My Friend Janet asked me the following question.” How can I start planning for my imminent retirement in four years?”
I realized there are hundreds of people in the very same position as my friend, so I decided to blog my reply to Janet.
“How can I start planning for my imminent retirement in four years?”
Well Jan, great question. I have to also ask you why you waited for the very last four years before retirement to begin planning for it.
Janet is not alone in this position. There are millions of people just like her who are now facing retirement and wondering how their basic needs and expenses will be met, and knowing for the first time that the Government Pensions will not be sufficient to meet their retirement needs.
The experts have told us for years that we need to make adjustments to our spending, increase our retirement plans and also save outside of our registered retirement plans.
A few people took this advice and worked towards making some very big changes in their financial lives.
If you have a company pension, that will be a great buffer if you are only now thinking of retirement planning now.
You should decide on what percentage of your present income you will need for retirement. It is suggested that you will need between 80% – 70% of your present income.
Well Janet, all is not lost – your situation is very common, and it is also fixable.
Here are some things you can now do to get you ready for retirement.
• Pay off all of your revolving debt
• If you still have a mortgage, increase your payment. This will bring your balance down considerably or maybe pay it off completely.
• Contribute the maximum allowable to your Registered Retirement Savings Plan every
• Treat your non-registered savings like a bill you owe to yourself.
• It is important to complete all renovations to your home before retirement.
• Is your car the one you will keep for a while? If so do all major repairs before retirement. If you are thinking of a new car, purchase it before retirement.
• Open a Tax Free Savings Account (TFSA).
Janet, by your retirement you should strive to be lean on what you owe and fat on what you own. Make it a passion of yours to save your money, then save some more money and cut down your debt, and then cut down your debt some more.
The idea is to go into retirement free of all debt if possible, especially revolving debt.
Janet, if you follow a few of the tips I mentioned it will make your retirement years just a little bit easier.
My advice to everyone, begin saving for your retirement now whether you are 20 years old or 50 years old. It is never too early to begin planning for your retirement. With proper retirement planning in place it will make the difference between enjoying your retirement and wondering how you will pay for your basic needs.
Retirement planning information is available at all the financial institutions around the country. Take some time to talk to your financial institutions about your retirement plans, set some goals stay focused and be diligent. Make your contributions automatically and regularly.
Tessa- Marie Shillingford is the author of Controlling the Debt Monster. She is Personal Financial Planner, with a designation from the Institute of Canadian Bankers, and a Financial Counselor certified by the institute of Canadian Banker. She is presently a Program Facilitator of Financial Literacy at JVS Toronto. Tessa- Marie was employed by TD Canada Trust for twenty years in the retail section of the bank. During her tenure at TD Canada Trust she held various positions interacting with customers of the bank. As a Financial Advisor and Manager of Financial Services she led a group of Financial Advisors in helping customers of TD Canada Trust successfully manage their finances. Details of her book… Controlling the Debt Monster, can be found at http://www.controldebtmonster.com