“I want to make sure I save enough for retirement, but... how do I make sure I am
doing it the right way?”

It seems every time you turn on the TV or open a newspaper you are confronted with yet another ad about RSPs. Rates, product offers, tax deferment and contribution limits – how can you make sense of it all and make sure you have the right plan in place?

Questions? YOU have some of the answers

Everyone needs to save for retirement. How much you save and how you go about doing it is based on your current financial situation and your financial goals. Not only do you need to consider your retirement goals but you must also consider other financial goals you want to reach between now and your retirement. Only you can determine what those goals are. While you do not have to know all the answers right away, and even those can change over time, you need to have an idea of what you want to accomplish. Do you want to live mortgage free by the time you are 45, retire debt free by 55, do you foresee paying for your children’s education, a wedding or taking big vacations? Perhaps you want to save and start your own business. Whatever your plans or dreams are a financial plan needs to be put in place to reach them.

How do you save for retirement?

The most common ways people save for retirement are through company payroll savings plans, personal RSP contributions, company pension plans and non-registered personal savings. With the TFSA account there is now another way to use tax-sheltered savings for your retirement. Depending on your current and future income levels a TFSA may be a valuable addition to your retirement savings. Talk to your financial advocate to find out what savings plans are right for your situation.

Understanding your employer sponsored pension plan and other work place savings plans is key to getting a handle on your retirement savings needs. You can speak with your human resource contact to get all the pertinent information you need about your pension and savings options. They will be able to give you a statement which shows your current pension position and estimates of your pension amount at various dates. These dates are important to understand, because your retirement date affects not only your pension payments but also the amount of your Canada Pension Plan.

When do you start?

Starting sooner than later is key, but it is never too late to start. The earlier you start the more opportunity you have to add to your savings with investment or interest income. By establishing a savings habit early, as your income increases you will find it easier to meet your savings goals. It is RSP time right now and if you do not have the savings set aside to make your annual contribution you can consider taking an RSP loan. Use these funds to make your contribution and use your tax refund to pay down the loan. You get a bump in your savings, increase your interest income over time and get tax savings now. Check out www.TwoMinuteApps.ca and get started right now.

If you do not have a savings plan in place it is time to start one. Figuring out how much you can afford to save is easy by using the Financial Strength, Cardio and Flexibility tests. If you need to save more than you can afford right now these tests will help you determine what you need to do to improve your cash flow.

Retirement – Start Here

Before you pass “GO” and collect another $200 that you are unsure of where to invest for retirement, start with an appointment with your financial advocate at The Credit Union. We can sit down with you and help you balance your cash flow between current financial needs, medium-term goals and longer-term retirement plans. We C.U.™ so you can get to financially where you want to be.