How to save for Retirement in Canada

By: Vincent Heys

If you’re of a certain age and immigrating to Canada, one important question you may be asking is what strategies should you put in place to start saving for retirement here in Canada.

Many are hoping to retire by 65, which means that wealth needs to be accumulated over the next 20 to 30 years. This is difficult for most people, but may be particularly difficult for those coming from a country whose currency is much weaker than the Canadian dollar. 

How to start saving for retirement in Canada, practical tips by Howzit and Vincent Heys

The main answer to this issue is to save, live within your means and ensure that you know what your retirement target is and budget accordingly. Identify how much money you will need annually after retirement and multiply this by generally 20 years. This will give you a good sense of where you need to target your savings to be.

You may decide to put your funds into a registered account where you can get the tax benefit upfront or to a non-registered account where you pay the tax upfront.

It’s also possible to re-think the concept of retirement as we currently know it. Typically, individuals retire at 65 and plan our life expectancy of another 20 years. But what if we made some changes to some of the general guidelines for retirement to better suit our individual needs? Rather than retiring at 65, we could retire at 70 or 75. We can also consider leveraging our skills and build a business or company of our own that can generate income long after the age of 65.

The fact is, some innovation needs to be brought into the concept of retirement planning. As late baby boomers, gen x-ers and millennials age in the coming years, it will become much more difficult to accumulate the amount of wealth needed for retirement. The advancement and ubiquity of technology has allowed us the possibility of generating income even after retirement. Every year that we don’t retire is a year that we can save and have less money available for retirement but that money can grow a year extra.

It may be a divergent way of thinking, but as we move into a whole new economy, it’s important to think outside of the box when considering our finances for retirement.

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