Retire without the Debt

Posted in General

If you are in your 30’s and 40’s and grew up listing to commercials like “Freedom 55” or have parents who likewise talked about that, it may come as a shock that saving for retirement isn’t as easy to come by as you might think. 


Many retirees want to maintain their pre-retirement lifestyle, but find it difficult because they don’t have the retirement savings to support the diminished working income they had.  The reality is, many have to change their lifestyle, or run the risk of running up debt.

The modern mentality is semi-retirement.  A successful retirement plan in 2015 means having the financial stability to live a long, satisfying life, and be able to do the things you want to do and enjoy the stress relief that comes with financial security.  What it doesn’t mean is stop working entirely. Once in their 60’s most people want to take their time to enjoy life, but they also want to keep active and involved.  The marketplace is beginning to accommodate these workers. We see some start-up agencies offering a central location to find these workers. Companies realize the value of hiring these part-time workers because of their wealth of experience and knowledge.   

What does retirement hold for our younger generations?  Considering they think the  ‘get it now and pay for it later’ is expected, means that they will find it more inconvenient to sacrifice now to save for retirement years.  Add in the current lack of job security, almost non-existent workplace pension plans (unless part of a trade union), and the ever-increasing cost of living makes retirement daunting for our young Canadian workers.   

Suggestions to help with Retirement Planning

  • Automatically set aside a set amount into a savings account.  If you don’t see it, you will be less likely to spend it
  • Stay organized!  Business or personal, use a digital software solution such as Sage 50 to keep income and expenses organized.  It will save time at the end of the year when you have to do your taxes.  Scan receipts and keep them in a secure digital file.
  • Tax Shelters - Contributing to a tax shelter such as an RRSP or Tax-Free Savings account when your income is high (typically when you are younger) will allow you to take the money out later at a reduced income tax when you make less money (often when you are retired / semi-retired)
  • Annually Review your Plan -  With income changes, family changes (i.e. buying a new home, having a child, etc.) and government tax changes, it is important to review your plans each year. Consult with your accountant to see how to manage your taxes to optimize your retirement savings.

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