It is everybody’s dream to have a happy retirement. You need to have a secure future where all your financial matters are settled and there is enough money to spend without worrying. Achieving this goal demands planning, preferably in consultation with a financial advisor or planner who understand the real value of managing your finances before and after retirement life. However, you can also follow online guide and tips written by the Financial planning experts to help out people for getting best retirement planning advice.
When to start planning for retirement
The first question that comes to mind is when should you start planning for your retirement? In Canada, you can choose to take your old age pension at 65 or 70. In the modern era, there is no fixed age for retirement. Keeping that in mind, you should start planning for retirement as soon as possible. If you will delay in this regard then it can spoil your entire retirement life with unwanted financial hurdles.
A proven or wise approach is to start retirement planning in your 20s. The sooner, the better. It will give your money more time to grow and provide ample opportunities to improve your financial plan with better investment and saving options The key is to plan early and plan strategically. Saving money will always seem difficult at first but the long-term benefits outweigh minor hurdles. A good retirement financial plan prepared by the certified and experienced financial planners can guide you more precisely and professionally throughout your life.
How much should you save
Knowing exactly how much you have to save for your retirement is an important question to answer. To proceed forward, make an estimate of how much you earn and spend. Also, consider how your expenses are expected to increase or decrease in the future. This will help you determine the amount of money you need to save every month to achieve your goals.
How to save money for retirement
There are various retirement plans that you can opt for. The choice depends on your monthly savings and personal preferences. If you’re living in Canada and looking to start an effective retirement plan, here are two reliable options that you can use and get success before or after retirement:
Registered retirement savings plan (RRSP)
An RRSP is a Canadian account for holding savings and investment. It was introduced in 1957, in the Canadian Income Tax Act with the aim to promote post-retirement savings and facilitate employed and self-employed citizens. It’s basically an excellent opportunity for the young people who want to save for the future.
By signing up for an RRSP, you can save considerably in taxes. RRSP allows you to contribute up to 18% of your last year’s income. You don’t have to pay tax on the money you save in your RRSP account, or any interest you earn on it until you withdraw the money.
Tax-free savings account (TFSA)
Introduced in January of 2009, a TFSA is a registered account in Canada. This savings plan offers special tax benefits and lets you save money with ease. The contribution may include cash, mutual funds, stocks and bonds. Any income earned is tax-exempt, and unlike RRSP (Check what is best TFSA or RRSP), you don’t have to pay tax on withdrawal. This means your earnings are compounded tax-free over time.
So, start planning early and save for the future. A reputable financial planning company in Edmonton or any part of the world can greatly help you streamline your financial matters including retirement and insurance. Consult a qualified financial planner to discuss your situation as they usually have years of experience in providing best and effective retirement plans to their clients!