By Chad Fraser
Life expectancy – and retirement – are getting longer—tips to prepare for post-work life, regardless of age.
According to Statistics Canada’s 2016 census data, Canadians born in that year can expect to live at 82. This is a quarter of a century older than their ancestors, born in 1920. Also, according to the 2016 census, the group of centenarians is the fastest growing in the country: there are now 8,230, an increase of 41% since 2011.
Yet very few people plan for their retirement with increasing longevity in mind. “Most people don’t see themselves living to their 90s, let alone becoming centenarians,” says Tracy MacNeil, a Certified Financial Planner with Sun Life Financial. So how to finance a long, happy retirement and ensure its security in this case?
Here are some tips that can help you do just that, whether you’re 30 or 75.
Young savers and investors: the TFSA is your secret weapon
If you plan to retire in a few decades, you already have a significant advantage: time.
“If you’re young, start saving early and often save to take advantage of compounding,” advises MacNeil. Even if it’s only $25 a month, do it.”
Pay particular attention to the Tax-Free Savings Account (TFSA), which allows your investments to grow tax-free. You can contribute up to $5,500 per year (this limit will increase to $6,000 in 2019) and carry over unused contribution room from previous years. So, for example, if you hadn’t opened a TFSA yet and were 18 or older in 2009 when it was created, you could accumulate up to $57,500 in it in 2018.
