How to Stay on Track for Retirement
Whether you’re planning to leave the workforce in five, 10, or even 30 years, it’s vital to stay on top of your retirement plan. Statistics Canada found that since the 1970s, the number of Canadians with an employer group retirement savings plan dropped from 46% to 37%. With the number of employer group retirement plans decreasing, it’s more important than ever to follow these five tips to stay on track for retirement.
Talk to a professional and create a financial strategy
Working with an advisor to create a financial strategy allows you to live your best life now, without jeopardizing your retirement in the future. A financial strategy helps set goals into perspective and allows for adjustments if need be.
I will help organize your current finances and achieve your financial goals head on. With a financial strategy, clear set goals and a tangible course of action, you’ll feel comfortable about your financial future.
Get professional retirement advice
Where better to get advice about retirement than from someone who specializes in retirement planning, investment strategies and money management? Other than medical situations, paying for financial advice is probably the one profession that’s worth the cost.
Without professional retirement advice, it’s up to you to figure out how to retire with financial stability. Are you prepared to do that? People live a large portion of their lives in retirement and professional advice can help you make the best decisions based on your personal situation.
Create a retirement-friendly budget
It’s very common for people to get wrapped up in their day-to-day finances and forget about their future. If you’re tight on money now, a budget can help improve your current and future situations.
Even small contributions to your retirement savings plan can go a long way over time as they quickly add up. Adding retirement savings (no matter how big or small) into your monthly budget will help achieve retirement success.
Turn unexpected into retirement savings
If you receive a bonus at work or an unexpected cash windfall, it’s a fantastic opportunity to add some extra money into your retirement savings. Unexpected money is very easy to waste, and if you’re not on track for retirement, you owe it to yourself to save for your future.
It’s always a good time to start planning for retirement
If you think you’re too young to start planning, think again. Thanks to compounding returns even small investments in your 20s can grow into big savings for your future. How you tackle retirement in your younger years may look different than it does if you’re in your 40s, but it’s a great idea to start thinking about it and planning for it sooner than later.
When it comes to saving and planning for retirement, professional advice can go a long way. Whether your retirement is in the near future or several years down the road, it’s always a good idea to plan ahead and seek professional advice. Contact me today if you want to create a retirement plan or check in on your current plan to ensure you’re on the right track towards a successful retirement.
Common Investment Myths – And How to Break Them
Let’s talk about investment myths. Have you started investing yet? If the answer is yes, think about the last time you sat down with a financial advisor and reviewed your portfolio to ensure your investment strategy is still aligned with your goals. If the answer is no, ask yourself why not? Maybe it’s because you don’t think you can afford it, maybe it’s because you’re afraid of the risk versus reward or maybe it’s because you don’t see the value in paying fees.
Here’s the good news, today I’m debunking common investment myths. Actually, I’m going to shatter them. Whatever the reason may be that’s holding you back from reaching your full investment potential, it all ends now. If you’re hesitant about seeking financial advice, investing in the market and exploring different investment options, don’t worry because other people are too – that’s why there are so many common investment myths.
The key is to tell the truth about the current state of investing and help Canadians implement an investment strategy that you’re comfortable with.
Here are the real answers to three common investment myths:
I can’t afford to invest
Yes, you can. Everyone, whether you’re 16 or 56 can afford to put a portion of your after-tax income towards investing. The percentage varies depending on your monthly household expenses and individual disposable income, but yes everyone can afford to invest. So often people feel that saving investing are just for the wealthy – and that’s just not true.
I don’t need professional advice
Oh yes you do, everyone does. Why? Because there is so much more to creating an investment strategy than choosing the right stock at the right time – and I don’t do that because that’s not what smart investing is about.
The truth is investing is about finding solutions that align with your short term and long-term goals as well as your risk tolerance and time horizon. The Manulife investment philosophy is “There’s a difference between access to investments and investing successfully. Managing money wisely is a full-time job which takes experts with significant experience and skill.”
On a side note, timing the market to buy in on the absolute lowest day of the year and selling on the absolute highest day of the year to gain the maximum profit is another common investment myth. That doesn’t happen.
I shouldn’t have to pay fees
Well yes you should. In life we all have to pay for a professional service. I can’t think of a scenario where you get a service for free – except for the library. If you want the best dentist then you have to pay for it. The exact same principal is true when it comes to investing.
Of course, you can open a self-directed online brokerage account and manage your own money, but do you have the years of experience and professional expertise of a financial advisor? This is the real reason why paying for a professional service is worth the cost. It’s about access to investments (because you could do that yourself online) it’s about the experience and the expertise.
I hope this helps overcome some of your hesitations when it comes to building a relationship with a financial advisor and creating an investment strategy that fits your individual needs. If you want to discuss other common investment myths then let’s chat.
*This content was originally created by Manulife Securities for information purposes only. It has been distributed for advisor publication.*
Is a RESP on Your Back to School Shopping List?
If not, then maybe it should be. Saving for a child’s education is important because it encourages younger generations to pursue a college or university degree while relieving some of the financial burden associated with higher learning. Investing in a Registered Education Savings Plan (RESP) helps you achieve the financial goal faster.
Now that it’s time for back to school let me ask you a question, how would you spend $26,819? According to The National Post, that’s the amount of debt your child may owe in student loans after graduation.
In fact, debt has become such a source of stress for students that some universities have started to invest in programs to help students deal with the mental health issues that student debt can cause.
Back to school is the perfect time to start a budget
Now is the time to start thinking about money and wondering if your child will have enough for school essentials such as a laptop and textbooks - on top of tuition. A RESP can help plan – and pay for – expenses. Parents and grandparents can open a RESP and supercharge your savings by accessing free educational grant money from the Canadian government and tax-free investment growth.
Here’s how a RESP can help save for back to school:
Starting early comes with savings benefits
Whether you have one year, 10 years or 17 years to save you can always help your child get ahead by giving them a financial opportunity.
If you start saving for your child’s education from birth, you may be eligible to receive up to $8,500 by the time they turn 17 through the Canadian Canada Education Savings Grant (CESG). Additional government assistance is available to modest-income families through the Canada Learning Bond.
It’s also never too late to start saving
If you didn’t have the financial capacity to start saving at an early age, it’s OK because you can carry forward your grant room on contributions up to $5000 per year. It’s important to define your savings goal based on your income. If you can afford it, you will maximize the annual $500 CESG by investing $2,500 per year into a RESP.
If your child is working part-time, consider asking them to contribute their own RESP. This helps ensure you take full advantage of the government grants and teaches your children financial responsibility at the same time.
Money is such a big part of attending college or university and although financial aid may be available, you can ensure your child accepts their acceptance letter by saving for their future with a RESP.
If you want to help your child transition to adulthood without the added stress of debt, let’s talk about saving for back to school with a RESP.
(Photo from I'd Pin That)