Learn about saving for retirement

02 April 2018 | Investing


Saving for retirement can seem like a daunting task, but it doesn’t have to be. Following these five steps can help improve your chances of investing success:

1. Start early

It’s never too late to begin planning and saving, but the earlier you start, the more time you have to benefit from the power of compounding investment returns.

2. Determine your retirement goals

Think about your goals for retirement and estimate the percentage of your current annual income that you’ll need in retirement. From there, you can get an idea of the total amount you’ll need to save in order to generate that income.

3. Choose your strategy and investments

A sound investment strategy starts with deciding how to divide your money among assets like stocks, bonds, and short-term reserves. Once you decide your asset allocation, you can implement it using low-cost, broadly diversified investments.

4. Select the accounts that will hold your investments

If you participate in an employer-sponsored plan that offers matching contributions, it’s sensible to contribute at least enough to receive the maximum match. Beyond that, your options for tax-advantaged savings include Registered Retirement Savings Plans (RRSPs) and Tax Free Savings Accounts (TFSAs).

5. Keep investment costs low

Every dollar you pay for management fees or trading commissions is a dollar less that could be earning a potential return. Over a period of 25 or 30 years these costs can eat into a significant portion of your nest egg.

A financial advisor can help

A skilled financial advisor has the training and insight to:

  • Create an investment strategy that can help meet your goals.
  • Recommend specific investments and account types.
  • Keep you focused on your objectives.
  • Monitor your portfolio during all types of markets.

Saving for retirement is the financial challenge of a lifetime. Whether you do it alone, or with the help of a professional, no amount of good luck can replace the advantages of good planning.

Important information

This material is for informational purposes only. This material is not intended to be relied upon as research, investment, or tax advice and is not an implied or express recommendation, offer or solicitation to buy or sell any security or to adopt any particular investment or portfolio strategy. Any views and opinions expressed do not take into account the particular investment objectives, needs, restrictions and circumstances of a specific investor and, thus, should not be used as the basis of any specific investment recommendation. Please consult your financial and/or tax advisor for financial and/or tax information applicable to your specific situation.

While this information has been compiled from sources believed to be reliable, Vanguard

Investments Canada Inc. does not guarantee the accuracy, completeness, timeliness or reliability of this information or any results from its use.

All investments, including those that seek to track indexes, are subject to risk, including the possible loss of principal. Diversification does not ensure a profit or protect against a loss in a declining market.