Don’t be left sprinting to the RRSP finish line

Special to the Post

It’s coming down to the wire for Registered Retirement Savings Plan (RRSP) season; the finish line is in sight. Canadians are either rushing to the bank in droves to make a last minute contribution or they don’t care for it.

A new poll by H&R Block Canada says almost one in five Canadians will make a contribution for a RRSP by March 1. That translates to only 17 per cent of Canadians. So it leads to speculate – what are the rest of Canadians doing for their retirement plans? Are they planning for their future or leaving it to chance? The reality is Canadians are living a lot longer and in some cases – some are living to see a 30 year retirement. As a consequence, 46 per cent of soon to be retirees (55+) confessed they

are “somewhat short/nowhere close” to where they hoped they would’ve been for their retirement savings according to the findings from a RBC poll.

“The findings from both polls are not surprising in a variety of ways. Canadians are carrying record levels of debt and when you are burdened by a heavy debt load – the furthest thing from your mind is how you are going to pay for your retirement,” says Jeffrey Schwartz, executive director, Consolidated Credit Counseling Services of Canada.

“And now with Canadians living 30 year retirements – it is even more vital to create a retirement strategy so that you are not scrambling last minute to create your nest egg or living your retirement plagued by debt,” says Schwartz.

For Canadians who leave their retirement planning to the very last minute, instead of panicking, take a step back and use this time to plan for your future. This means going back to the basics by:

• Creating a budget. • Learning how to live within your means.

• Setting realistic financial goals to shed your debt.

• Saving for your retirement.

To get started on the right track, Consolidated Credit Counseling Services of Canada recommends the following:

Know your goals

What do you look forward to in retirement? Do you know

what income you will need to do that? Whatever your goals are, you will have to plan ahead and save for it to come true.

What did you do last year?

What were your spending habits like in 2016? If you have no idea, go and review your old bank and/ or credit card statements as well as your bills. Organize everything into three categories: fixed, flexible and discretionary expenses. Now add up everything and decide where you can make adjustments. Remember to focus on your needs and not wants.

Factor in debt and your savings

While creating your budget, don’t forget to include your debt repayment

as well as how much you would like to put away for your retirement. Be realistic and be prepared to cut back on your flexible and discretionary expenses.

Show me the money!

Put your credit cards on ice and consider using cash or your debit card only. This way you will not be tempted to add more debt to your debt load.

Make it invisible

Saving for your future can be a lot easier when you make it disappear from your chequing account into your savings account. So head to your financial institution to automate your savings and watch your savings grow!