There are not many financial goals in life more important than saving for your retirement. At this time of year, we’re bombarded with messages from banks, financial experts and the media about how much we need to be saving, where we should be saving and how far behind we are in our retirement savings. There are so many questions that need to be answered. Do I save using a TFSA or an RRSP, or both? Is it better to pay down my mortgage or save for my retirement? What about paying down my other debt? There are certainly a lot of priorities competing for a limited amount of the money we make. The whole thing is enough to make some of us want to throw in the towel and avoid it all together.
But we shouldn’t avoid it. In fact we should do the opposite and take it head on. Actually, it’s not really that complicated. Start today by beginning to save something – a little or a lot – on a systematic basis. You know, $50 per week or $100 per month. This advice is not new, or complicated, or sexy, but it is powerful. No matter the amount, the fact that you are saving something, gives you freedom. Saving will give you freedom for your future and give you the potential to take advantage of an opportunity when it comes your way or to bail you out on a rainy day.
However you choose to save and for whatever goal, beware of shortchanging your savings by paying unnecessary fees. Fees come in small bite sizes but they eat away a significant portion in the end. A recent survey we conducted with Angus Reid found that almost half of Canadians are unsure of the fees they pay to buy mutual funds – one of the most popular investments we use to save for retirement. If you add up all the unnecessary fees you pay over several decades of investing, they can make a huge difference in what you’re left with in your golden years.
At the end of the day, no matter where you choose to save your money, we get satisfaction from knowing we are helping Canadians take control of their financial destiny. With a bit of information, more and more Canadians are feeling empowered to take their saving and retirement planning into their own hands.
There is no secret to saving for retirement. It’s the same as saving for any other goal, financial or otherwise. Getting started is just the first step but it is the biggest step. And like many other goals, each step after the first is easier than the last.
This is the solution we advocate at ING DIRECT, and one that I believe in personally. Any amount, be it large or small, does make a difference. It’s easy to set up automatic payments into an RRSP account or into a high-interest savings account as a means of building your retirement savings – set it and forget it. It’s that simple.