At the start of my career
You’re done school and have entered the workforce. Now you have to pay back your student loans, but you also have several project goals, such as buying property or having a child. In order to be better prepared for these events, which can have an impact on your finances, create a budget and define your savings strategy.How to grow your savings on a limited budget
Unexpected events
Throughout your life, you will encounter situations that will have an impact on your retirement planning. Of course, some events will be beneficial and help you grow your savings for this important period of your life. On the other hand, other events will cause you to reassess the strategies you built into your retirement plan. Starting early to financially prepare for retirement may help you plan for the unexpected and overcome foreseeable obstacles.
The pros and cons of taking a year off
When the children have left home
Your children are grown up and have left home to go out on their own. Even if you sometimes look forward to having less pressure from your parenting responsibilities, this new transition period could be a difficult time for some.
Now is the time to think about yourself, to find new ways to be involved in your children’s lives and to spend your time. You may want to do some renovations on your home.
Maybe you feel the house has become too big for you. You may think about moving into a smaller house or a condo.
Your children leaving home may also be a good time for you to plan your next big adventure: retirement.
The kids have moved out; now what?
When the house is paid off
Paying off your house before you retire is a good reason to celebrate! Now that you no longer have a mortgage to pay down, your housing costs will be significantly reduced.
With additional money at your disposal, you should take another look at your budget and put a little more money toward your retirement savings. You could also make a plan to pay off your remaining debt.
10 years before
Are you within 10 years of retiring and have yet to start planning? Now you have to make up for lost time. To accomplish this, it’s important to make planning a priority for the next few years.
At this stage, everything you do will have an effect on your standard of living in retirement. If the planning is going well, review your retirement savings strategy to ensure you are on track.
Even if you have another 10 years in the workforce, it’s important to enjoy them. Some suffer from burnout. Others have a special project they want to complete before retiring. If that’s your case, you should maybe think about taking a year off.
When retirement is close
In the last few years, did you choose investments with strong growth potential? This type of investment generally comes with major capital fluctuation.
Since you now have little time to recover major losses, it’s time to replace your investment strategy with a less risky and more balanced one. A financial advisor will be able to recommend a solution that matches your goals and your personal situation.
Five years before
Retirement is no longer a distant project. The results of your investment efforts to prepare for your retirement are becoming more concrete. At this stage, you have a relatively clear idea of what you want to do and what you’ll need when you retire.
Take advantage of the fact that your children have left home, that your mortgage is paid off and that your salary is as high as it’s ever been in your career to optimize your savings. Given that your retirement income will be lower than it is today, this is the ideal time to thoroughly examine your budget and start eliminating expenses that should no longer exist when you retire.
Are you a few years away from retiring and do you want to gradually reduce your activities so you can get more out of life? Phased retirement may be for you.
Six months before
The countdown until retirement has started. A retirement preparation course can help you prepare financially, psychologically and socially for this new stage of your life.
You should also think about settling the final details of your retirement to ensure you receive all the income you’ll be entitled to.
- Obtain a retirement income evaluation through your employer’s pension plan.
- Send a written request to receive your Old Age Security pension if you have not received a letter from Service Canada, informing you that you were chosen for automatic registration.
- Contact the Quebec Pension Plan (QPP) and the Canada Pension Plan (CPP) to apply for benefits online.
The big day
The long-awaited day has finally arrived: retirement. Take advantage of the years ahead to realize your retirement projects and enjoy your free time. Stay healthy and surround yourself with people who share your interests.
Your retirement is going well, but you are wondering whether you will deplete your savings or be able to leave a legacy. Review your budget periodically along with your financial situation to make any necessary adjustments to keep you financially stable.
Some expenses, such as those related to health care, could increase over time. For this reason, think about re-assessing what resources you need in that area.