Whether you’re just starting out in your career or you’re well-established in your position, retirement planning should not be left to the wayside. The sooner you start an effective retirement savings plan, the better off you’ll be upon retirement.
A recent study has shown that as many as 35% of Canadians are approaching retirement with little to no savings to their name, making it difficult to save for a retirement they can truly enjoy while also affording them financial freedom. Don’t put your financial future on the line, take advantage of the many retirement savings tools available to Canadians and make your money work harder for you!
Where To Start.
The first step in planning for your retirement is to take account of your current retirement savings. Remember, everyone must start somewhere.
Don’t be discouraged if your savings are not quite where you hoped they would be. Speaking with a financial advisor can help you find savings or assets you didn’t know you had, and you may be surprised to find out you’re in a better position than you had originally thought!
What Tools Are Available?
As Canadians, we are offered a number of helpful investment savings tools in order to maximize our contributions towards retirement. Each tool or program offers benefits to help you save and your financial advisor will be happy to explain everything in detail to you.
A Registered Retirement Savings Plan is registered with the Canadian government, which you and/or your spouse can contribute to. Income earned in your RRSP is tax-deferred as long as the funds remain in the plan, helping you make the most of your savings. To learn more; read all about RRSPs here
Tax-Free Savings Accounts help you maximize your savings with tax-free growth & withdrawals. TFSAs are an excellent addition to your retirement strategy, and you can learn more here.
If you have maxed out the contribution room of both your RRSP and TFSA you continue to have unlimited contribution room in non-registered investment accounts. With after-tax money going into these accounts your future income stream will be tax favoured as part of your income will be a return of principal (tax already paid). In addition, portfolio growth by capital gains and dividends will also be taxed much more favourably than future RRIF or interest income.
As Canadians, we are entitled to retirement savings benefits like CPP (Canadian Pension Plan) and OAS (Old Age Security). It is important to keep in mind that, although they are great additions to your savings plan, the benefits are not enough to be considered a stand-alone retirement savings solution. You will need to save more in addition to the plans mentioned here to cover your basic costs in retirement.
Pension plans are a great savings tool. Unfortunately, they are only offered through an employer, and your employer must offer it in order for you to contribute. Speak with your employer to find out more, or to opt-in if the option is available to you as an employee.
In addition to your retirement savings plan, having a personal savings account is a great way to prepare for emergencies or contribute to your financial future. Not only are you able to actively contribute to your personal savings without limitations, but you also keep a portion of your savings “liquid”.
The biggest step you can take to securing financial freedom in your retirement is to speak with a qualified financial advisor. Working with an advisor who knows your goals, your finances and most importantly, YOU, can make a significant impact on your retirement.
The professional financial advising team at Synergy Life Financial tailors their retirement plans so they are uniquely fitted to you, to get started on your plan us a call at
For Business Owners.
As a business owner, your retirement plan will be tailored around your company and its true value. If you’d like to know more about developing a retirement plan as a business owner, you’ll want to explore our Blue Wealth program