It can be difficult to save for retirement when you also have to meet other financial obligations, like rent or payments on your mortgage, car or student loan. But having a retirement savings plan can help.
According to the findings of the Financial Consumer Agency of Canada’s recent survey, Canadians who have a plan are more confident that they know how much they need to save than those who don’t (56 versus 28 per cent). There are many ways to plan for your retirement, so if you don’t know where to start, the following may help:
Determine what you need
FCAC has several online resources to help determine how much money you will need in retirement and to help you set savings goals. These include the financial toolkit, budget planner and retirement income calculator.
Develop your own savings strategy
Once you have a goal, the number one tip is to start saving early. Saving early means you can save less each month, and your money will have more time to earn a larger amount of compound interest. But it’s never too late to start. Try to set aside a portion of every paycheque for retirement savings. You can do this automatically by contacting your financial institution to have a set amount deposited into a savings account each time you are paid.
Balance your current financial priorities by making a budget
Saving for retirement can be difficult when you have other demands on your money. Making a budget will help you better figure out how much money you can set aside for the future. If you know where your money comes from and where it goes, it will be easier for you to identify and reduce non-essential expenses. As part of your budget planning, you should plan to pay down your debt and avoid taking on more. This will help free up funds for saving.
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