Retirement Planning: Where to Start?

Posted by Larry M on November 24th, 2020

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 your National 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 these 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.

If you think it’s time for you to start planning for your retirement, start here.

Maximizing your savings

Setting aside some money every month to put toward your retirement is a relatively easy concept. But how much do you really need to save, and how do you make this money grow as efficiently and effectively as possible?

You need to consider running projections on the future value of your pension, group retirement plan, or personal retirement savings, to guiding yourself on investment options that will help you reach your desired income level in retirement, and position your assets for maximum tax efficiency.

Transitioning into Retirement

This is where things get truly complicated, but is also the most interesting.

Accumulating your retirement savings is one thing, but determining the most efficient way to access your savings over the course of your retirement can be the most important part of a retirement plan. It’s also the least recognized (or even understood) aspect of financial planning in this industry.

Most individuals working in the financial services industry have no interest in helping you spend your money as efficiently as possible. For this reason, its important to make sure you choose your financial advisor carefully. The consideration of how you spend is highly important, especially given the state of our long-term care options and what they are likely to look like when we need them. Every penny that we keep in our pocket may well be needed further down the road. Let’s not pay any more taxes than is actually necessary.