Retirement saving – starting late is OK, and chipping away at it when you can a must

More and more ink (or more accurately, pixels) is being taken up with worried commentary that Canadians aren’t saving enough for retirement, and that our ship of state is sailing into choppy waters.

But a story by the Canadian Press (CP) that appears on MSN News suggests that there’s no need to panic – but there is a need to plan.

The story quotes Dilys D’Cruz of Meridian Credit Union as saying “if you’re 50 you still have 21 years left to contribute (to an Registered Retirement Savings Plan (RRSP)), it is not as dire as you might think.”

D’Cruz tells CP that while people “may be afraid to look at the numbers,” it’s best, as a first step, to get a financial planner and put together a plan.

Take stock of what retirement savings you have, she says in the article. Do you have a workplace plan from current or past employment? Do you have RRSPs?

Next, she tells CP, you need to consider “what you want your retirement to look like” before doing the plumbing work on your plan. “Do you want that big lavish lifestyle of travelling or is it maybe a quieter lifestyle that you want, what does it mean for you,” she says in the article.

The article cites recent research from Scotiabank that found that while 68 per cent of Canadians say they are saving for retirement (62 per cent of those age 18-34 are saving, versus 74 per cent of those aged 35 and 54), only 23 per cent say retirement saving is their top priority.

TD’s Jenny Diplock, also quoted in the article, agrees, saying that while the general rule of thumb for retirement saving is to start as early as you can, “starting at a particular age may not be realistic for some folks.”

She also suggests having a financial plan, but adds that once you commit to saving, the best way to go is to make it automatic. This will “help cement the habit,” the article explains.

As well, when a cost ends – when you stop paying daycare, or a mortgage – that’s a good time to direct more money to retirement savings, the article suggests.

“As your life situation changes and there are changes in your personal circumstances, you may find that you have additional cash flow that can be used to complement your savings plan,” Diplock tells CP.

Summing it all up, it appears the worst thing you can do about retirement savings is to do nothing at all. Save what you can when you can, and ramp up savings as living costs – debt, housing, childcare – fall by the way. As each impediment to saving falls by the way, your freed up cash can be put to use for your retirement plan.

If you’re not someone with a workplace pension plan – or if you are, but want to supplement those savings – an ideal vehicle is the Saskatchewan Pension Plan. You have flexibility with SPP – if you can only contribute a little bit in a given year, you can contribute more later; contributions are variable up to an annual limit of $6,300. Be sure to visit SPP’s site to learn more!

Written by Martin Biefer
	Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing, classic rock, and darts. You can follow him on Twitter – his handle is @AveryKerr22