As most people know, comfortable retirement requires years of planning and saving. But in Canada, not everyone is on the right track to retire without debt. Many people are heavily leveraged with mortgages, car payments, education costs, and credit card debt. And, it’s expenses such as these that can impact your retirement savings and force you into working well into your seventies. But luckily, there are things you can do now to save for a debt-free retirement and give you the life you deserve.
Pay Off Your Mortgage
A hefty mortgage can linger well into your senior years, especially if you take out another loan with your house as collateral. Fortunately, there are a number of strategies that will help you pay off your mortgage before you retire. For one, switching to bi-weekly payments every month can quickly reduce your interest and put more down towards your principal amount.
If you have a company pension plan and your employer is willing to match your contributions, make sure you take advantage of this by contributing the maximum. Over time, this can significantly add up and give you a nice boost to your nest egg.
Create a Wealth Plan
If you’ve not already done so, now’s the time to create a detailed wealth plan that outlines all of your financial goals, debt obligations, how much you need to save for retirement, and how you will get there. Without it, you’re basically saving blindly without any real indication of how much you really need to retire comfortably.
Balance Your Portfolio
At least every three years you should be sitting down with a professional advisor and rebalancing your portfolio. This one small tip can help you keep your investments on track and in order to reach your financial goals.
Put Any Extras Into Savings
Every little bit counts! This is especially true in this day and age where retirees will need approximately 80 percent of their pre-retirement salary for each year of retirement to continue living a similar lifestyle. So every bonus, raise, or tax return you receive should go directly towards paying off debt until it’s gone. And, once you are free and clear, any extra income obtained should go straight into your savings account to help fund your retirement.
Cut Your Costs
The less you spend, the more you will have to put towards your debt-free retirement goals. Take a look right now at all the things you spend money on and see where you can shave off some of your expenses. This should include your service providers, current bank account fees, credit card fees, and insurance fees. Finding new rates through a broker can ensure that you are receiving the best prices and save the most amount of money possible.
Many Canadians are paying higher insurance rates than they should be which can seriously eat into their retirement savings. That’s why we recommend visiting us at Rowat Insurance. We will review your current insurance policies and make sure you have the best rates and right plan to help you improve your savings plan for a debt-free retirement.