Saving for retirement can be a difficult task when we all have various financial responsibilities. The earlier you can think about saving for retirement, the better. This is so that you can begin to plan for your expenses and to establish how best to save. One of the best things to do is to focus on your financial wellbeing now and where you want to be in the future when you retire. To ensure you meet your financial goals comfortably, here are our top tips for saving for retirement.
Make a retirement plan, set goals, and stick to them
Sit down and make a clear plan and set of goals for your future and what you would like to attain. Simply thinking that you would like to retire comfortably isn’t a specific enough goal. For instance:
- How much are you thinking of saving for retirement?
- When would you like to retire?
- How much will you have to put aside to attain these goals?
If you make clear goals and a set plan on how you will attain these retirement goals, you are much more likely to reach them.
Put away some money from every paycheque
Every time you receive a paycheque, you should ring fence some funds to put into a savings account, a RRSP, or another form of retirement account. Most importantly, it is never too early to start saving for retirement and to begin planning. For instance – if you are 40 years old and want to retire at 65, here is a hypothetical savings plan. If you begin contributing $150 bi-weekly from now until retirement at 65, with a rate of return of 5% annually, you would accumulate roughly $194,000.00. Therefore, saving for retirement is possible for everyone.
Pay your retirement fund first
If you pay towards your retirement fund first from each paycheque, it leaves you with a set amount left to budget with for the month. If, however, you pay towards your retirement savings last, you are more likely to find ways to spend that money before it is time to pay towards your retirement account.
Budget, budget, budget!
It is a good idea to sit down and see how much income is coming in each month, and what expenses you will have. Some expenses may not be monthly, such as repairs to a vehicle, so divide the yearly cost by twelve to budget a bit each month for them. After paying yourself for your retirement account and covering all your expenses, make sure you have money left over for an emergency fund. Something will always come up that we don’t expect, and we need this fund to cover when this happens. Find out more in our tips on how to save money.
Following these steps will put you on the right path to saving for retirement. If after planning your monthly budget your income can’t cover your expenses, you may have to make some financial decisions. You may need to consider filing a consumer proposal or bankruptcy. Contact one of our offices by calling 310-4321, visit our nearest location for a free consultation, or complete our free assessment form online. At Spergel, we will review your financial situation and discuss your options for the future.