(NC) Whether retiring is part of your five-year plan or something of a longer-term dream, it’s never too early or late to start thinking about how to pay for the lifestyle you want. In fact, the number one financial concern that Canadians have is saving for retirement.
According to a recent survey by the Chartered Professional Accountants of Canada, 59 per cent of Canadians believe they are either not on track or don’t know if they are on track to retire. To steer yourself in the right direction, check out these helpful tips:
Map your finances. Many people believe retirement income should be based on your pre-retirement income. But really the only thing you need to gauge your desired golden years’ income on are your planned expenses. If you want to travel the world and live lavishly, you’ll obviously need more. But don’t forget you’ll have fewer of certain other expenses in retirement, too. Things like day care, commuting and saving for retirement won’t eat up your income like they do now.
Trim the luxuries. Some expenses are essential, like your mortgage, food and even your kids’ education. But look for little luxuries you can eliminate, like your daily latte or pricey gym membership you don’t use enough anyway. Bigger treats can also have a big impact — the same survey found that of those who hadn’t set aside enough funds for retirement, 73 per cent cut down on travel and 62 per cent cut down on entertainment.
Work with a pro. Over 60 per cent of Canadians have not spoken to a financial advisor about saving for retirement in the last five years. But a financial advisor can help you guide your investments to make the most of your savings. They’ll even help you determine the right level of risk for you, depending on how far away your retirement is on the horizon. A chartered professional accountant can look at your spending and find areas for improvement. “Income taxes are a major expense in our lives, so figuring out how to legitimately minimize them is an important goal in planning for retirement,” says Blair East, a CPA. “I have worked with many individuals and families over a number of years, often with their investment advisors, and we have been successful in achieving lower income taxes and greater savings for retirement.”
Find more information and resources to get on a path of long-term financial health at cpacanada.ca/financialwellness.
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