How to Start Saving for Retirement at 50 in Canada

Saving for Retirement
Close up of elderly couple sitting at table in living room manage household document pay bills using smartphone

When people reach their 50’s, they tend to think about their retirement and about Saving for Retirement. And it’s easy to see why: it’s just around the corner. Many people, though, start to panic about the lack of a retirement plan or a lack of funds.

But 50 is the new 30, so you have plenty of time to put money away for your retirement. Here’s how you can do it.

6 Steps to Start Saving for Your Retirement

Decide What You Want in Your Retirement

Knowing how much you want or need for your retirement depends on what you want for your latter years. Do you wish to live lavishly and travel the world? Or do you want to continue working part-time? Are you planning on living in your current home, or are you moving to a top-tier retirement home ( where you’re catered to?

To begin planning and saving for your retirement, you first need to determine what you want to do in your retirement. It’s the best starting point for your retirement planning.

Keep Track of Your Personal Spending

David Trahair, author of the new book The Procrastinator’s Guide to Retirement: How You Can Retire in Ten Years or Less, says that you need to take stock of your spending habits to begin saving for retirement. The more you track your spending, the better you can adjust to it, enhancing your retirement goals.

Trahair told CBC BC that tracking payments “allows people to clearly see how much they are spending and specifically on what, and then they can make changes to cut down unnecessary spending and put those savings into retirement.

It’s time you start doing the same.

Make Use of Pensions, TFSAs and RRSPs

You’ve probably been working for 30, 40 or even 50 years at this point. And if you’ve been smart about it, you would have put money away in your TFSA and RRSP accounts.

Over those three, four or five decades, you would build up a nice, tidy nest of funds that can help support your retirement. Add in an employer-sponsored pension plan or the CCP (Canada Pension Plan), and you would find yourself with a steady flow of income.

Crunch the numbers of what you have put away during those years and see how they work within your lifestyle.

Shot of a senior man drinking coffee and looking thoughtfully out of a window

Live in Your Means & Decrease Your Debt

It’s time to start penny-pinching. Cut back on your spending habits, live within your financial means and begin eliminating debt at a faster rate, if possible. At this point in your life, it’s time to reduce your debt, so you have more money in your pocket for your retirement.

Even Trahair said “that if anyone has a credit card or any other kind of consumer debt, they should “forget anything else” and get rid of that first.

You can adjust this by consolidating your debts to lower your interest rate payments, so you have more financial freedom in your retirement.

Assess Your Investments

It’s never too late to invest your money. Whether that’s a mixture of stocks, bonds and cash, or property, your goal is to achieve the highest possible return of investment with the least amount of risk (that means not losing it all). And at 50, you still have ample time to invest your money wisely into new ventures that deliver a handsome return.

Many factors will determine how much you should invest, according to iA Wealth. This includes your “tolerance for risk, other retirement income sources, savings rate and life expectancy.” They state that “your asset mix needs to be customized based on your individual situation and there’s no one-size-fits-all solution.

The best course of action is to speak with a qualified professional who has experience helping retirees looking to make the most of their investments.

Expect the Unexpected

You know at 50 that life throws curveballs at you. You or your spouse or family could suffer health problems, be forced to retire earlier or need to move into a retirement home sooner.

So prepare for it the best way you can by reviewing and assessing your retirement plan every few years. Having funds stored aside or putting contingencies in place can help you mitigate any potential problems that may arise so your retirement plans remain on track.




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