We all dream of retirement, but saving money is always easier said than done. Figuring out how much to save for your later years is only one part of the problem. Being ready for retirement is tough enough, but an early or unplanned retirement can complicate matters even more. However, with the right mindset and a few tips, it’s never too late to start planning for your retirement.
Deal with your debt
You don’t want to enter retirement owing more money than you did before retirement. Becoming as debt-free as possible will reduce your expenses and increase your spending capacity. Things like credit card debt and mortgages should be paid off to the best of your abilities. You wouldn’t want to be retired and still be paying off your student loans.
Have a health insurance strategy
Medical costs are one of the biggest expenses during retirement. Look into getting long-term care insurance. Consider your unique health needs and find a plan that covers your medical expenses in the event of a problem. The cost of premiums is usually less than any out-of-pocket price for treatments and medication.
Take advantage of employer contributions
Whether you work in Canada or the US, some employers offer savings and investment matching for various savings plans. Check with your employer to see if they offer investment matching for things like RRSPs, RESPs, TFSAs, or 401Ks. The goal is to maximize your investments and to pay less tax in the long run.
Increase your savings over time
If you’re slowly paying off debt, once payments are complete, consider automating deposits to your savings account. When it comes to savings, do it early and often, especially when additional funds you have budgeted become available. Make sure to monitor your investments and payments to help maximize your savings potential.
Manage your retirement spending
Before you retire, you should practice retirement spending as if you only have your retirement funds available. Talk to your family about costs and what you want to achieve during retirement. Retirement spending can include everything from medical visits to travel. You should also plan for inflation, since things are only getting more expensive over time. This exercise will help you prioritize and downsize during retirement if necessary.
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Rise CPA provides professional accounting, tax and business advice to help you make the right decisions at the right time. Since 1979, we’ve been helping clients create businesses and lifestyles they envision by delivering expert insights and financial guidance. At Rise, we excel at advising business owners and their families in a caring and personal way. Our services cover a wide range of Tax Planning, Auditing, Accounting, Estate Planning, and Business Advisory. Please call (604) 936-4377 or use the online contact form to book an appointment with one of our accounting professionals.