1. It’s likely that your retirement will last longer than you thought.
Why retirement planning is important? Between work, family, friends, and projects, do you have a busy life? Do you not have much time to think about your retirement, which seems like a vague idea that is still a long way off? Under these circumstances, it’s probably hard for you to convince yourself that it’s important to start getting ready for this important time in your life.
If this makes you feel better, know that you are not the only one going through this. Angela Iermieri, a financial planner at Desjardins, gives you 5 good reasons to start planning for retirement as soon as possible so you can realize your dreams for the future.
Statistics says that the average age at which people start to retire is 64.
And Rétraite says that on average, People will spend twice as much time in retirement as they did 50 years ago. 3
Having a longer life and retiring means, of course, that you need to save more. It would also be smart to set aside more money in case something unexpected happens or your health gets worse. In short, putting away money for retirement for a few more years can make a big difference.
2. Your pensions might not be as good as you think.
Another good reason to start saving for retirement as soon as possible is that government annuities might be lower than you think. In fact, some things, such as how old you are when you want to start getting this money, will affect how much you get.
This means that you can only get your full pensions from the Quebec Pension Plan (RPP) and the Canada Pension Plan (CPP) if you wait 65 years before applying (CPP). And your pension will be cut if you stop paying into it before this age or if you haven’t always put in the maximum amount of your earnings.
Did you know?
The money you get from the government should only make up 20–40% of your retirement income. To make up the difference, you must rely on your employer’s additional pension plan as well as your own savings.
3. You’ll have more time to save as much as possible.
Most people find it much easier to invest small amounts of money often than it is to invest large amounts of money occasionally. And if you start saving early for your retirement, you’ll find it’s not as hard as you thought and even get used to it.
When you plan for your retirement, time is a key factor. If you don’t already, you should start saving what you can as soon as you can, and if you can, you should save more. This habit will also let you take advantage of the snowball effect of compound interest, which means you can make interest on interest. One more good reason to get going!
Changes in the markets
When the market is very volatile, it can be tempting to get rid of securities that are expected to go down. In fact, when you invest your savings for the long term, it’s normal for the amounts to go up or down depending on market risks. But it’s important to stay on track with your investment goals and talk to your advisor, who can help you through times when the stock market changes.
4. You’ll have less stress about money.
Even if the day you leave work is still a long way off, it is normal to worry about money when you think about it. The best way to stop worrying is to stop putting off planning for your retirement.
If you act as soon as you can and have goals and a plan in your head and on paper, you will be more likely to think about the future with confidence and calm.
5. You’ll be better able to keep up the same level of living.
If you plan for retirement ahead of time and start saving for it as soon as possible, you will have a better chance of maintaining the standard of living you want when you stop working.
You will be able to plan your budget well if you have clear goals and know how much money you will get when you retire. And if you have a plan for retirement, you are more likely to finish the projects that are important to you.
Inflation
The cost of living will have to go up, which is a shame. So, when you plan for your retirement, you must keep this in mind. This is even more important because you could lose your savings if you don’t pay attention to them. Don’t be afraid to ask for help if you need to figure out how to stop inflation.
Why retirement planning is important? Those who plan for early retirement will have a better future.
The best way to enjoy life in retirement is to start making plans as soon as possible. Talk to your advisor about it right away. He will be able to help you get ready for this wonderful time in your life.
