Over the past few years, numerous articles and studies have begun to report that Baby Boomers aren’t saving enough. In fact, a 2012 survey found that 42 per cent of boomers wish they had saved more.
So is it too late start saving if you’re of a certain age? Not at all; any savings are better than not saving at all. It just takes a good hard look at your financial health, and a willingness to do it. So, here’s how to start catching up:
Catching Up: How To Start Saving For Retirement If You Haven't Already
1. Get a financial advisor you trust
It’s always good to get advice from an expert. Find an advisor you trust who will sit with you, go over your statements and help you figure out what you need to do and how much you’ll need to save to retire comfortably. This should include an immediate, intermediate, and long term plan for your retirement. He or she should suggest ways for you to find extra savings (if feasible) and suggest efficiencies that will help you increase your retirement savings.
2. Pay off your debt
Do you still have a mortgage? Pay it off. Consumer debt? Pay that off as soon as possible. Helping out the kids? Sit with them and talk about ways they can help with their education. More and more boomers are heading into their retirement years with debt. If you can pay off your mortgage and consumer debt by your 50s, you’ll have a lot more money to put away for retirement.
3. Figure out what you’ll get from the government
People forget that they will get something from the government when they talk about retirement. The Canadian (and Quebec) Pension Plans will provide a monthly amount to all eligible Canadians who have “worked and made at least one valid contribution to the CPP to qualify for a CPP retirement pension.”
Why should you do this? Because knowing how much you’ll get from CPP is important when figuring out how much you need to save to add to it.
4. Take advantage of your company
If you haven’t looked at what your company offers when it comes to savings, then it’s time. If your company offers a RRSP-matching plan, sign up for it now. Most plans will automatically deduct an agreed-upon amount from your bi-weekly or monthly paycheque. The company will match your contribution up to a certain percentage (read the paperwork). What does it all mean? It means more, and enforced, savings for you.
5. Consider alternate revenue streams
No one wants to consider a second job at this stage in life but if you need to really save, a second job can give you that extra cash. Just remember to put the cash into an RRSP or TFSA, whichever works best for you. (See “talk to a financial advisor.”)
It can seem intimidating, but you can look forward to a retirement that is comfortable for you.