7 Ways to retire early and happy

It’s worrying that a huge percentage of aged men and women working Canadians are heading into retirement without sufficient savings to live a happy life. According to a recent study done by Huffington post, it’s just about 15% to 20 % of middle-income Canadians that retire with enough savings.

Many people face a lot of problems when they retire simply because they didn’t save enough money for retirement when they were working. Several retirees in Canada spend their senior years in poverty. What’s more, income trends suggest that there will be many seniors living in poverty once they retire in future, especially single women?

47% of Canadians have no pension

Currently, it is approximated that nearly 47% of Canadians have no employer pension, and very few young workers have company pensions(CBC News). These figures show that the number of individuals who will be retiring without a pension will keep on raising, and many seniors will continue to spend the rest of their lives in poverty.

The main reason why most Canadians are retiring without enough savings is that a large percentage of working population is saving nothing for retirement. On the other hand, families that are saving for retirement usually have insufficient assets. It’s also important to note that a good number of working population in Canada lack knowledge of investing.

You will be surprised to discover that many people don’t have even the slightest idea about their present investment options. It’s just a small number of working population that are somewhat sure about the types of investment that they can consider to maximize their retirement savings. Another reason why most seniors in Canada retire without enough pensions is that most of them usually ignore the services offered by financial experts.

Only a small percentage of Canadians that seek the help of financial advisors to help them plan for their future

Most seniors in Canada usually opt to spend more now and not worry about the future. Some people who know very well that they have health problems can choose to spend most of their savings in the years just after retiring, instead of saving for an unknown emergency. These individuals choose to accept the risk of living more frugally if they survive.

Retirement plans in Canada are meant to provide people with a modest replacement of earnings in the case of death, disability or retirement. This is a contributory plan, and it means that all costs should be taken care of by the financial contributions that employers, employees, and self-employed pay. Other sources of retirement income in Canada include: Old Age Security program, private pension plans, personal savings, and preferred retirement solution ( which will discuss on the next post) and other investments.

Young people are encouraged to enroll into these savings plan and start saving for retirement. Nobody is young enough not to start saving for retirement. As a matter of fact, it’s better to start saving for your retirement when you are on your early 20s and early 20s.

Many people at 30 are thinking about having a family, and some of them might even be experiencing the responsibility of having a family. A good number of individuals at this age also have children. This means, that it’s very vital for you to have a retirement plan in place. (US News)

Getting in a  retirement plan at an early age

is affordable because most individuals at this age are usually adamant and healthy. The government and most providers knew this, and they are doing everything possible to make sure they offer affordable retirement plans

So how can one prepare well for retirement? How can you ensure that after you retire you are not going to live in poverty but enjoy life and have a steady flow of cash? Here are four ways to help you prepare financially for retirement.

Learn how to convert your savings to income

It’s crucial to know your investment options. Do some thorough research on what you can invest in and if you are not sure, it’s always important to hire the services of a financial expert. If you manage to spend wisely, you will have a steady flow of income from the very first day that you retire. Options that you can think about may include annuities, tax-sheltered savings and much more.

Settle all your debts

It’s always wise to pay all your debts before you retire. If you are one those people that have accumulated massive debts over the years, it’s important that you find a way of settling all your debts before you retire.

Review you insurance needs

It’s obvious that as you get older, your insurance needs will always change. For instance, if you have fewer dependents and fewer debts, you may opt to reduce your life insurance coverage. On the other hand, as you get older it’s likely that you will have more health issues, so it’s vital that you think more about your retirement needs, long-term care insurance, and critical illness.

Calculate your monthly earnings

It’s always a good idea to know how much monthly earnings you will receive from your savings, pensions, and assets. This way you will be able to plan for your savings and know your investment options. Find out how much you need to spend every month to ensure that you retire with enough savings. You may be forced to cut your spending to boost your savings for retirements if you discover that what you are saying now isn’t sufficient for your future needs.

Calculate your monthly earnings

It’s always a good idea to know how much monthly earnings you will receive from your savings, pensions, and assets. This way you will be able to plan for your savings and know your investment options. Find out how much you need to spend every month to ensure that you retire with enough savings. You may be forced to cut your spending to boost your savings for retirements if you discover that what you are saying now isn’t sufficient for your future needs.

The Bottom Line

It’s true that many Canadians are not saving enough money for their retirement, and the problem is getting worse every day. As Canada’s population ages, the retirees’ economic well-being will be very crucial to the overall health of the national economy. It’s, therefore, critical to find ways to solve this problem to reduce over dependence.(Huffington Post)

Book Your Free Financial Consultation Now

References
https://www.fraserinstitute.org/sites/default/files/Reality%20of%20Retirement%20Income_web%20final.pdf

Related Posts
No related posts for this content

jantejano

Jan is a financial advisor and an online entrepreneur. He loves spending time with his family enjoying the warm tropical weather of Maui, Hawaii.

Click Here to Leave a Comment Below

Leave a Comment: