To quote Abraham Lincoln, “And in the end it’s not the years in your life that count, it’s the life in your years”. The progress of health care has contributed to the increase in lifespan of human beings. A longer lifespan means long twilight years. In other words, it means a long retirement period when one may not be able to earn a living due to growing age and failing health conditions. To make sure that you live your retirement life in a comfortable manner, you have to save for your retirement well in advance. If you are not sure how to go about fulfilling this task, this article is for you. Here we tell you about some of the factors to consider while planning for your retirement savings,
Calculate the time left until your retirement
Time is a crucial factor to consider when planning for your retirement savings. How much time you will have until you retire will depend on many factors such as your health, how much savings or debt you have and the retirement lifestyle you want to have. Once you have set a retirement goal, you are ready to take the next step for planning.
Estimate how much retirement income you will need
Try to get an idea about out how much money you will need to pay for the retirement lifestyle you want. Be realistic in your approach while estimating your monthly expenses after retirement. Apart from the basic necessities needed to maintain your lifestyle, you should pay attention to factors such as medical expenses, leisure activities, vacations and higher cost of living due to inflation, etc. Once you add up all the factors, you will have an estimate of the money you will need for your retirement life.
Create a strategy to build your retirement fund
Building a retirement fund is a long-term goal. To succeed in it you will have to create a strategy first. Take a look at your sources of income and your current expenses. Estimate how much you can reasonably save for your retirement every month until you retire. Also, don’t forget to consider the sources of income you’ll have during your retirement, such as your company pension and government pension plans like CPP and OAS.
Let your savings grow tax-free
Taxation is something that you need to keep in mind at every stage throughout your retirement planning. Using savings accounts that have special tax advantages like RRSPs (Registered Retirement Savings Plans) can help you maximize the money you save for retirement by reducing the amount of tax you’ll pay on your investments.
Keep track of your plan
It’s not enough to plan for your retirement savings. You will have to keep track of the progress of your plan. Revisit your plan at least once every year to take stock of it. Continue to monitor your finances and make adjustments or changes if needed. A financial advisor can help review your plan to reach your retirement savings goal.
This post contains sponsored links from Sun Life Financial.