How to Save for Your Retirement
The time to begin saving for retirement is the day you get your first full-time job. Not the job that pays your way through school but the one you get when school is done and you have entered the workforce, a place you will spend the next 30-40 years.
Over that 30-40 year period you may have a number of different jobs, especially if you do not have a profession, teacher, lawyer, doctor, engineer, plumber, for example. If you work at a clerical function and do not invest in any training that allows you to move into a higher earning bracket, you will need every day of those years to save, if you want a comfortable retirement.
The main problem here is the wages you are earning probably leave little for saving or purchasing RRSPs or developing any significant saving plan.
So what you need to do is develop a budget that enables you to pay the rent, put groceries on the table and save for the future.
Of course it is not that simple, costs keep rising but your paycheque does not, there will be many items that you may have to do without, such as a car, travel and a large wardrobe.
The picture I have painted is not a pretty one and many people are trapped in a reality that offers very little hope for a comfortable retirement. What can one do?
If you are just starting out, the first thing to do is get the best training education you can and then use that to get the best job. This has become very difficult. When you get a job, you need to create a budget that reflects your financial reality and allows planning for the day when you are no longer in the work force also known as retired.
Each pay day set aside five per cent for the day when you retire. If you are 25 and start this savings now, you will have 40 years or so to save. This of course depends upon you remaining employed. The older you get the more difficult it is to set aside enough funds to see you through the retirement years.
Avoid credit cards, if you cannot pay cash do not buy it, this is easier said than done, especially if you decide to buy a house, and are able to arrange the financing. Housing takes a big chunk out of our income and the alternatives are few.
The early years are when you set the patterns which will guide your through the rest of your live, when you are making those early decisions remember you could live another 50 years, what are you going to you live on?
- Save Money: Pay Yourself First
Saving money can be simple if you have a plan and if you use that plan. Before you create the plan you will need an accurate budget which tells you what your income is and what expenses you have. The...