Have you been to many 50th birthday parties lately? As the peak of the baby boomers creeps closer and closer to the half-century mark, 50th birthday parties will be a more common occurrence across the country.
For those who haven't really planned or financially prepared for their retirement, a 50th birthday can be a very scary thing. Many 50-year-olds may think it's too late to start putting money into a Registered Retirement Savings Plan (RRSP), but it's not too late to start or accelerate your retirement savings. You just need to plan, plan, plan.
The first thing to do is decide what type of retirement you may be looking at. Do you want to travel? Will you be a homebody? Will you fill your time by volunteering? The standard calculation is that you will need about 70% of your current income for your retirement years, but different lifestyles will demand different income levels. Your retirement need not be expensive depending on where you live and what you want to do during your retirement years.
Service Canada's Retirement Income Calculator at www.servicecanada.gc.ca (under Online Services and Forms) helps you plan for retirement. The calculator provides you with an estimate of the annual income you may receive at retirement from:
Consult a financial advisor to help you adjust your goals and savings plans, and remember it's not too late to make a huge impact on your retirement lifestyle. For example, if a 50 year old can put $500 towards an RRSP each month for 15 years, at 5% growth per year, they could end up with an extra $130,000 or about $10,000 more per year in income for 20 years.
An advisor can look at the whole picture and help you plan for the retirement you desire. Planning now can mean the difference between doing "what you want" in retirement, and doing "what you can".
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