A Guide to Retirement Planning in Canada
A March 2007 survey conducted by Canada Retirement Information revealed that half of Canadians polled “believe that middle-income families are unable to save for a secure retirement. Today, with the economy in such a fragile state, Canadians must start to think about their retirement plans as it is essential every Canadian make sure they are making the right decisions to ensure they will be able to retire in good financial standing. If you are one of the millions of Canadians worried about retirement, below is an easy to implement guide on retirement planning.
Get Out Of Debt: If you are in a situation where you are drowning in debt, it is essential you implement a strategy to get out of debt. There are credit counselling agencies that can help you assess your financial situation, implement a plan that helps you pay off the debt such as debt consolidation, and create a budget that will allow you to pay your bills on-time while living within your means.
Get rid of Credit Card Debt: If you have a number of maxed out credit cards and are having problems making the monthly payments with the high interest rates, it is essential that you implement a strategy to get out of the debt. For instance, credit card debt consolidation is one solution. You can then get a secured credit card and start rebuilding your credit history.
Pension Plan Assessment: When planning for retirement, it is important to make sure you have a healthy pension plan strategy. For instance, The Canada Pension Plan is a reliable and stable pension program you can build for retirement. It is also important to consult with your employer’s human resources department to make sure you understand your employer pension plan. The Old Age Security (OAS) Pension is available to Canadians 65 years of age or older who have lived in Canada for a minimum of ten years. It is wise to apply for the Old Age Security Pension six months before you turn 65 to ensure there are no glitches in the process that delays receiving your pension payments. As well, you should talk to a financial planner about other options for retirement planning such as Registered Retirement Savings Plans (RRSP) which provide a way to grow special savings for retirement.
Live Within Your Means: Planning for retirement will often include living modestly. That is, not spending more than you bring in each month. It is a good idea to create a monthly budget to help you manage your household expenses as well as managing any debt. Adopt good spending practices such as shopping more cost-effectively. It is important to plan for the big expenses such as Christmas, vacations…etc. Make sure you can afford your mortgage repayments and if you cannot afford them, renegotiate the terms of the mortgage for a better rate. As well, it is important to implement a plan to pay off your mortgage before you retire.
While most people imagine retirement living as relaxing and having all of their financial needs met, it is important for people to understand it takes work and proper planning to achieve comfortable retirement living. For this reason, it is vital people plan well in advance of their retirement.
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