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Tips and Tricks: Planning for Retirement

Tips and Tricks: Planning for Retirement

For many Canadians, retirement seems like a long way off – especially at the peak of a successful career. With the arrival of better health care, longer life spans, and news of the retirement age increasing it may very well be that the end of your work life is a fair distance away. However, it’s never too early to start the retirement planning process. Whether you’re 45 or 65 it’s important to be prepared for your retirement years. Here are 3 tips to help you get started:

1. Make Budget Plans

How much are you worth? Before implementing a retirement plan be sure to calculate your net worth and find out where you stand in terms of what you own and what you owe. Ideally, your assets should be worth more than your debts. Map out your monthly living expenses and determine where your funds are being spent, from there prioritize your debts starting with the most essential to pay off. Remember that to maintain the lifestyle you currently have you will need 70-80% of your present income after you retire. Creating a written plan will help you see where your funds are going and where they should go in the future.

2. Manage Your Mortgage

Owning your home gives you a significant advantage when it comes to planning your retirement. With each monthly payment you are building equity and, if you align your payoff date with your retirement, decreasing your need for cash flow post-retirement. If your interest rates start to fall, you might want to think about refinancing your mortgage. Make it a goal to pay off your mortgage completely by the time you’re retired, saving yourself the monthly expense of hundreds of dollars will be a big relief for both your bank account and peace of mind.

3. Think Long-Term

Now is the time to be taking into consideration how you want to spend your retirement. What kind of lifestyle do you see yourself living? Will you be traveling? Moving up North? Spending more time with the grandkids? Once the career life is over, you get to reap the benefits of your savings by beginning the life you’ve always dreamed of. Make a list of categories that outline your plans and list all of the expenses involved along with a maximum budget goal.

Saving and Building Your Net Worth Regardless of What the Markets Do

Saving and Building Your Net Worth Regardless of What the Markets Do

Wouldn’t it be nice to watch your net worth grow without having to worry about which direction the market is heading and how it will impact your investments? Focusing on some key money building truisms over hoping that your investments outperform the market is always a more sensible approach. Here are some easy tips to ensure that you grow your net worth with confidence:

1) Make Money at your Job, Not in the Market

The best return on your efforts spent during the hours of 9 to 5 is on building your career or growing your business if you’re an entrepreneur. It is not going to be in trying to get in on the latest stock pick or short term trading strategy to try to beat the market. There are simply too many variables which will be beyond your control.

2) Reduce Any Unnecessary Expenses

What expenses do you currently have which, if eliminated, would have little to no impact on your lifestyle? Spend a bit of time going through your bank or credit card statements, or better yet, wait for our spending categorization service to roll out so that Optimize can do that work for you. Either way, you need to see where your money is being spent. Once you know where your money is going, the next step is to eliminate all your unnecessary expenses. These expenses come in many shapes and forms but the easiest and least painful expenses to eliminate are fees such as banking fees, ATM fees, and credit card interest charges.

3) With Eyes Wide Open: Set it and Forget it

The one key variable you need to ensure is in place to grow your net worth is to put away a set amount of savings on an ongoing basis. Whether it is on an annual, monthly, or weekly basis is not as important as simply having a set amount which you save for your future needs. To determine this amount, you need to first specify what your goals are and when you want to accomplish them. Once you know this amount, it is your job to save this amount and save it on the specified frequency.