"If you take a look at the state of affairs in Canada with housing prices where they are, student loan balances being higher than they've ever been, it's a real struggle for young Canadians to even think about retirement planning because they're so focused on the here and now," says Preet Banerjee, a Toronto-based personal finance expert (source: http://www.cbc.ca/news/canada/life-expectancy-cost-1.3995606)
So how do you balance a mortgage, student loans and saving for retirement with the added stress of the possibility of out-living your money?
The answer is simple, but it isn’t easy. It is very simple to say “I will put away 10% of every paycheque into a retirement savings plan” but doing so when you have other priorities is not always an easy task.
What can make this practice easier is opting into a Group RRSP or being required to contribute to a pension plan through work. With these plans, deductions are taken directly from your paycheque and accumulate in an investment. You receive the tax benefits; receive the advantages of disciplined savings and you really have to do very little. Chances are though; these options are not available to you. In fact, almost half (47%) of Canadians do not have an employer pension and even fewer younger workers do. (source: http://www.cbc.ca/news/business/retirement-savings-broadbent-institute-1.3450084)
So – in the absence of an employer pension or Group RRSP what can you do?
Set up your own plan. An Advisor can help you to determine what savings tool is right for you (RRSP vs TFSA), and what investments are appropriate for your goals and time horizon. They can help you determine the appropriate amounts to automatically contribute to your plan, and even set up the contributions the same day you are paid (easy in, easy out). This way, as soon as you are paid, you pay yourself first, and the stress of planning for retirement and/or financial freedom is taken care of.
If you want a professional to review your financial situation, with no obligation, to offer suggestions or to simply reassure you that you are on the right path, please get in touch today!
Brooklyn Scott is a Financial Advisor/Mutual Funds Representative for Lewis & Jones Group/Desjardins Financial Group/Desjardins Financial Security Investments Inc. in Killarney, Manitoba.
Mutual funds are distributed through Desjardins Financial Security Investments Inc. For insurance products, Desjardins Financial Security Investments Inc. acts as a national insurance brokerage agency.