Cramming for retirement

 Failing to plan is planning to fail.” As cliché as it sounds, it’s a piece of advice that too many people are failing to act on especially when it comes to retirement. I speak from personal experience. I retired before I was ready and even though I had more than five years left before I could retire, I retired early, but because I recognized my mistake, I went back to work for another 8 years before I actually retired full time.

When I was in my 20s even my 30s, and my 40s I thought of retirement as a dream that I would get around to planning for maybe in my early 50’s. When I hit 50 I realized that I had better start planning as I had only had 15 years before I was going to make one of the biggest life changes I would ever make.

As I approached retirement, I started working two jobs and threw the money into my retirement pot, but starting late, is never a good idea for savings, and I did not save the magical number of one million dollars that I was told I needed to fund my retirement. I did however have a pension plan, which I thought would not be there, but it was and still is going strong.

StatsCan has reported that close to 40% of Canadians are still working between the ages of 65 and 69, and some have their parents living with them and some have their kids at home or coming back home.

Many of my friends are helping their children or grandchildren and some have done so, by increasing their mortgage or drawing out from their retirement savings or going into debt, by turning to reverse mortgages or home equity lines of credit.

Many Canadians have to rely on Old Age Security and Canada Pension Plan benefits, which give a person between $1,700 and $1,800 monthly. For married couples who made all the proper contributions, it still represents under $42,000 in gross combined income.

The government never meant for OAS and CPP to serve as people’s sole retirement income source, they expected these two programs would replace about 33% of how much a person would earn before retirement.

People often overestimate how much money they need in retirement, They don’t consider how pension contributions, unemployment insurance, and all these other deductions will become non-issues. The early a person starts to plan and with proper retirement planning, you can get a much more realistic roadmap of what you will need and how you can save for retirement.