Regardless of whether you’re saving for a new home, a business venture, or setting up for a family, planning for your financial future (and the financial future of your significant other) is crucial. Sure, you can set up automatic deposits to your savings account for long-term goals, but looking even further ahead to retirement specifically is equally as important – though it may not seem like it right now. It’s a reality that shows in the numbers; TD Canada Trust recently published a survey that showed 20 per cent of working Canadians don’t contribute to their retirement savings, and 16 per cent of them haven’t thought about retirement contributions at all.
“As a couple, it’s always important to have a retirement plan that meets the needs of your long-term goals,” said Jenny Diplock, associate vice-president of Personal Savings and Investing at TD Canada Trust.
Of those surveyed, 23 per cent also said they haven’t looked at their retirement savings plan in over a year – something that is critical when planning for the future. The first step in creating a responsible retirement plan, said Diplock, is having that first hard conversation with your partner.
“It may be difficult to be on the same page, but having a conversation now could mean reaching your combined goals more easily and without adding any stress to the relationship.”
Top 3 tips to start retirement planning
Start ASAP
Regardless of your age or situation, the earlier you plan for your retirement, the easier it will be to save. The number one tip for planning for retirement is to start as soon as possible. That way you’ll need to put away less each month and will have more time to earn a larger amount of compound interest.
Talk to someone who understands this stuff
It’s also important to get regular advice from a financial advisor. Doing so will give you a sense of what you need to do to achieve your goals. Your advisor can also give you a sense on how inflation will affect your savings in the future; the cost of goods and service will increase and reduce the buying power of your savings over time. They can also review your budget to figure out where you can cut back and how much you can afford to put away each month. It’s also important to create a debt-repayment plan, on top of straight-up saving, so you don’t have to worry about debt in the future.
Talking to a financial advisor is as easy as walking into your bank and asking to speak to one. And the best part? It’s free.
“Working with a financial advisor can bring added value to encourage you not just to save more, but also to help guide you on how to start saving to help meet your needs,” said Diplock.
Decide on tactics
After you decide how much you can afford to save each month, it’s time to decide how you’re going to do it. Once again, you can divert a portion of your pay cheque to savings via automated tools (most banks can easily set this up for you). However, you should also make the most of any employer-sponsored plans, which can be very beneficial in the long run. Then, research different investment tools and registered savings plans that most fit your needs.
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Talking about financial situations with your partner can be stressful and uncomfortable, but having that conversation can be an important step in planning for the future. Speak with your financial advisor and your significant other, and you’ll be more comfortable in knowing you’ll be ready for the future.
The above survey, published by TD Canada Trust, was conducted by Environic Research Group and included 6,021 Canadians 18 years or older with 3,643 of those being working Canadians.