Working longer or retiring better?


Work longer or retire now?

Sarah Twomey | Desjardins Group

A few years ago, the Canadian Government decided to gradually push back Old Age Security (OAS) eligibility from 65 to 67 between 2023 and 2029. Also, they decided to allow Canadians to keep working while receiving OAS benefits -- or workers can choose to delay their benefit start date to increase their benefit payment amount. 

The trend is clear: We're working longer. Desjardins Insurance found in a retirement survey around the same time of this change that nearly three out of five workers (56%) plan to keep working into retirement. 

Do you count yourself among these trend-setters? 
Maybe you love your career, you're in good health and frankly the extra income is pretty great. But, even the most solid plans can change. For example, your industry may take a nosedive, an accident or illness may prevent you from remaining active, or you may become a care-giver for a loved one. Or perhaps the grind is finally getting to you. These are all good reasons to look at your retirement plan. 

How's your plan, anyway?
If you had to rate your retirement plan on a scale of one to five -- one being the lowest -- are you on track? Let's be honest -- lots of us are on the low side. One reason is that we tend to find retirement planning very scary and confusing. It doesn't help either if you're carrying a lot of debt. So how do you eliminate it?
  • Assess how you spend money: Knowing this will help you to eliminate the bad habits.
  • Watch where the money goes: By creating a personal and/or family budget, you'll be able to find extra money that you can use to pay down the debt.
  • Once you've paid it off, start saving.
What do you do once you're back on track? 
Set up a retirement saving plan that's so automatic, you won't even notice you're saving. One easy option is to contribute to your employer-sponsored retirement savings or pension plan.
  • Part of the pay-yourself-first concept: Your contributions are made automatically through payroll deductions, so it's virtually painless. If you don't have it, you won't spend it.
  • Tax savings: Your contributions are typically taken before taxes. This means you're lowering your taxable income and your contributions can grow, tax-deferred.
  • Matching employer contributions: Depending on the features of your plan, your employer may also contribute to your plan. This could mean doubling your savings.
  • Portability: If you decide to leave your employer, you should have the option of transferring your plan to another investment vehicle or savings plan.

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