(NC)-Over the several years that Desjardins Financial Security (DFS) has conducted its retirement survey, two themes have always come up: most Canadians avoid retirement planning and they're sure they haven't saved enough. So, how prepared are you?
A) You're totally confident about your financial security and retirement plans, or;
B) You know you haven't saved enough, but now you're ready to make a plan.
If you answered B, these experts from Desjardins are here to help you get started.
Djamal Saleh, Regional vice-president of sales, Individual Savings Products
1) What does retirement look like? Will you be spending your retirement traveling the world or will you just keep on working? Actually, in the most recent DFS retirement survey, 56% of respondents expected to do just that. Many said it was because working kept them active. But the most popular reason was financial. It might be nice to think that you could continue your current working lifestyle well into your 80s. But life has a way of throwing you curve balls. The reality is that less than one retiree in five continues to work. In fact, events like job loss, a disability, becoming caregiver to a loved one, or simply fatigue can change your plans in an instant. This is why it's important to visualize what your life might look as part of creating a solid plan.
Daniel Villeneuve, Tax Specialist
2) How much will I need to retire? This is a very common question so it's important to remember that you'll likely spend 25 to 30 years in retirement. For example, the average 55 year old woman who is a non-smoker will live to 86 while her male counterpart will live to 83. That being said, you will likely need a retirement income of about 70% of your gross working income.
Here's a snapshot of the type of income sources you may have if you were retiring today:
1. An employer pension, if it was available to you
2. The Canadian Pension Plan, on average about $6300 per year
3. The Old Age Security Pension, on average about $6500 per year
4. Savings in an RRSP and/or non-RRSP
Since future retirees have no control over the amounts of the first three sources of income, creating a substantial nest-egg within your RRSP and regular savings accounts will be an essential part of your written retirement plan.
Angela Iermieri, Financial Planner
3) Review your plan The golden rule to ensuring you have saved enough is to regularly review your objectives and adjust your plan as required, as circumstances can change quite often. For example, there may be changes in the tax rules, new laws, interest rates and public pension plans that may affect your goals. But if you stay flexible, all this is manageable, giving you much better odds of attaining your retirement goals.
For other retirement planning tips, tools and calculators, visit the Thinking About Retirement section of Desjardins Financial Security's website at www.desjardinslifeinsurance.com.
(NC)-Owning your own home is an exciting proposition and an achievable goal for most Canadians. The number one reason many become homeowners is pride of homeownership and the stability and security that comes with it.
Buying a home can also be a solid investment and provide tax benefits.
In Canada, you are not taxed on any investment gains made on the sale of your primary residence. So, for example, if you buy your home for $200,000 and sell it 5 years later for $250,000, you do not have to pay income tax on the $50,000 you earned from the sale.
Another advantage is each time you make a mortgage payment, you are putting a portion towards the principal balance of your mortgage, which builds equity in your home. This is a better use of your money than giving rent to a landlord and is a good long-term investment.
Owning a home also means that you can make your own decisions on decorating, home improvements, location, etc. In a recent survey conducted by Genworth Canada, 91 per cent of first-time homebuyers said that homeownership may mean more work but the effort is well worth it.
When it makes financial sense, buying a home is often a wise, secure and emotionally satisfying move to make.
For more information on buying a home visit Genworth.ca