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- By Karlene Antoine

You may realize by now that employer pensions and federal government benefits may not get you comfortably through your retirement years. More so if you are accustomed to earning a lot and would like to keep up your lifestyle or you plan to explore the world when you retire.


Added to that, Canadians are “living and staying active longer”. This increased longevity and activity comes with higher spending rates that require heavier nest eggs.

How can you prepare:

  • Examine the time horizon of your investment. Consider your age and determine how long and how much you have to set aside withstanding your current financial status. Consider all your other financial goals or commitments for example: mortgages, education, and kids. Additionally, be mindful of emergency expenses that may arise before and after retirement.
  • Research different types of investments and investment portfolios to find the one that is most suitable for your time horizon and your goal. Some investments are geared toward long-term investors while some are geared toward shorter-term investors and may have varying levels of risk depending on your age, for example.
  • Find a balance between your budget and your spending habits to align with your earnings and your retirement plan. Automate your investment contributions to go directly to your investment account every month to ensure that you make it a priority.
  • Evaluate your performance periodically to ensure that you are on track to achieving your desired amount for retirement. Be cognizant of ever-changing factors such as new laws, federal benefits, investment types or inflation that can have major positive or negative impacts on your nest egg.

 

The bottom line

No matter what type of investment you choose, or investment account (TFSA or RRSP or other), it is important that you revisit your retirement plan to make sure that you hit your target and not miss it. No plan is set in stone, be committed to improving your financial literacy to ensure that you are maximizing your reserves.