?
As Canadians, we are offered a number of helpful savings tools in order to maximize our contributions towards retirement. Each tool or program offers benefits to help you invest and your financial advisor will be happy to explain everything in detail to you.
RRSPs
A Registered Retirement Savings Plan is registered with the Canadian government, which you and/or your spouse can contribute to. Income earned in your RRSP is tax-deferred as long as the funds remain in the plan, helping you make the most of your savings. To learn more; read all about RRSPs here.
Like an RRSP, Tax-Free Savings Accounts help you maximize your savings with tax-free growth & withdrawals. TFSAs are an excellent addition to your retirement strategy, and you can learn more here.
TFSAs
Unlike RRSPs and TFSAs, non-registered investment portfolios are not subject to deposit maximums. Your portfolio growth of capital gains and dividends are taxed much more favourably than interest income or tax paid when taking an income from a Registered Retirement Income Fund (RRIF). If you would like to learn more click here.
Non-Registered Investment Portfolio’s
Government benefits
As Canadians, we are entitled to retirement savings benefits like CPP (Canadian Pension Plan) and OAS (Old Age Security). It is important to keep in mind that, although they are great additions to your savings plan, the benefits are not enough to be considered a stand-alone retirement savings solution. You will need to save more in addition to the plans mentioned here to cover your basic costs in retirement.
Pension plans and Group RRSPs are great savings tools. Unfortunately, few employers are now offering them. If you are fortunate to work for one that does it’s important you have a clear understanding of the specific details of how your pension works to avoid surprises during retirement. Speak with your employer to find out more, or to opt-in if the option is available to you as an employee. Your financial advisor can help you understand how your pension or Group RRSPs will work within your overall retirement plan.
Pension Plans & Group RRSPs
Often overlooked in the planning process cash value life insurance can provide significant “living benefits” not found in any other financial product and should be considered the foundation of a solid retirement plan.
Cash Value Life Insurance
In addition to your retirement savings plan, having a personal savings account is a great way to contribute to your financial future. Not only are you able to actively contribute to your personal savings without limitations, but you also keep a portion of your savings “liquid”.
Personal Savings
With the right plan, you can retire within 10 years.