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Everyone dreams about what their lives will be like when they no longer have to report to work at a Durham Region Caterer every day. They think about sailing boats, going on vacations, and taking up hobbies, but very few people actually think about where the money for these activities is coming from. Retirement is something everyone thinks about but not enough people plan for. Don't be caught without savings. Let this article educate you on what you should be doing to plan for your retirement. Whether you're young or old, this is something you need to hear.
Most people think that the government is going to look after them after they're retired. While it's true that the government does provide old age pensions to elderly Canadians, the amount they pay is not anywhere near what you're thinking of. Most elderly people on government pensions get less per month than they would make if they were working at the Canadian franchise of a fast food restaurant. That's not nearly enough for sailing trips. For most, it's not even enough to keep their house, even if it's already paid for.
The solution, then, to a happy retirement, is to have an alternate means of income once you're retired. If you want something other than your old age cheque, you'll have to arrange for it yourself. Some employers will have retirement plans for their long time employees where a certain portion of their income is automatically diverted into their pension plan, but if you do manure handling on a farm, are self employed, or haven't been with the same employer your whole career, you won't have this advantage and you'll have to arrange something yourself.
Whether you're employed at a rotary valves factory or a medical clinic, you can have a retirement savings plan. RRSPs, or Registered Retirement Savings Plans, are the most popular and come with special provisions on taxation of the income you put into it. You can talk to your banker about opening one. Another option would be to talk to an investment counselor about starting a retirement fund. In both cases, however, the amount of money you end up with could change depending on the level of risk in your portfolio and the state of the market.
As with any type of account, the funds will accumulate slowly but surely. The earlier you start putting money in and the more you put in, the higher your returns will be. This means that you should start saving for retirement as soon as possible - ideally as soon as you enter the workforce. If you haven't, it's still better late than never. Your alternative is to continue working for your Parsippany car service until you die.
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