How to create a retirement budget that works for you
If you're like most Canadians, you're probably not saving enough for retirement. In fact, a recent study found that less than half of Canadians are investing in tax-effective savings plans.
Creating a retirement budget can seem daunting, but it's actually not that difficult. The first step is to figure out how much money you'll need to live comfortably in retirement. A good rule of thumb is to plan for 70-80% of your current income.
Once you know how much you'll need, you can start planning where that money will come from. For most people, a combination of government benefits (like Old Age Security and the Canada Pension Plan), workplace pension plans, and personal savings will be the best bet.
There are a number of ways to save for retirement, but one of the simplest is to set up a dedicated retirement account like an RRSP or TFSA. If your employer offers a workplace pension plan, make sure you're contributing enough to get the maximum benefit.
Once you have a plan in place, it's important to stick to it. Review your budget regularly and make adjustments as needed. And remember, the sooner you start saving, the better off you'll be in retirement.
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