Questioning the ideal time to start planning for retirement is common. Is it at 30, 40, or 50 years old? Or is it already too late after a certain age? The answer isn't set in stone, but one thing is clear: it's better to start early.
Time is a valuable ally in managing your retirement, asserts Sussy Galvez, a financial planning expert. The earlier a young adult thinks about retirement, the better. The first steps in professional life are the ideal time to explore available options like pension funds, RRSPs, and understand deductions on pay slips, such as contributions to the QPP.
Starting young offers undeniable advantages. Although incomes at 25 are generally lower than at 40, and therefore the saving capacity is lower, the impact of long-term interest can turn small savings into a significant amount over 35 years.
Is it too late in your fifties?
If you are in your fifties, it's never too late to start, although the required effort will be more significant. An early start means less effort to reach your retirement goals. A delay may require major adjustments, like selling your house, to ensure the resources necessary for your lifestyle in retirement.
Sussy Galvez recommends consulting a financial planner early in life to establish realistic retirement scenarios. With 10 or 15 years until retirement, it's still possible to adjust to meet your goals.
Initiating Reflection Among Young People
To engage young people in this reflection, it's wise to encourage them to save for their short-term projects. Saving for an apartment, a car, or a trip can be an excellent start. Using tools like the TFSA or RRSP in the context of the Home Buyers' Plan are smart strategies.
Finally, do not underestimate the importance of retirement preparation sessions, such as those offered by Cégep Marie-Victorin.
Using the financial markets authority's calculator can also be a valuable tool to visualize the impact of time on your investments.