Money Your top tasks for retirement savings at every age

19:21  09 february  2018
19:21  09 february  2018 Source:   moneysense.ca

New Survey Unveils The Dollar Amount Canadians Feel They’ll Need For Retirement

  New Survey Unveils The Dollar Amount Canadians Feel They’ll Need For Retirement A new survey by the Canadian Imperial Bank of Commerce (CIBC) has found the magic dollar amount people feel they will need to save in order to have a comfortable retirement: $756,000. CM

USA TODAY’s Nanci Hellmich talks about how to save aggressively for retirement in your 20s, 30s, 40s and beyond. (Your Best Life in Retirement , MONEY).

For instance, you might compare your savings against the average retirement savings for your age group to see if you're falling behind, or getting ahead of the curve. But just how much do Americans of all ages have tucked away for their later years?

a group of people sitting at a beach: Your age only matters in as much as it can help form the list of financial ‘tasks’ you should do to prepare for your retirement, based on your situation. ROB AND JULIA CAMPBELL/STOCKSY© Used with permission of / © Rogers Media Inc. 2018. Your age only matters in as much as it can help form the list of financial ‘tasks’ you should do to prepare for your retirement, based on your situation. ROB AND JULIA CAMPBELL/STOCKSY

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Here's the average cost of retirement: How prepared are you?

  Here's the average cost of retirement: How prepared are you? Your retirement is likely to be your biggest expense in life, so take it seriously and plan for it. Leaving much of it up to chance is risky and ill-advised.How much money needed for retirement will be different for different people, but here's a look at an average figure, and what it means for you.

When it comes to savings , Americans are falling short. Nearly 70% of adults have less than ,000 in their savings accounts. Retirement funds are looking equally bleak. In fact, about half of US families have zero retirement account savings .

Are you saving enough for retirement ? Many people don't know how to figure that out. But here's a practical, fast, easy way to tell if you're on track. All you need to do is see if your retirement savings match a specific percentage of your yearly income. That percentage changes, depending on your age .

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We are all unique. We are different in ages, interests, incomes, skills, temperaments and tastes. But, when it comes to retirement savings, we also have a lot in common. Most of the things we need to do are similar, if not exactly the same. Let’s take a look at some of the “top tasks” to focus on as you move through your life. And remember that age is just a number. Some people hit milestones earlier, some later. And some move through life in their own way, at their own pace.

In your 20s: Allocating your paycheque

You enter the workforce with high hopes, trying to find the match between what you love to do and what will pay the rent. This can be a tough task as the job market continues to shift from full-time positions to short-term contracts or gigs. However you earn your money, you’ll face a big challenge: How are you going to allocate it? You may have a chunk of student debt to pay off. And you may be trying to do that at the same time as you’re trying to save for big goals, like a home, a wedding, maybe kids.

When saving into an RRSP instead of a TFSA could cost you dearly

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But even if you start saving for retirement late or have yet to begin, there are steps you can take to increase your retirement savings . "For every year you can delay receiving a Social Security payment before you reach age 70, you can increase the amount you receive in the future."

What's more, it can show you how much the amount you should have accumulated by a given age can vary depending on when you plan to retire and your expected lifestyle in retirement . Related: Are you behind on retirement savings .

You know you should be thinking about retirement savings too, because the days are gone when you could expect to retire with a generous defined benefit pension plan. But your paycheque will only go so far, and shouldn’t there be at least a little money to have a life, too? Finding a balance among all these competing demands is tough.

Your top tasks in your 20s are, first, to get a handle on your debt. Work hard to crush your student loans and any credit card balances hanging over you. While you’re doing that, open up a retirement savings vehicle, even if you have very little to put into it. It could be a TFSA or an RRSP, but at least open the account and contribute a little, every single month. One reason to start early is to have the benefit of compound growth working for you. But a much more important reason is that starting to save for retirement when you’re young, even just $10 a month, establishes a habit. As with exercising or healthy eating, good habits make all the difference over the long run.

It may be time to rethink RRSP contribution limits

  It may be time to rethink RRSP contribution limits The Registered Retirement Savings Plan (RRSP) has been one of the mainstays of saving money for retirement since it was introduced in 1957. IGM

When it comes to retirement savings , how do you stack up? According to a report from the Economic Policy Institute (EPI), the mean retirement savings of all working- age families, which the EPI defines as those between 32 and 61 years old, is ,776.

A savings guideline for every age in order to achieve financial independence and a comfortable retirement . How Much Money Do The Top Income Earners Make? (1288). The 1/10th Rule For Car Buying Everyone Must Follow (907).

In your 30s: Settling down (a little)

This is the decade when your priorities start to shift, if they haven’t already. Perhaps you fall in love. Maybe you have a child. Or you stay single and awesome. However your life may be unfolding, it will likely remain a challenge to fund your short-term goals, let alone save for retirement.

Your top tasks in your 30s are to figure out how much you need to comfortably retire. Even if you have an excellent pension plan, you may need to save more depending on just how expensive your version of “comfortably” is. You will likely need to increase the amount you save every month by making tough choices about your cash flow. This is the decade when you need to plant each foot in two separate worlds: One foot in the present, enjoying the magic and madness of your (relative) youth; and one foot in the future, to the time when you’re no longer getting a paycheque and will need a nest egg to pay for your groceries.

In your 40s: Balancing work, kids and parents

The demands of modern life can be intense. Work continues, but you may also find yourself caring for aging parents as well as your kids.

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For example, you could increase your savings rate 1% every year until you reach your target rate. This should get you in the ballpark of what you'll need. Average retirement savings by age .

Life After Retirement . Average Retirement Savings by Age . Income and savings can be taboo subjects that many people avoid asking about or discussing. When doing this calculation, don’t forget to factor in an average inflation rate of 3% or so for every year.

Your top tasks in your 40s are to stay consistent with your retirement savings habit, and to look more closely at your returns. This matters at all stages, but now more than ever because your nest egg is getting bigger. You need to know how much you’re paying in fees, and keep them in check. And you should review your asset allocation to make sure you have the best risk/reward balance based on your temperament and the time you have until retirement.

In your 50s: Becoming an empty nester

If you have kids, they may soon fly the coop. (Or fly out, return to the comfort of your basement, and then fly out again). If you can get them off the family payroll, your 50s can be a good stage for saving because your expenses may be lower and your earnings could be higher if you’re at the peak of your career.

Your top tasks in your 50s are to take a look at how your nest egg is tracking to your goal. Hooray to you if you’re on track. If you aren’t, look at what you could do differently to free up more cash to save. Could you take up a side hustle or downsize your home? Depending on when you plan to retire, you might want to start shifting your asset mix towards more fixed income. And, as always, remain vigilante on fees.

In your 60s: “Active retirement”

Retiring at age 65 years is a dated concept. It is much more fashionable these days to gradually slow work down and keep your work clothes handy for a part-time gig. At some point in this decade or the next, you might move into active retirement—a stage when you have your health and the time to do whatever you want. This stage could be very long or it could be short, depending on when you retire and how you feel. You will move from the accumulation stage of retirement savings to the decumulation stage—spending down some of what you’ve saved.

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I would also recommend that if people are behind on their retirement savings , to file for their social security on time at their full retirement age while continuing to work. You can take that social security check every month and then put it into savings , pay off your car, stuff it into your IRA

Even for people nearing retirement age (56 to 61 years old), the median savings is a mere ,000. Needless to say, most people are falling behind on saving for retirement . But how much should you have saved at each age to be on track to retire ?

Your top task in your 60s is to assemble your team. Now is the time to surround yourself with people who can help as your financial, physical and mental health needs change. Family members are key, but now is the time to find an accountant and financial advisor, if you haven’t already.

In your 70s: Living your new life

You might be as spry in your 70s as you were in your 60s, but at some point you’ll move from active retirement to a quieter version of it. For some people, that doesn’t happen until their late 80s or even 90s.

Your top tasks at this stage are to convert your RRSP to a RRIF—those are the rules after all. Depending on your situation, you might consider buying an annuity to give you the peace of mind that comes with a guaranteed income. It is also important to keep an eye on your nest egg to ensure you’ve got some buffer for health expenses, but that you’re still living your life and not being overly conservative on spending if you don’t have to be.

A retirement plan evolves over time

The top tasks for retirement savings evolve over time—just like individuals. The key thing is to stay engaged in the process to enjoy the maximum amount of financial flexibility and the minimum amount of stress.

Retirement Tip

(Presented by Scotiabank)

Skip the last minute RRSP scramble. Take control of your retirement goals with automatic contributions. Choose the amount you want to invest and the frequency, for example bi-weekly or monthly, and watch your savings grow. Talk to a Scotiabank advisor to get started or visit scotiabank.com/future for more information.

Canadians take more money out of retirement savings to pay for expenses: survey .
Canadians are withdrawing more money from their retirement savings to pay for short-term expenses despite the tax consequences, according to a new bank survey. define("homepageFinanceIndices", ["c.deferred"], function () { var quotesInArticleFormCode = "PRMQAP"; var config = {}; config.indexdetailsurl = "/en-ca/money/indexdetails"; config.stockdetailsurl = "/en-ca/money/stockdetails"; config.funddetailsurl = "/en-ca/money/funddetails"; config.etfdetailsurl = "/en-ca/money/etfdetails"; config.recentquotesurl = "/en-ca/money/getrecentquotes"; config.

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