Angela Iermieri | Financial Planner | Desjardins Group
The average Canadian retires at age 63.1 Will you retire on time, or just like in a bad dream, will you end up prolonging your working years?
When it comes to retirement, people usually have the same three fears. Keep the evil eye at bay by facing down these fears with some simple financial strategies.
1. Not being able to save enough
How can you be sure to have the money you need to retire when you want to? How do you put together a savings plan or make the most of your fledgling savings?
When you build a house, you need a plan. The same goes for retirement. You need a solid foundation and someone to guide you through the process. This is especially true if your employer doesn't offer a pension plan or if you got a late start on your retirement planning.
Strategy: Take it one step at a time
- 5 to 15 years out from retirement: Keep thinking about what you want your retirement to look like. Max out your contributions to registered plans like RRSPs and TFSAs, and diversify your investments.
- Less than 5 years out from retirement: Establish a retirement budget with more specific goals and figures. Identify any shortfalls you may have and determine how much cash you'll need to close them. Then figure out whether closing the gap is really feasible. Take the test!
2. Suffering from failing health
"Will I be healthy enough to enjoy the retirement I want?" I get that question all the time, but no one can predict the future. However, if you take care of yourself in the years leading up to retirement, you'll have a better shot of enjoying your golden years in good health.
Strategy: Maintain a healthy lifestyle and plan for the unexpected with health and critical illness insurance. That way if you'll be losing your group insurance when you retire, you won't have to dip into your savings or rely on your retirement income. What's more, you'll enjoy peace of mind, which is also good for your health!
3. Not being ready financially
As you approach retirement, struggling with debt or the financial burden of an adult child or aging parent living at home can be extremely stressful. It can make you even more fearful that you won't be able to retire on time.
Strategy: Brainstorm ways to pay down your debt or generate additional income to offset your costs, such as:
- Eliminating unnecessary expenses
- Considering a phased retirement to keep your income up
- Retiring when you pay off your mortgage
- Selling a vehicle
- Selling your second home
- Estimating when you'll have fewer child-related expenses
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1 Statistics Canada