It’s not too late to jump start your retirement savings!


When you begin your working life, retirement seems like a long way off. But as the years go by, retirement has a way of sneaking up on you. Don’t panic – it’s not too late to save. If you’re thinking about retiring in the next 10 to 15 years, here are some things to consider to help you jump start your retirement savings.

What do you plan to do in retirement?

Do you plan to spend more time with friends and family? Volunteer in your community? Travel? Take on new challenges like launching a second career? The lifestyle that you choose in retirement will determine your monthly and annual costs, which will figure into your calculations of how much you need to save.

What sources of retirement income will you have?

  • Assuming you qualify, government benefits include the Canada Pension Plan (CPP), Old Age Security (OAS) and Guaranteed Income Supplement (GIS).
  • Are you among the 53% of Canadians that have an employer pension plan to supplement their retirement income?
  • Nearly half of Canadians have to rely on their own savings to fund their retirement.[i]
  • The labour force participation rate for people over 65 is almost 14%[ii], so perhaps you will be among those that continue to work in retirement. Are you paying yourself first?
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One of the most effective ways to jump start your savings is to pay yourself first and make it automatic. Every time you get paid, take some money off the top and divert it into a separate savings or investment account. To make sure it happens, set it up as an automatic transfer. If you’re already paying yourself first, try to increase the amount you transfer. Over time, the power of compounding will go to work to make your retirement savings grow.

How can you save more?

At first glance it may seem difficult to find extra money to save. So start by examining your “latte factor”, the little indulgences and wasteful spending that can really add up without you even noticing. Fancy coffees are just one example. Take a look at restaurant meals, take-out, entertainment, and other non-essential expenses for places to cut back.

Next, look for opportunities to make a big impact on your retirement savings. If you get an annual bonus at work or you usually get a tax refund, try to save rather than spend it. And if you’re fortunate enough to receive an inheritance, try to put some or all of it towards retirement.

Other ways to jump start your savings are by living off one salary and saving the other, downsizing to a smaller home, or selling other non-essentials like vacation homes, boats or extra vehicles.

Where to save?

There are several different types of accounts that you can use to invest  your retirement savings:

  • If you have one, your workplace pension or savings plan can be a convenient place to save because your contributions are taken directly from your pay. If your employer matches your contributions, your ability to save is doubled.
  • A Registered Retirement Savings Plan (RRSP) has special tax features designed to help you save for retirement. Contributions are tax-deductible and your savings grow tax-free for as long as your money stays in the plan.
  • A Tax Free Savings Account (TFSA) can be used to save for many goals including retirement. The current contribution limit is $5,500 per year and funds can be withdrawn whenever you want without paying any tax.
  • Non-registered investment accounts have no special tax status and may be considered once your RRSP and/or TFSA are maxed out.

So what are you waiting for? Jump start your retirement savings today!


[i] http://www.cbc.ca/news/business/retirement-savings-broadbent-institute-1.3450084

[ii] https://beta.theglobeandmail.com/globe-investor/retirement/the-boomer-shift-how-canadas-economy-is-headed-for-majorchange/article27159892/?ref=http://www.theglobeandmail.com&

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