Kick-start your retirement savings plan
For some people, starting a retirement savings plan is something they never quite get around to – we know it’s a smart thing to do, yet a lack of time, lack of enthusiasm or even downright dread make us put off doing it. But taking those first few steps towards saving for retirement doesn’t have to be painful. Here are a few easy things you can do to get started:
Put your money to work for you ASAP
No matter how much money you have to invest or how many years you have left until you retire, the sooner you start, the harder your money will work for you. Why? Because of 2 trusty workhorses known as compound interest and DRIPs (dividend re-investment plans). Compounding simply means that you are earning interest on top of the interest. With DRIPs, the dividends generated by your original investment are used to buy more shares (and generate more dividends). So the longer you hold your savings investments, the more you stand to gain.
Set up a pre-authorized cheque (PAC) withdrawal
A moderate, monthly PAC that is timed to coincide with your paycheque is a good way to grow your savings with minimal impact to your lifestyle. Because the amount is withdrawn from your account and then invested automatically, you’ll never forget to do it and chances are you won’t even miss it.
Make investing easy with mutual funds
Mutual funds simplify the investment process by placing the fund’s investment decision-making into the hands of professional fund managers.
- Fund managers have the expertise, experience and access to detailed research that is required to carefully and thoroughly evaluate the many different investments available before making a purchase commitment.
- Because mutual funds pool the investment dollars of a large number of individuals, the fund manager is able to develop a highly diversified portfolio. Risk can be diluted by investing in a wide range of different industries, different companies and different countries. Most individual investors don’t have the funds required to build a well-diversified portfolio on their own.
- The fund manager is also in charge of determining the asset allocation (also known as the asset mix) for a fund. Risk is further managed by investing in different classes of investments, which may include stocks, bonds and money market investments. Different asset mixes will appeal to different types of investors; yet getting the mix right takes an in-depth understanding of the markets, the economy and other complex factors.
Work with an advisor to develop a complete financial plan
Working with a professional financial advisor has many benefits. They will help you define your short and long-term financial goals (e.g. buying a house, saving for a big trip, planning your retirement, etc.), assess your current financial situation and help you to craft a solid financial plan that aligns with your goals.
Read more about working with an advisor.