It can definitely be a nuisance to even think that far, especially when you have a billion other things going on at work and home. Retirement is not on everyone’s mind, when there are priorities on which bills to pay and which debt fire to put out. However, I absolutely have to tell you this, planning is everything! We plan our birthday parties, our weddings, our babies (for the most part :), planning retirement is just as crucial!
It’s super easy
Ok, finding the money to save may not be super easy, but starting out small is. Start with as little as $9/week and work your way up the ladder. Just like in anything else, it’s recommended to start small and picking up the pace. Think of it as you weekly coffee and bagel, without the calories. Breaking up your contributions to weekly or bi-weekly intervals will put less strain on your wallet and also will make you notice it less. The contributions can come out of your bank out automatically into a Retirement Savings Plan.
Make compound interest your friend
Don’t save under a pillow eh! That’s no way to make money. Make sure you get a nice hefty investment plan with a long term vision. With a long term horizon you can afford to take on more risk because the longer you invest the less market fluctuations there are. In other words, the volatility (the ups and downs of the market) even out over a longer period of time. Investing into mutual funds or stocks is ideal because there is a higher chance of greater return. You would need to fill out an investment questionnaire first (available online or at your local bank) to determine which investment you’re best suitable for.
Start now – no I mean, literally now, go sign up for an RSP account
Signing up for a Retirement Savings Plan account is easy. It can be done online, through your employer, or at a local bank. You choose how you want to invest your retirement contributions – savings, bonds, mutual funds or stocks. If you’re contributing through your employer, check if the employer is willing to match some or all of your contributions, this means you’ll have even more set away for that lovely work free life of yours.
Every rookie starts somewhere
Every professional, whether it’s an athlete, stock broker, plumber etc. started off as a rookie. The same logic is applied to a great retirement plan. You can only have a successful wealthy retirement if you include planning, determination, budgeting and consistency. You can’t start planning at 50 and expect a great outcome.
It’s tax deductible! (
I save the best for last)
Lastly, and the best point of all, the retirement contributions are tax deductible! This means you get to write them off against your income, and pay less tax to the government. Once the contributions are withdrawn, that’s when they are taxed, at your tax rate at the time of the withdrawal. You will likely be in a much lower tax bracket, once retired, therefore the tax implications won’t be as great.