Retirement tips for every stage of life

You work hard. And you likely dream of a comfortable retirement. With careful planning, you can make your dreams a reality — retiring on your terms and stepping into your next chapter with confidence. 

The only thing left to figure out? How you’ll spend all that well-earned free time. 

Retirement planning begins with defining your retirement goals and determining how you’re going to meet them. There are many factors to consider when planning your retirement, like choosing the right investments, your desired lifestyle, and how you’ll manage the curveballs life will throw your way.

Not sure where to begin? Reaching out to a financial advisor is a great starting point. And in the meantime, here are some key tips to keep you on track on the road to retirement:

Start soon and small

The sooner you start planning for your retirement, the better. Depending on your age, you may have lots of time to make smaller contributions to an investment or savings account that slowly grows over time. This may be tough — we recognize many Canadians live paycheque to paycheque — but the future version of you will thank you for making those small contributions now.

Review and rework your budget at least twice year to help keep you on track. Here are a few things you may want to consider as you start saving:

Open a high-interest savings account

Some financial institutions and investment companies offer almost five percent interest on new deposits. You may want to think about opening a high-interest savings account with a financial institution or investment company that is different than your everyday bank, so you can e-transfer into your savings account without having easy access to withdraw. As they say, “Out of sight, out of mind.”

Take advantage of an employer-matched investment plan

 Some employers offer pension or RRSP options and will match your contributions dollar-for-dollar, up to five percent of your paycheque. These contributions are automatically deducted from your pay, so you don’t even have to think about it.

If you choose an RRSP, you’ll likely receive an income tax refund for those contributions, which you can reinvest each year if a refund is generated.

Stash away unexpected money

Maybe you receive government tax credits like a GST credit, or someone gives you some birthday money, or you have a hobby that pays you a few extra dollars. Try to curb your desire to spend this extra cash and instead send it straight into your savings account.

Additionally, you may want to have a conversation with a trusted family member or friend about how they handle and save money.

Delve into the digital world of finance

And no, we don’t mean invest in Bitcoin. The internet can be extremely helpful when it comes to financial education and literacy, something that isn’t typically part of Canadian education curriculums. Many people don’t understand the importance of saving or budgeting — it simply wasn’t taught to them. Research different savings tools, budgeting apps, and follow people on social media platforms who teach others how to save and invest. You’d be surprised what you can learn online.

Middle-aged money management

By the time you reach 35 – 40 years old, you likely have a much better idea of what you want from retirement. Maybe it’s a warm beach somewhere with the cold Canadian winters far behind you, or maybe a cute riverside cottage in the woods with nothing but the sound of water and chirping birds.

Your dreams are in sight, but there’s still saving to do. Here’s what to consider at this stage of life:

Calculate what you still need

If you’ve been putting money away for retirement, check in with yourself a couple of times a year to determine what you’ve saved so far. This is also a good time to start meeting with a financial advisor on a yearly basis.

Bring in extra income

If you haven’t been saving as much as you’d like, this may be a good time to consider ways to bring in some extra income. This could come from a second job, odd jobs, or turning a hobby into a side hustle.

Invest, invest, invest

Pensions and RRSPs through your employer are great but don’t forget to consider other types of investments, like a tax-free savings account or guaranteed investment certificate. Diversifying your portfolio helps minimize risk and acts as backup to help you adjust for inflation in the coming years.

Over the next decade, take advantage of more aggressive investment strategies to help build your investments quicker. This will also help you recover from the ebbs and flows that happen when investing.

This is also a good time to consider a whole life insurance policy, to protect you and your family from whatever’s around the corner.

Don’t forget to prioritize you

Before a certain age, planning for the future seems unnecessary — retirement may feel so far away that you think you have a lot of time to plan and prepare. And with economic uncertainty and stagnant wage growth, it can sometimes feel like there’s no point in saving for retirement because you think you’ll never get there, or that relying on Canada Pension Plan (CPP) and Old Age Security (OAS) will be enough.

But the future version of you will thank you for looking past these thoughts. The older you get, the faster the years tick by, and before you know it, you’ve run out of options.

Nearing the goalpost

If you’re approaching 50 or 60 years old, you know retirement isn’t too far away. You’re likely established in your living situation, have everything you need, and probably don’t see yourself doing too much more major spending.

Now is the time to start being a little more frugal with your income and paying closer attention to unnecessary spending. Here are some tips for managing this phase of life:

Budgeting is your friend

Try not to retire with debt. Your income will be lower during retirement, so servicing your debt and interest will become harder. Tracking your income and expenses carefully allows you to clearly see what’s coming in and what’s going out. Take advantage of online tools and tips, shop sales and use coupons, and identify your wants and your needs.

Optimize your investment portfolio

Check in with your financial advisor to adjust your investment strategy if you’re feeling like the market is too volatile or not aggressive enough. It’s important that you’re comfortable with the growth you’re seeing in your portfolio.

Prep for your pension

As you get closer to 60, review your retirement income sources by estimating your benefits from CPP and OAS. To help you estimate what you can expect from CPP and OAS, visit the Government of Canada website.

The golden years

You made it to retirement. Now, it’s time to relax and start checking off that bucket list. But first:

Consider downsizing

Being comfortable and safe is of utmost importance. Depending on the size of the home you live in, you may wish to downsize to save on maintenance and upkeep costs, insurance, or utilities.

Consider meeting with a realtor to see what the real estate market is like when the time comes. If it’s a seller’s market, you may find selling and living off equity for a few years will benefit you. If you don’t plan on selling, talk to your insurance company to see about lower rates or reduced coverage. And talk to your friends and family about maintenance worries — maybe they can help.

Estate planning

Speaking of family, they may be top of mind when you think about getting older, managing assets, and navigating healthcare concerns. No one wants to think about the end of life, but there’s peace of mind in knowing things have been taken care of. This could mean there’s a clear plan in place, or that things have been sorted from an inheritance perspective. An estate planner can help by talking to you and your family about those hard topics.

Health care is self care

You didn’t work all those years to feel sick and sore in retirement. No one likes going to the doctor, but regular check-ups and bloodwork can help with early detection and treatments, and with minimizing your pain and suffering if something is wrong.

Helping you plan every step of the way

We all plan for an uncertain future. One that has rising costs, unprecedented world events, political turmoil, loss, grief, but also joy and excitement. Whatever life throws at you, we get through together, day by day.

If you’re worried about retiring comfortably due to debts you’re struggling to manage, reach out today for a free, confidential consultation to discuss your needs.

Marianne Steele-MacSween is Vice-President and an LIT with MNP Ltd. She’s based in Syndey, NS.