Securing Your Retirement – Essential Budgeting Tips for Canadian Seniors
A recent survey has shown that Canadians are health conscious. More than 77% of Canadians are taking various steps to improve their health, and such tendencies have contributed to their life longevity.
However, over 50% of Canadians don’t have a financial plan for their retirement. The reasons behind it vary greatly, and the survey has exposed them.
- The majority of respondents (27% of Retirees & 42% of non-retirees) have admitted that they have never thought about their retirement plan.
Suppose you fall into that category of people; my post will definitely help you to gain some essential budgeting tips for Canadian seniors to secure their retirement plan.
Tip #1: Start It as Early as Possible
You might have noticed in the above chart that 16% of non-retiree respondents believe we are too young to plan for retirement. However, according to data on CHIP Reverse Mortgage,
- If you start saving at the age of 25, you will have more working years to contribute than you start at the age of 35.
Thus, you will save substantially a lot before retirement age.
Tip #2: How Much Will You Save?
According to a piece of expert advice, you should follow the “70% Rule” for your retirement savings. Suppose your retirement savings replace 70% of your income per year. Let’s assume you are earning $100,000 per year at the time of retirement. So, you should have a provision for $70,000 per year as retirement income.
Tip #3: Explore Retirement Income Options in Calgary, Edmonton, Lloydminster, & Alberta in Canada
If you live in Calgary, Edmonton, Lloydminster, & Alberta in Canada, you will have three known options to obtain retirement income.
- Government Pension Benefits
- Employer Pension Benefits
- Personal Investment Benefits
Let’s explore each option in brief.
I. Government Pension Benefits:
The following different government income options are available for Canadian citizens in Calgary, Edmonton, Lloydminster, & Alberta.
- Canada Pension Plan –CPP starts at the age of 60 & you have to pay income tax.
- Old Age Security –OAS begins at the age of 60 & you need to pay income tax. It also includes GIS (Guaranteed Income Supplement) for seniors whose income is below a certain amount.
- Guaranteed Income Supplement-GIS is based on your marital status and income. You won’t pay any tax on GIS payments.
II. Employer Pension Benefits:
If you are working in Canada, you will have employer pension benefits, such as:
- Defined Contribution Pension Plan – It’s a way you and your employer set a defined percentage (18%) of your income aside for your retirement budget.
- Defined Benefits Pension Plan – You know how much you’re going to receive at retirement. A formula decides it.
- Locked-in Retirement Account – LIRA is implemented when you leave an employer with a pension plan. You can’t withdraw your money until you retire.
III. Personal Investment Benefits:
If you can save more, you will get more at retirement if you invest your money in the following plans.
- Registered Retirement Saving Plan –Your savings account will register with CRA (Canada Revenue Agency), so you will not pay any tax until you start withdrawing your money at retirement.
- Tax-free Saving Account –You can put your retirement investment as mutual funds or segregated funds.
- Income Annuities –A saving plan that never changes with market or interest rate fluctuations and gives you a steady retirement income.
Tip #4: Take Advantage of Credit Rebuilding Service in Alberta
If you have debt in the market, your retirement planning may be affected heavily. No problem, you can take the help of credit rebuilding services in Alberta, Canada, offered by Credit720. Here are some suggestions to follow.
- Choose a reputable credit rebuilding service in Alberta– like Credit720, to guide you.
- Explore various services, including credit counseling, debt management plans, and negotiating with creditors.
- Carefully review the terms and conditions.
- Know your rights.
- Monitor your progress.
- Build healthy habits to reduce credits.
Tip #5: Gain Advantage of Personal Debt Counseling Services in Calgary, Edmonton, Lloydminster, & Alberta in Canada
As stated earlier, your debt in the market can ruin your retirement plans. Here are some steps to reduce your personal debt and follow plans for your contribution to your retirement budget.
- Find dependable personal debt counseling services in Canada -like Credit720.
- Provide accurate financial information to the counseling agency.
- Grasp your options.
- Get clarity on each query in your mind.
- Follow their recommendations and plans religiously.
- Develop healthy money management habits.
- Be patient and committed to your plans and schedules.