Are Canadians on average saving enough for retirement? Let's look at the facts.
The 2018 Canadian savings rate (the % of your after-tax income you saved) was only 3.5%.
Experts suggest a saving rate of 10 to 15% per year may be required to afford to live comfortably in retirement.
It's difficult to say for all Canadians (since everyone has different circumstances), but unless you have a great pension plan, 3.5% is likely not enough to support the enjoyable retirement you deserve.
So what can you (and your pet!) do to start building up your retirement savings?
- Start early and invest the money. Starting to save when you're young (even if it's a small amount) makes a big difference. Investing can also help meaningfully grow your savings over time.
- Max out your employer's pension program (RPP). Not every company has one, but if yours does - jump on it. It'll force you to save, plus there may be a matching program where you get free-money.
- If your company doesn't offer an RPP, create your own - make your own forced-savings plan by putting 5-10% of each paycheque into your RRSP.
- Be consistent. Set up automatic withdrawals into your retirement savings account at the same time you're paid each month. That way, you're "paying yourself first" and the money is out of sight, out of mind.
It may seem daunting to start thinking about retirement now, but your future-self will be so very grateful.