Did you know that a whopping 70% of Canadians think that they won't have enough time to save an adequate amount of money for their retirement?
Most of them believe they'll retire before they turn 65, which sounds like a lot of time at first. However, the old saying that "time flies" is certainly true when it comes to planning and reaching retirement age.
Are you worried about planning for your future retirement? Keep reading to learn everything you need to know about retirement.
How Much Money Do I Need to Retire?
One of the biggest questions related to retirement involves money. It can feel intimidating trying to figure out how much money you'll need in the future so that you can live in comfort and without worry. The last thing you'd want to do is be stuck in a one-room apartment eating ramen noodles for breakfast, lunch, and dinner.
Rather, you should take the FIRE strategy to heart. FIRE is an acronym that means Financial Independence Retire Early. There's no getting around the fact that you'll need a lot of money in the bank to retire early.
The general rule of this strategy emphasizes your savings account. Every month, you should be putting half of your paycheck into your savings and avoid touching the bulk of it until retirement. Over time, you'll have a huge net to fall back on, especially when you factor in the accumulating interest.
The strategy doesn't stop there, however. You're not expected to live an uncomfortable life until retirement. Instead, this method allows you to take 4% of your savings out of the account each year.
Of course, this plan only works if your savings accounts are earning you more than 4% in interest each year. If you still need more money in the account before this happens, then it's a good idea to wait until then. As a rule of thumb, you should have around 25 times your annual income by the time you retire, allowing you to maintain your usual lifestyle for the rest of your days.
Having a significant amount of money will come in handy during potential emergencies too, including those related to health, family issues, and more.
Retirement Age in Canada
If you use the right financial strategies as early as possible and stick to your goals, you could end up retiring at the impressively young age of 55 or even earlier. This will give you so much more time to sail the seas, explore the world, or do anything else you've always dreamed of.
On the whole, most Canadians retire around the age of 65. This is about a whole extra decade of working and waiting, which is why it's in your best interests to start planning and saving so that you can get the most out of your retirement and life in general.
By following the FIRE plan, it's possible to retire in your 40s or even as early as your 30s, but it depends upon a lot of factors, including your dedication.
Instead of being left to crunch the numbers on your own, the Canadian government has provided its citizens with a handy retirement income calculator. To begin using the calculator, be sure you have all the relevant information and documents available, such as your QPP or CPP (Canadian Pension Plan) statements, your recent RRSP statements, employer pension info, as well as any extra income or survivor pensions that may help along the way.
The more information you can put into the calculation, the more accurate the prediction will be.
To better plan for the future, you can calculate different scenarios and see what that future might hold. For instance, how would your retirement be affected by a change in careers? What if there was a health emergency and you were put out of work for 6 months or longer?
Not every scenario needs to be negative, however. You could also see what it would look like if you were given one or more promotions. Just don't count too much on winning the lottery anytime soon.
Life Expectancy Calculator
Did you know that the oldest person to have ever lived was a French woman named Jeanne Louise Calment who ended up celebrating 122 birthdays? When people reach an impressive age, often 90 or higher, journalists like to ask them for their secrets to a long life. Some people say eating chocolate while others say drinking soda or alcohol, among other wacky things.
While this is fun to consider, there's no science or math to back up their claims. When it comes to planning your retirement, it's better to rely on a life expectancy calculator. After all, there are so many factors that go into the longevity of a specific individual, from genetics and diet to exercise habits and location.
Unlike the United States of America, Canada isn't grappling with an obesity epidemic. In general, Canadians also don't smoke as much as Americans, nor do they have as many cases of hypertension. These are just several reasons why Canadians live a lot longer than their southern neighbours.
Gender is another consideration. For example, women tend to live longer than men for a variety of reasons, including men's general preference for smoking cigarettes. With this in mind, it's never too late to start doing what you can to not only extend your life but make sure it's comfortable instead of painful.
Exercising on a regular basis is one of the best things you can do to boost your physical and mental health in a lot of ways. Having a healthy diet is just as important if not more so. There's even evidence to suggest that cutting out animal products can allow you to live longer than people who eat meat and drink cow's milk.
While it's possible to retire and remain in your own home, the onset of old age can make that not only difficult but dangerous. While everyone has fond memories in their original homes, you'll be glad to know that there are wonderful retirement homes in Canada where you can make more amazing memories and strong friendships.
If you or your loved one are hesitant about transitioning to a retirement home, then it's worth looking into all the wonderful benefits that can come from it, including fun activities, engaging clubs, meditative scenery, and so much more.
Of course, it's also possible to stay at your original home for a longer time if measures are taken to keep the place safe and accessible. Stairs can be a major obstacle to accessibility, so it can be helpful to install a lift.
You may even need to hire a medical professional or caretaker who visits on a regular basis, for instance. They'll be able to provide you with health checkups and whatever else you need. Grocery shopping on your behalf is one of the many perks you could benefit from.
Hiring a caregiver should include as much research and discernment as picking out a retirement home. You should always double-check their background, interview the best candidates, and much more. It can also help to ask a potential caregiver to provide you with recent references who can let you know all about their experiences.
Best Places to Retire in Canada
If you're on the fence about where you can settle down in Canada for your retirement, it's worth taking a deeper look into some of the most beautiful and relaxing places in the country.
It's no secret that many people fall in love with Halifax, Nova Scotia. Not only does it have the optimum temperature, but it feels like a life-long vacation just being there. If you love nature, then you'll find yourself visiting the parks and beaches often.
For people who love sports, Toronto, Ontario is the place to be. This is because all the greatest Canadian sports teams come to this city to compete. That way, you'll be able to have a front-row seat and enjoy the action like never before.
Some people love the idea of retiring abroad but that can come with all kinds of headaches and hurdles. Instead of jumping through hoops to get to Poland, for instance, you can get the flavour of foreign travel by retiring in one of the oldest cities in all of North America. Quebec City, Quebec boasts beautiful buildings and a general atmosphere that evoke the most romantic and cultured parts of Europe.
If you still have your heart set on a foreign country, such as Mexico or Ireland, then it's a good idea to start doing research now.
Retirement Insurance Plan
One of the great things about Canada is that every citizen has healthcare coverage from the time they're born and until the day they pass on. Unlike the healthcare situation in the United States, this means that you'll still have coverage even if you're not working with your employer anymore.
There may be some healthcare differences in your coverage depending on where you're located, for instance. For example, people who live in Ontario will have to pay for their prescription eyeglasses out of their pockets, although they still have coverage for regular eye exams.
Another hole in most plans involves hearing aids and other assistive devices. This is important to know because hearing can often degrade with age. One way you can protect the health of your ear is by avoiding loud locations like concerts and bars, as well as listening to music through earbuds at lower levels.
If you plan on travelling abroad, you should get traveller's health insurance because the average Canadian coverage won't help if you need emergency medical services in another country. The good thing about most travellers' health insurance is that you can purchase them for the duration of your travels rather than an ongoing plan that charges you even when you don't need it.
It's always a good idea to do deeper research and see how your plan may or may not be affected based on your location and other factors.
Dental Insurance Plans After Retirement
The bad news is that dental insurance is something you'll need to make sure you have covered. It's often the case that your regular coverage will only take care of emergency dental problems within a hospital setting, for instance. However, there are many options available to you.
You might be wondering if getting dental insurance at an older age is even necessary. It's worth knowing that senior citizens who are 65 or older are more likely to have fewer and fewer teeth. In order to live a healthy and comfortable life, dentures may be needed.
With a high potential for such an expensive dental procedure, you should take the time to consider investing in dental coverage. This is especially true when dentures are one possibility among many other dental issues that could occur.
Are You Ready for A Relaxing Retirement?
Now that you've learned all about what you need to know when it comes to retirement, you can have peace of mind about the future. Once you have a set plan in place, then all you need to do is stick to it and meet your goals one by one. Be sure to let your friends and family members know about the essential info that can help them too.
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