Canadians are living longer, and company pension plans are getting smaller or disappearing altogether. While this can make saving for retirement even more stressful, there are some simple ways you can save more money every day and work towards a comfortable nest egg.
Pay yourself first. Set up automatic contributions to retirement accounts. If you never have the money, can you really miss it?
Start young. When you're saving for retirement, compound interest is your best friend. For example, if your investments average a return of six per cent a year, your money will double every 12 years. Getting an early start can make a big difference.
Make a budget. If you're often left wondering where your money went at the end of the month, try tracking your spending.
Bring your lunch to work. Buying lunch every day can get expensive fast. If you spend $7 a day, that adds up to more than $1,800 a year. Are leftovers really that bad?
Don't forget about your CPP. If you're like most people working in Canada, you contribute to Canada Pension Plan through automatic deductions to your paycheque, and matching contributions from your employer. Canada Pension Plan Investment Board is tasked with ensuring your CPP retirement benefits are there when you need them.
Money not needed to pay current beneficiaries is invested by CPPIB into a diverse portfolio of assets like stocks, bonds, real estate and toll roads in order to ensure that the fund is sustainable for generations to come. In fact, according to the Chief Actuary of Canada, as of right now your CPP is sustainable at current contribution rates for the next 75 years and beyond.
When you combine your CPP with your defined benefit plan at work, personal Registered Retirement Savings Plans or Registered Retirement Income Funds, and personal budgeting and savings strategy, you may be closer to a secure retirement than you think. Find more information at www.cppib.com.
