According to recent studies, the average Canadian retirement age is just under 65 years old (Jeudy, Statista). Are you nearing this age? If so, do you feel you have enough built up in your nest egg to comfortably retire? Whether you are nearing retirement with a less than perfect nest egg or are just starting your saving journey, there has never been a better time to consider new money-saving tips to help get your nest egg funded.
Set Clear Goals
The first tip is to set clear short-term and long-term goals. Goals not only give you something to work towards, but it can also help you stay on track. Short-term goals might include setting a certain amount of money aside each month for your nest egg or reaching a certain dollar amount. On the other hand, long-term goals include the age you want to comfortably retire or how much you want in your nest egg when you retire. Setting both short-term and long-term goals can aid in the success of your nest egg and give you a great place to start.
Automate Savings
A key component of starting your nest egg relies on the automation of savings. You are less likely to spend the money set aside for your nest egg when it is taken out of your account immediately. Bills and unexpected expenses frequently come up, giving you a reason to justify spending the money; however, this creates a long-term affect when it comes time for retirement. Talk to your employer or bank about setting up automatic withdrawals into a retirement account to start working towards your nest egg goals.
Maximize Tax-Savings
The Canadian Government realizes that saving for retirement can be a burden on many Canadians, which is why they offer special tax incentives for contributing to retirement accounts. Contributions to a Registered Retirement Savings Plan, frequently called an RRSP, gives way to a tax deduction. In addition, funds contributed to these accounts grow tax-free until the money is withdrawn. Moreover, many employers make contributions to an RRSP, further adding to the potential savings in your nest egg.
Maintain Good Debt Levels
Debt and a successful nest egg are intertwined, making it important to maintain good debt levels. Credit cards, mortgages, auto loans and other borrowed money often come with interest. High levels of interest you are paying on a credit card loan could be put to better use in your nest egg with compound interest. Take a look at your current debt levels and analyze how much interest you are paying. Then, reach out to a debt expert, like Faber Inc, to determine the proper steps needed to maintain a strong debt level.
Summary
Starting your nest egg can seem like a daunting process; however, it is necessary to properly plan for retirement and create a solid nest egg. Faber Inc understands the difficulty of setting viable goals and monitoring debt levels, taking a major burden off your plate. For more information on the next steps tailored to your situation, reach out to a team member today.
Sources
Jeudy, Lucie. “Canada – median age of retirement 2000-2020.” Statista, 6 July 2021, https://www.statista.com/statistics/439886/median-age-of-retirement-canada/#:~:text=This%20statistic%20provides%20information%20on,employees%20stood%20at%2064.6%20years. Accessed 3 May 2022.