Pierre Goulet
There is no compulsory age to start planning for your retirement. For young CAF members, retirement planning is not necessarily high on their list of priorities, while senior members often have little time to dedicate to it. However, the sooner you start planning, the better! Time is on your side. So what are you waiting for?
Simple 5-Step Method To Get You Started
1. Determine your sources of income
The Québec Pension Plan (RRQ)* starting at age 60 and older
Tip: Ask for your statement and register for clicSÉQUR*
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- The Old Age Security program (OAS) starting at age 65 and older
- The Canadian Armed Forces (CAF) defined benefit pension plan
- Non-registered investments
- TFSA investments
Tip: Register for My Account on the Canada Revenue Agency website (make sure your RRSP and TFSA contribution rooms are always up to date and that you have copies of your income tax returns).
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- RRSP investments
- Inheritance, estate, life insurance, or other.
2. Estimate at what age you will retire
The age you will stop working will have the most significant impact on your retirement strategy:
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- At age 55/before 60 you are not eligible for any public pension benefits (RRQ or OAS) and must rely on your personal savings.
- At age 60 you become eligible to receive RRQ benefits.
- At age 65 you can collect all retirement benefits available.
3. Determine your retirement goals
Tip: Take the state of your health, family limitations/obligations, and your professional situation into account
4. Calculate how much to save per year
Tip: The rule of thumb is 10 per cent of your net income – this is not a universal rule, but a starting point.
5. Get started
Tip: Make a budget, a savings plan, and a plan to finance yourprojects. Choose your financial advisor carefully.
Here are a few more tips to help you save more:
1. Apply for the RRQ and OAS at the right time (your pension will be lower or higher depending on your age when you apply).
2. Establish a good withdrawal strategy.
3. Create a diversified investment portfolio (not too conservative and not too risky).
4. Adapt your tax strategy to your situation (for retired couples, take advantage of income splitting with your partner; you can also split the RRQ).
5. Tips for travelling: if you head south for a few months every winter, get good insurance (a few nights in hospital in the United States can be costly; avoid having to pay out of your own pocket).
Take the time now to make a plan so you can enjoy a comfortable, peaceful retirement. Review your policy regularly, especially if your situation changes. * Québec residents only.
