Saving for retirement
It’s never too early — or too late — to start
As my needs and lifestyle change, I want to make sure my plan changes with it.
Everyone wants to live a long and fulfilling life, and many Canadians are planning to stay active during their retirement years. But the desire to make the most of life after work has to be balanced against some realities: rising health-care costs, possible financial market volatility, and relatively low yields on income-generating investments.
The good news? It’s possible to get the retirement you want, says Jenny Diplock, associate vice-president, personal savings and investing, at TD. To get started, you need to set your retirement goals and make investing choices that will help you build a nestegg that can help you to retire ready.
This is where working with a financial adviser can help.
“A financial adviser can help you look at suitable investment options for your unique circumstances,” says Diplock. “They can also help you to make the most of your savings and investments once you’re in retirement.”
Making that first appointment with a financial adviser is crucial at any age but, with life full of competing priorities, it’s also easy to put off.
Diplock recalls putting off her own first retirement planning meeting because life got in the way. Day-to-day life can be busy, from getting your car serviced to doctor and dentist appointments, and kids’ extracurricular activities sometimes coming first.
“One day, while writing my grocery list, I realized that if I could spend a couple of hours every Sunday going up and down the grocery aisles, I could also make it a priority to spend an hour meeting with a financial adviser,” she says. “I went into the meeting with a financial adviser feeling a bit nervous, but came out feeling a tremendous sense of relief from having a retirement plan that included developing better saving habits and setting up regular automatic contributions. I felt like I was more in control of my future.”
“Everybody has their own definition of what’s comfortable. You can look to friends and family members to help you set your own benchmark for retirement. Retirement is an individual choice and you want to feel confident you’re ready for the retirement you want.”
You may plan to relax during retirement or, perhaps, travel, continue to work parttime or spend more time with family.
“However, a general rule of thumb is that you should plan to have 60 to 80 per cent of your annual working income for your retirement years,” says Diplock.
“To achieve that, you need to develop an approach that aligns with your goals and takes into consideration future realities. Many Canadians are likely to finance their retirement with a combination of registered retirement savings plans, work pensions, income from rental property, sale of property when downsizing, continuing to work and inheritances.”
How you invest can also help you achieve different goals faster. For example, a tax-free savings account (TFSA) might be an appropriate vehicle to save for a shortto medium-term goal, like a vacation or a car. Longerterm goals such as retirement might be best served with an RSP.
No plan should be permanent, however. Regularly revisiting your retirement plan with your financial adviser helps ensure it could stay on track no matter what curveballs life may throw.
“As my needs and lifestyle changes, I want to make sure my plan changes with it,” notes Diplock.
A financial adviser can also help you find ways to contribute more dollars in the present, like setting up a preauthorized purchase plan, or using tools like TD MySpend to show you how you’re spending your money and whether there’s more wiggle room for savings.
“It’s never too early — or too late — to establish a retirement plan and start saving for your retirement,” says Diplock. “No matter how you choose to save and invest, developing a personalized plan to help build a comfortable nest egg for the retirement lifestyle you choose can offer peace of mind.”