Saving for retirement later in life
In 1980, the average lifespan in Canada was 75 years; in 2010, it was 81.
There was a time when the Canada Pension Plan (CPP) and old-age pensions were enough to retire on. But that is more and more a thing of the past, not only because we are living longer, but the cost of living is rising along with our expectations for retirement.
Approaching retirement with little or no savings can be scary, but there are some smart financial moves you can make today to make a comfortable retirement a possibility.
First steps to saving for retire- ment include determining a budget you can live with that leaves room for saving.
Second, consult with a financial investment adviser at your financial institution, full-service brokerage or another independent investment firm to help you set retirement goals and a budget for your retirement years.
Retirement age was once considered to be 65, then 69. In 2017, we don’t have to convert RRSP assets into other financial instruments until the end of the year we turn 71, making RRSPs a good option if you are looking for tax-sheltered investment with different risk profiles.
If you are in a high income brack- et at age 60, starting an RRSP is a good bet because of the tax-saving benefits.
A tax-free savings account, on the other hand, is a good retirement savings option if you do not have a regular income, or your income does not allow for much to be put in savings.
With a TFSA, there is no year in which you have to collapse the account like with an RRSP.
If you’ve decided to sell your home or a secondary property, a TFSA is also a good place to put the money — you can contribute up to $52,000 for the 2016 tax year if you have never contributed to your TFSA.