In today’s age of spend and spend some more the days of planning for a comfortable future are pretty much over for most average Canadians. It is pretty hard to save for a rainy day or heaven forbid retirement when you are more concerned with simply putting food on the table and making sure the kids have the latest brand name soccer shoes.
Many people simply put off saving for retirement until it seems far too late to do anything other than worry about the day when your CPP is all you have to live on. For the most part, unless you either work for the government or a very generous private company the days of having a private pension are simply over. There are very few companies that offer their employees any substantial benefits at all no less a pension plan that they may be able to live on in retirement.
There are some financial advisors who believe that it is truly never too late to begin saving for retirement and think that you may be able to accumulate enough in the last 10 years of your working life to substantially increase the amount you receive along with your CPP benefits. The reason behind the optimism is the idea that the final 10 years of your working life generally find you with much less in expenditures than the previous years may have.
Typically, the average person finds that the by the last 10 working years the mortgage may be paid off or at least beat down to manageable levels, the kids’ education is already bought and paid for and the outgoing expenses are less than in years past, provided you are living a modest lifestyle that is. The rational is that the last 10 working years that you have are also or should be the most profitable of your working career. The advice is to maximize the RRSP contribution during those last 10 years in addition to investing in some conservative stocks and other fixed interest options as well.
The balance you should strive for is the 100 minus your age ratio for which of these to hold. So a 55 year old would hold 45 percent in stocks and the remaining 55 percent in fixed interest holdings. The general theme behind the advice is simple, you are never too old and it is never too late to try and maximize the amount of money you have for retirement and that there are always a few options for growing your money at any age. Simply giving up is not an option.
