When you begin planning for retirement, the sooner you start, the better. Having a secure retirement requires a well thought out strategy, investing in the right products, and understanding the tools available to you. Here are some of the top strategies that Canadians should consider when approaching retirement.
1. Invest in Tax-Advantaged Accounts: Tax-advantaged accounts are a great way to save and invest while minimizing your liabilities. There are a number of accounts available to Canadians such as RRSPs, Tax-Free Savings Accounts (TFSAs), and RPPs. Make sure to take advantage of all the eligible retirement accounts that are available to you to maximize your savings for retirement.
2. Diversify Your Investments: The key to any smart investment strategy is diversification. Make sure your portfolio is diversified with different types of investments such as stocks, bonds, mutual funds and real estate. This will help protect you from market swings and also provide potential upside to your retirement savings.
3. Employer Pension Plans: Many employers offer pension plans where employees can contribute pre-tax dollars to their accounts, which can be a great way to maximize your retirement savings. Employer-sponsored pension plans usually provide a matching contribution based on your contributions, which can greatly boost your retirement savings.
4. Utilize Financial Advisors: Working with a qualified financial advisor can help you build an optimal retirement plan based on your goals and financial situation. An advisor can provide additional expertise, help you manage your investments, and create a plan specific to your needs.
5. Understand Your Risk Tolerance: Many investors don’t fully understand their risk tolerance when it comes to investing and savings. It’s important to understand the amount of risk you’re comfortable with when it comes to investing for retirement. If you don’t understand the risk associated with different investments and products, it’s best to consult a financial advisor.
These are just a few of the strategies you should consider when investing for retirement. A secure retirement is within reach when you understand the tools at your disposal and have a plan for maximizing your savings. Investing for retirement should be a priority, no matter how old you are, and the sooner you start, the sooner you can start anticipating a comfortable retirement.