Prepare for retirement: 5 elements to consider | Jobs.ca
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Prepare for retirement: 5 elements to consider

Six Canadians out of ten made no contributions to their retirement savings in 2014, according to a RBC survey. However, a majority seem to be preoccupied with the idea of being short of funds if they were to live to 100. But how should Canadian workers prepare for retirement?

According to the RBC, there is every indication that Canadians do not give enough significance to voluntary retirement planning. Only 39% confirmed that they contributed to their retirement savings in 2014 and 30% have simply not started saving even one dollar. The study on RRSPs published by the Royal Bank also shows that women are less prepared than men for active later life. To reverse this trend, Canadians would benefit from more planning.

Better control of sources of income
There are three sources of income on which Canadians can count for their retirement: the Federal Old Age Security (OAS) program, the employer’s retirement savings plan and personal savings plans (RRSP, TFSA, etc.). In Quebec, there is also the Quebec Pension Plan.

Assessing the age of retirement
This is one of the first questions that should be asked: “When do you want to stop working?” The normal age to start receiving a retirement pension in Canada is 65 years. Between 2023 and 2029, it will be gradually pushed back to 67 years for all Canadians. However, workers can decide to leave earlier if they feel they have adequately planned their retirement income. They should nonetheless expect to receive no government pension if they leave before 60 years old. 

Determining income during retirement
Planners believe retirees need on average 70% of their annual income based on their last three years of work. This rate is explained by reduced expenses and contributions, lower taxes and family responsibilities that are usually reduced. At an annual income of $50,000, an income of $35,000 is needed for retirement. 

Review savings strategies
It is good to reassess retirement planning each time an event occurs such as a birth, loss of a job, starting a business or a sabbatical year. Financial planning can also include the spouse. 

Know how to get help
There are many resources available to better understand all the details of planning. To do it, there are calculators available online. And for those who want to go further, it may be helpful to meet a financial planner who specializes in retirement, or participate in planning training offered in an establishment associated with the school system. 

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