Whether you live in Canada or some other country, the steps to plan one’s retirement is the same for
all. Since we are talking from the perspective of Canadians who want to retire by the age of 60 if not
earlier, you need follow four steps to plan your retirement. By following these four steps to plan your
retirement, you will find yourself a happy retiree:
- You Need to Determine Your Expenses
Do not confuse your expenses with your income. Figure out the amount of money you need to put
towards retirement. Track your fixed income and variable expenses, starting now. You need to do this
before you can retire. In doing so, you get a better idea of your cash flow. When you are determining
your expenses, identify the expenses that you no longer need to pay once you retire.
- Consider Retirement House Planning
You can consider moving into a retirement house. You will be joined by other seniors and will have
activities and support you need as seniors. You may even find subsidized housing that provides rental
aid from the federal government. If you want to continue living in your home, given it is paid off
completely, you can do that or if it is paid off, you can put it for rent to earn money. If you want to shift
to another country where living expenses are less, you can do that as well.
- Get Rid of Debt
This is important! If you have debt, get rid of it. You need to work towards eliminating all types of debt.
You should come up with a plan to remove debt and ensure that by the time you reach retirement, you
will be left with zero debt. Start by paying off your credit cards and then any other outstanding loans
that you might have. Once you have paid off your debts, make sure that you do not get into debt again.
Also, create a budget to help you plan better and save more money.
- Get an RRSP to Save Money
You need to save money through a Registered Retirement Savings Plan or RRSP. RRSP is an account that
allows you to save money for retirement. A RRSP helps you decrease tax and promote saving. You will
not have to pay money on the amount you have placed in the RRSP until you take it out.
For this reason, you should withdraw money from the RRSP after you retire and not before. In doing so,
the money you take out after retirement will not be subject to tax. Apart from this, you can also take
other measures to save money for retirement by creating an account where you can deposit some of
your income into it.
If you want help with retirement planning or need to open a RRSP, you can get in touch with us and we
can help you out by helping you plan for a better retirement.