May 27, 2024

The best time to start saving is now – Millard

Even if you’ve reached age 40 and beyond, it’s never too late to start saving for retirement.

So writes Brett Millard in Kelowna’s Castanet.

“For those in their 40s, traditionally called `over the hill’ and who haven’t yet begun saving for retirement, the thought of catching up can feel daunting. Especially in the face of record-high costs of living and other financial challenges,” he writes.

But, he writes, there’s no need to worry. “While the task may seem formidable, it’s never too late to start saving for retirement. With careful planning, discipline and a proactive approach, Canadians in their 40s can take meaningful steps to secure their financial future,” he explains.

First, he writes, you need to fully understand your financial position.

“Gather information about your income, expenses, assets, and debts to get a clear understanding of where you stand. Evaluate your spending habits and identify areas where you can cut back to free up funds for retirement savings,” he advises.

Next, it’s time to set “clear and achievable goals.” You need, he writes, to “determine how much you need to save for retirement based on your desired lifestyle, retirement age, and expected expenses. Break down your goals into manageable milestones and track your progress regularly to stay on target.”

The third step is to focus on your debt, which is a barrier to saving.

“High-interest debt can be a significant obstacle to saving for retirement. Prioritize debt repayment to reduce interest expenses and free up funds for retirement savings. Focus on paying off high-interest debt first, such as credit card balances and personal loans, before tackling lower-interest debt such as mortgages or student loans,” Millard explains.

With debt managed, goals set, and finances clear, you can next try to “maximize contributions to retirement accounts.” Millard advises us to “take advantage of employer-matched retirement accounts first,” then look at registered retirement savings plans and TFSAs.

The sooner you start, the more you will take advantage of compounding, he explains.

“By investing your savings wisely and allowing them to grow over time, you can harness the exponential growth potential of compound interest to accelerate your retirement savings. Start investing early and regularly to make the most of compounding returns,” he says.

His last bits of advice are to consider seeking professional financial help, to be flexible with your savings strategy through the ups and downs of reality, and to “stay motivated and consistent,” and to stay focused on the long-term.

This is all great advice that we wish we had followed better in the past! We can add one additional “welts” of experience, such as avoiding investing in trendy things you don’t really understand, or tapping into your retirement nest egg for other non-retirement purposes.

Do you have little bits of retirement benefit from different jobs sitting in different accounts? If these amounts aren’t locked in, you may be able to consolidate them within the Saskatchewan Pension Plan. There’s no limit on how much you can transfer into SPP from an unlocked RRSP, and through SPP you’ll have the retirement options of a lifetime monthly annuity payment or the flexible Variable Benefit option.

Check out SPP today!

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Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.

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