Six key things when planning for retirement in Canada

In recent decades, the nature of labour has undergone a significant transformation. To begin with, it’s now extremely common for people to work for a number of different firms during their careers. Second, pension plans were far more widespread in earlier years. In 2019, just 37% of Canadian workers were enrolled in a pension plan, according to Statistics Canada (as reported by the Financial Post).

It is sufficient to state that times have changed from the days when an employee would remain at one company for the whole of their career and retire comfortably at age 65.

Retirement plans

One retirement approach is to work part-time to retain social contacts, make a little additional money, and then gradually transition into complete retirement.

There are various alternatives:

Inquire with your existing employer about working a few hours each week or taking on specialized chores. Just be cautious. We know of one manager who reduced his hours to part-time but was still harassed with inquiries at all hours of the day and night. Set restrictions for yourself and work according to the schedule. As a result, you may take up jobs whenever you choose.

Try an alternative approach: Some retirees desire to give up their 9–5 office jobs. They find employment as baristas or drive for Uber for a few hours each week. Find a job that suits your schedule and gives you time to engage in your favourite hobbies. Moreover, A quarter of Canadians surveyed claimed the epidemic had caused them to postpone their plans to retire. People on fixed incomes are concerned about having to stretch their budgets due to rising inflation, which is another cause for anxiety. As a result, working part-time can be a solution.

Write a will

Although it might seem apparent, just half of Canadians have wills. It may be difficult to think about your own death, but it must be done. Make sure to be clear about your preferences since you don’t want to leave your heirs in a muddle. Additionally, you should appoint someone with power of attorney to handle your affairs in the event of your incapacity.

Learn to be more socialized 

You will need to think about where your social contacts will come from unless you want to spend most of your retirement time with just your spouse.

There are many people who have coworkers from their workplace. While there is nothing wrong with it, you could discover that after you retire, your relationships with your coworkers fade.

It’s possible that you’ll need to meet new friends throughout your retirement. You could meet individuals through a sport like a game of tennis or a game of golf in your active early retirement. As you get older, you can start living a more sedentary lifestyle, which makes games like euchre or chess more popular. Finding activities that will help you interact with others is crucial, whatever your hobbies.

Make good financial choices

Your lifestyle choices and place of residence will affect your financial situation. When creating a financial strategy for your retirement, it’s crucial to keep those things in mind. Think about your retirement plans in Canada.

How much money does the typical Canadian have saved up? The average Canadian net worth for a person aged 55 to 64 is $690,000, according to Statistics Canada. But this also applies to house ownership. Many respondents to a recent study admitted that they had not saved enough money for retirement.

Here are a few ways to make money in retirement:

Pensions

How much money would a government or private sector pension give you each month if you’re fortunate enough to have one?

Canada Pension Plan

The amount you get from the Canada Pension Plan will depend on your cumulative contributions over the years. The highest monthly benefit is $1,203, while the typical Canadian retiree only earned $702. By entering your Canada Revenue Agency (CRA) account, you may see your anticipated amount. You must also determine when to begin receiving CPP benefits; if you wait until you are 70, your monthly benefit will be much higher.

RRSP and a TFSA

How much money have you saved in an RRSP and a TFSA? You still have time to make contributions to your retirement account if your retirement date is a few years off. Before establishing a Registered Retirement Income Fund (RRIF), which must be done by age 71, you will also need to select when you will begin taking withdrawals. However, you may retain your money in a TFSA until you pass away.

Other financial resources:

You may supplement your income by working part-time for a while. Alternatively, you might downsize and sell your home, utilizing the proceeds to help pay for your retirement.

Key points 

According to Statistics Canada, just 37% of Canadian workers were covered by a pension plan in 2019. Another source of anxiety for those on fixed incomes is the fear of having to stretch their budget owing to rising inflation. If you want to maintain your social networks and make additional money, working part-time may be the answer. According to Statistics Canada, the average Canadian net worth for a person between the ages of 55 and 64 is $690,000. In recent research, many survey participants said they hadn’t saved enough money for retirement. In 2013, the average Canadian worker made $1,203, compared to the average Canadian retiree’s $702.