Retirement may seem like a long way away, but you need to start planning long before you stop working. Most people need to save for many years to have enough money to retire.
Where do you start?
Here are some common questions people ask about saving for retirement:
- Where do I get money after I retire? The government provides some retirement income, and your employer may also help you save. But most people need to save extra money on their own.
- How much money will I need to retire? Where you live and the kind of lifestyle you want really affects how much money you need.
- How much should I save for retirement? If you start saving for retirement when you’re young, your money has more time to grow. That means you don’t have to save as much each year you are working. Even 10 extra years can really change how much you need to save.
- How can a Registered Retirement Savings Plan (RRSP) help me save? These plans reduce the amount of income tax you pay today. Instead, you can save and invest that money.
Saving for retirement is a long-term goal. You have to balance it with other life goals, like paying off a mortgage, saving for your child’s education, and caring for aging parents.
Just remember: Canadians are living longer these days. That means you will likely need more money to live on in your senior years. So don’t put off saving. Start putting aside some of your pay today.