For a lot of people, their retirement plans were not a priority as they were dealing with the reality of the pandemic. However, amidst all of this, the routine of keeping the finances in order must be followed through with. In fact, with a lot of people having more spare time on their hands now may be a good time to take a closer look at doing some financial planning for the future.
Canadian Retirement Plans
For those who are just beginning to look into retirement plans, they soon discover that there is not just one plan that is going to meet all their retirement needs. They need to focus on building a retirement portfolio. There are several options that are available for this.
RRSP
The registered retirement plan is one that many people become most familiar with. They realize they can enjoy immediate benefits with these as well as the long term ones when it comes to retirement time. There are tax benefits that come with this form of retirement plan.
TFSA
This is another option where different types of investments can be utilized. It has the ability to hold investments such as stocks and bonds along with some others. There are rules that come with this form of savings just like there are rules that are applicable to RRSPs. The rates are quite lucrative with this form of retirement plan. One of the major differences with the TFSA is you don’t get the tax breaks that you get with the RRSP.
CPP
The Canada Pension Plan is another option for retirement that many Canadians are familiar with. Those that are self-employed want to make sure they are making contributions to this so they will have the security that this offers in their retirement years. All too often younger people tend not to realize how beneficial this plan is. It is certainly realized when the monthly cheques arrive during the retirement years.
Old Age Security
Again this is another form of the monthly payment that will be received throughout the retirement years once the eligibility age is met. The amounts will vary on the specific circumstances of each individual.
Avoiding Retirement Investment Mistakes
The cliché of not putting all your eggs in one basket is appropriate here. Investing in each of these options is going to raise the level of your financial security once you retire. It may seem a little challenging and overwhelming to do this, but each of the plans has something to offer and the important thing is to be knowledgable about them. Sometimes it just seems easy to put a bit of money in the RRSPs for example and just assume that will be enough.
Retirement still comes with a lot of expenses. Many people want to be able to do more with their free time and this takes money. You need to plan out what you want your retirement years to be. Then determine what savings have to be created to meet the demands of your wants and needs in your golden years.
In the meantime, you will want to know the tax implications of some of these plans and as a certified accountant serving Toronto and the GTA, I would be happy to assist you with this.
