If you’ve been putting off saving money for retirement, we have some surprising statistics to share that might have you hustling to the bank to start preparing for your future.
Putting off saving
A recent TD Retirement Realities Poll found that 15 per cent of Canadians plan to save for retirement only less than five years before leaving the workplace, and 6 per cent don’t plan to save at all. By contrast, 69 per cent of retirees wish they had saved for retirement for 25 years or more. Although it’s natural to prefer to focus on the present and worry about the future down the road, that can be a risky approach when it comes to saving up for a comfortable retirement.
Why start now?
Another recent poll by TD Canada Trust revealed that 40 per cent of Canadians felt retirement was the first time in their lives when they were able to spend time on the hobbies they loved. Whether you want to take up a new hobby, invest in a vacation property or travel the world, you’ll need the proper funds to do it. And unfortunately the truth is that 22 per cent of retirees admitted retirement was the first time they worried about not having the money they needed to live comfortably. Senior vice president at TD Canada Trust, John Tracy, explains that, because retirees are living longer, more active retirements, “they need more money to sustain their quality of life and retirement dreams.”
The power of compound interest
If you want to enjoy a comfortable and happy retirement, it’s important to take action now. Kim Parlee, vice president at TD Wealth Management, explains that “when you start investing early, the impact of compound interest is more powerful in helping your savings grow.” So just by starting earlier in life, you can invest less and save more.
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What current retirees have to say
If you want to enjoy a stress-free, well-earned retirement, current retirees have a few tidbits of advice to share. The TD Retirement Realities poll found that 52 per cent of Canadian retirees recommend creating a budget and sticking to it as a way to save more money for the future. Close to half — 44 per cent — also recommended contributing the maximum amount to your RRSP each year, and 43 per cent said paying off all debts before retiring is important.
How to make it happen
Cynthia Caskey, vice president, portfolio manager and sales manager at TD Waterhouse Private Investment Advice, recommends speaking to an advisor to get you on track. “An advisor can help you map out a plan that is aligned with your personal situation, including a strategy for debt repayment and investments that can increase the tax-efficiency of your portfolio. He or she can also suggest opportunities for retirement savings in addition to RRSPs, such as tax-free savings accounts (TFSAs) and mutual funds, to provide potential for savings growth, while considering your risk tolerance,” Caskey explains. So if you’re ready to get your budget on track, to start contributing to an RRSP and to work on reducing your debt as today’s retirees suggest, visit an advisor to find out what you need to do to make your retirement an enjoyable one.
How are you planning for your retirement? Share in the comments below!