Strategies to Alleviate Retirement Fears and Build Financial Security for Canadians
Ever had that moment where you Google your symptoms, convince yourself it’s the end, then go for a check-up only to find it’s not doomsday? Money fears often feel the same. Periods of worry about future affordability are nothing new—just as inflation rises, so do stock markets and corporate earnings. Sure, we could talk about what $1,000 invested 60 years ago would be worth today, but that’s not helpful if you, like me, weren’t around to invest back then. With careful planning, diversified income sources and expense management, Canadians can build confidence in their financial future:
1. Calculate retirement needs and revisit regularly
Start by figuring out exactly what you’ll have vs. what you’ll need for retirement. You can work with a financial planner, use online tools, or do this on your own. The key questions to answer will be how much you earn and spend now, then estimate how much you’ll earn and spend in retirement. The Government of Canada has helpful online tools to help with this: Estimate CPP and OAS). This exercise will give you a clear picture of your needs versus resources.
Now that you know the gap, it’s time to bridge it. And no, this isn’t about skipping coffee! The real power lies in time and earning potential.
2. Your first superpower
Time. Whatever you do, get into investment NOW. Start small or start big, just start now. For example, if you’re 30 and invest $300 a month at a modest 6% return, you’ll have around $430,000 by retirement. But if you start at 20, you’ll have nearly double—about $830,000—at retirement. Starting early pays off. And if you do decide to cut small expenses like coffee, make them count! Deposit the savings into your investment account regularly. It may seem minor, but over time, every dollar counts.
3. Your second superpower
Earning potential. There are countless ways to increase income: side gigs, investing in skills, or even house hacking. While not everyone has the capacity for this, if you can increase your income, be intentional about where the extra money goes. Focus on your financial goals and resist the urge to splurge!
There a few more tips and tricks that can help move you closer to an affordable retirement:
4. Delay CPP & OAS Benefits
Delaying Canada Pension Plan (CPP) and Old Age Security (OAS) benefits can increase monthly payouts significantly. For every year that you delay your OAS pension, your pension increases by 7.2%. If you delay your CPP pension from age 60 to 70, you could more than double your monthly amount. This can be a practical move if you have other income sources for those early years of retirement.
5. Manage Debt Carefully
It’s easy to wander into debt, not so easy to wander out of it. Aim to pay it off before retiring, even if it means buying a smaller home. If you’re already in debt, work on clearing it so the money you save on interest can go toward investments.
6. Health insurance
Health expenses can drain your wealth. Having comprehensive health insurance, especially as you age, is a smart way to protect your finances.
Preparing for a financially secure retirement in Canada is doable—with a little planning and some smart choices. By getting clear on what you’ll need, building your investment assets, and keeping a close eye on spending, you can feel a lot more confident about your financial future. The earlier you start, the better your chances of making your retirement years comfortable and stress-free.
Disclaimer: The information in this piece is for informational and educational purposes only and is not meant to be construed as financial advise. Please consult with a qualified financial advisor before making any financial decisions.
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