Sticking to the basics is often the best course of action, especially when it comes to finances and planning for the future.
The following steps represent simple strategies and actions that can be taken today. They can make the process of working toward retirement goals more manageable and attainable.
1. Identify & Set Your Retirement Goals
It is important to take time during the pre-retirement years to define what retirement will mean to you. Put the plan in writing and update it as your circumstances change. A written retirement plan can help you track your progress over time.
The first step is to consider questions such as:
- When would you ideally like to retire?
- What are you looking forward to most in retirement?
- How many years do you expect to live in retirement?
- What kind of lifestyle do you envision?
- How much monthly income will you need to maintain your desired lifestyle?
- Which income sources will be available to you, including pensions, RRSPs, TFSAs, annuities, investments, real estate holdings or post-retirement employment?
- How many years do you have left to save?
- How would you like to spend your retirement years?
- Would the guidance of a financial advisor or planner help you stay on track? If you do not currently work with one, consider contacting your local credit union.
2. Are You Saving Enough?
You can use your retirement goals as a guide to determine if you are saving enough. If your planned retirement age is more than 10 years away, it’s okay to simply target a percentage of your current income as a retirement goal. Many financial planners recommend trying to replace around 70 to 80 percent of your current salary to maintain the same comfortable lifestyle during retirement. However, the amount required will depend on your lifestyle, expenses, income sources and retirement plans.
- Only about half of the working population have taken the time to calculate how much retirement savings they will likely need once retired.
- Choose the right type of accounts to save for your retirement that will help your money grow. Consult with a financial advisor or planner to set you on the right course if you have any doubts about your ability to save and invest your hard earned money.
- Review how your money is invested and track its performance once a year at the very least; every six months is an even better strategy. Keep watch on market fluctuations and inflation rates. Again, your advisor can be of infinite help in these matters.
If you feel you’re not optimizing your savings, consider speaking with a member of our team. Simply sitting down together or talking about your concerns over the phone will go a long way in developing or enhancing your savings strategy. The plan might possibly involve a big strategic update in order to give you more peace of mind about your future.
3. Get in the Habit of Saving Early
Saving and planning for retirement is an ongoing responsibility. Think of it as a lifelong process that involves good financial habits. A basic savings strategy will pay off in the long run. The more you can do to simplify your retirement plan, the easier it will be to stay on the right course.
You Have the Power to Make it Happen
Living comfortably during retirement is influenced by many factors, but thoughtful planning and consistent saving can make retirement goals more achievable.
With a strong financial foundation and a clear plan, retirement goals can become a reality.
Remember, our team would be happy to provide you with personalized guidance.