Experts say retirement planning should start in one’s 20s

Ah, the joys of being in one’s twenties. You’re young, you’re healthy, you’re newly educated and you’re ready to make your way in the world of employment.

And, according to the experts, you should have your retirement planning well underway!

According to The Motley Fool blog via Yahoo!, “the saddest tale you can hear from baby boomers is the regret of having not prepared early for retirement.”

Not saving enough while young is something your older you will experience – in a negative way – later in life, the blog advises. “Many baby boomers found out belatedly that their nest eggs weren’t enough to sustain a retirement lifestyle,” the blog warns.

Without an early head start on saving, the Motley Fool warns, “you might end up with less than half of the money you’d need after retiring for good. The best move is to invest in income-generating assets or stocks to start the ball rolling.”

What stocks should a young retirement saver invest in? According to the blog, “Bank of Montreal (BMO) should be on the top of your list,” as it has been paying out good dividends since 1829. Other good dividend-payers recommended by the investing blog include Canadian Utilities (CU) and CIBC bank.

“The younger generation should take the advice of baby boomers seriously: start saving early for retirement. Apart from not knowing how long you’ll live, you can’t get back lost time. Many baby boomers started saving too late, yet expected to enjoy the same lifestyle as they did before retirement,” the blog warns.

So the takeaway here is, start early, and pick something that has a history of growth and dividend payments.

The bigger question is always this – how much is enough to save?

A recent blog by Rob Carrick of the Globe and Mail mentions some handy calculators that can help you figure out what your nest egg should be.

Carrick says that while seeing a financial adviser is always recommended for goal-setting, the calculators can help. Three he mentions include The Personal Enhanced Retirement Calculator, designed by actuary and financial author Fred Vettese; The Retirement Cash Flow Calculator from the Get Smarter About Money blog; and The Canadian Retirement Income Calculator from the federal government.

You’ll find any retirement calculator will deliver what looks like a huge and unobtainable savings number. However, if you start early, you’ll have the benefit of time on your side. Even a small annual savings amount will grow substantially if it has 30 or 40 years of growth runway before landing at the airport of retirement. For sure, start young. Join any retirement program you can at your work, but also save on your own. If you’re not ready to start making trades, a great option is membership in the Saskatchewan Pension Plan. You get the benefit of professional investing at a very low price, and that expertise will grow your savings over time. When it’s time to turn savings into income, SPP is unique in the fact that it offers an in-plan way to deliver your savings via a monthly pay lifetime annuity. And there are a number of different types of annuities to choose from. Check them out today!

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