Establish a Moneysaving Goal
If you want to save money for retirement, it is first important to determine how much money you need to save. This is the most important step to take, when looking to save for retirement. While you can always save money for retirement without having a goal in mind, will you have enough? You will never know unless you take the time to do the research first.
When determining how much you need to comfortably retire, examine your wants and needs. Account for living expenses, such as housing, utilities, food, transportation, healthcare and other related expenses. Next, what are your retirement goals? What type of home would you like to live in? Where you would like to live? What activities do you want to enjoy? Calculate the average cost of these. That total figure is your retirement savings goal. As an important reminder, do not stop saving even if you reach that goal early on.
Create a Budget for Yourself
Creating a budget is another easy way to save money for retirement. Why? Because it can help you determine where you can save money. Many Americans waste money and a considerable amount of it. To prevent yourself from doing so, create a budget. This budget should include expenses that you must pay; ones that you cannot live without. For example, your rent or mortgage payment and all utility bills, transportation costs, and food should be included in your budget.
Once your needed expenses are totaled, subtract that amount from your monthly income. The difference is money that you can and should put into a retirement savings account.
Eliminate Unnecessary Purchases
In keeping with creating a budget, be sure to eliminate unnecessary purchases. If you work outside of the home, do you bring your lunch to work or make your coffee at home? If not, you should start doing so. If you are 35 years old, you may be surprised with how much money you can save over the next ten or twenty years by taking this simple approach.
In addition to completely eliminating unnecessary purchases, consider reducing those that you do not want to give up. For example, do you like to eat out? Instead of eating out once a week, aim for once a month. Also, examine the packages for your phone, cable, and internet. Can you reduce their costs without having to give them up completely? If so, do so.
Contribute to Your RSSP
Do you have a RSSP plan through your employer? If so, do you currently contribute to it? If not, now is the time to start, even if you are only twenty years old. Those between the ages of twenty and forty are encouraged to contribute around 5% to 10% of their income. Those forty to sixty years old are encouraged to contribute as much as possible.
What is nice about RSSP plans is that most employers maximize your contributions. For instance, if you were to meet your company’s minimum personal contribution for the year, they may match that money for you! Yes, you do still have to deposit your own money, but the money that your employer contributes can be considered free money.
Seek Professional Help
While you can find a number of helpful retirement planning resources online, this information can sometimes be difficult to read. Sometimes, it seems as if financial experts are talking in a different language.
NOTE: If you are not familiar with RSSP plans, TFSA, CPP, and Old Age Pension plans, you should schedule a meeting with a professional financial advisor. Not only can they help you understand these great retirement programs and accounts, they can also help you develop a sold retirement savings plan. This can help to ensure that you successfully meet your goal.
