Five ways to be sure you’re financially prepared for the retirement you’ve always dreamed of.
Five ways to be financially prepared for retirement
THINK ABOUT WHAT YOU WANT YOUR LATER YEARS TO LOOK LIKE. Write down your desires and goals, and consider their costs. If you have a significant other, talk with him or her about what he or she envisions. Don’t worry if your plans don’t always align; if you know each other’s expectations, you can see where you can seamlessly join plans, compromise or decide to do some things separately. PAY DOWN DEBT. Make it a goal to go into your retirement debt-free (mortgage included). This will free up money that you would normally be giving away to interest, meaning more cash lining your pockets. If you’re stuck on how to get to the finish line without debt, talk to someone at your local nonprofit creditcounselling agency, who can look at your finances and give you some options. TOP OFF YOUR TAX-FREE SAVINGS ACCOUNT (TFSA). The beauty of a TFSA is that the funds you deposit, along with the profits you make on your investment, are not taxed when you withdraw them later. Earmark these savings for larger expenses, like, say, an RV to drive across the country (if that’s your desire). MAX OUT YOUR REGISTERED RETIREMENT SAVINGS PLAN (RRSP). Do what you can to put as much money as possible into RRSPS. This will lower your current tax rate, and you’ll reap the rewards in retirement when your tax rate is lower. TALK WITH A PROFESSIONAL. A certified financial planner can walk you through your vision, take into consideration your assets and liabilities and sources of income, cost of living, taxes and insurance to help you determine exactly what you’ll need. When you know your real numbers, you can work backward to map out a plan to get there.