Money & Career

Are you saving enough money for retirement?

Are you saving enough money for retirement?

© Franklin Image by: © Franklin Author: Canadian Living

Money & Career

Are you saving enough money for retirement?

It's a question an increasing number of Canadians have on their minds: "Do I have enough money for retirement?" Many, unfortunately, have to answer no. There's no one dollar amount that people need to have in order to live well in their golden years.

It depends mostly on how much you think you need to fund your retirement goals. It is difficult to know just how much you'll need in your post-working life, but you'll definitely know if you're falling short.

Here are four signs that you may not have enough money to retire.

1. You still need to work
Some people choose to work well past retirement age because they like what they do and enjoy the mental stimulation and social interaction. Many others, though, work because they have to.

By 65, working should be something you want to do, not something you must do. If you think you'll have to continue the daily grind well into your 60s and 70s, then you haven't saved enough.

2. You're still mired in debt
Debt is a retirement killer. If you have a ton of credit card debt or still have a large mortgage to pay off, it'll be hard to take that big European vacation or even spend your summers in Florida. Why? Because you'll have to use most of your savings to pay down that debt. Any outstanding balances should be cleared by the time you cash your last paycheque.

Page 1 of 2 -- Having trouble meeting your retirement goals? Find out what you can do to change that on page 2. 3. There's no money in your RRSP account
Here's a clear sign that you're not saving enough: Your RRSP is empty. The closer you get to retirement, the more money you should have in your account. Pretty obvious, right? Well, a lot of people don't use an RRSP and others simply don't contribute enough every year. If you think your balance looks low, then you could be in trouble.

4. You can't meet your retirement goals
Retirement should be fun. For many, it's a time for travelling, visiting family or playing golf all day long. To achieve those things, you need to plan and save. It's never too early to sit down and write out retirement goals and then see how much everything you want to do will cost. If you find out that you can't fund those goals, then you'll need to start saving more.

The only way to really figure out what you need for retirement is to sit down with a pen and paper and look at your expenses. Think about what you want to do after you stop working and how much you'll need to pay for that lifestyle. Factor in inflation and medical costs, too; with people living into their 90s these days, it's better to be conservative. Don't wait until you're 65 to do this either – the earlier you start planning (and saving money) for retirement, the better off you'll be.

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Are you saving enough money for retirement?