COVID-19 has affected Canadians’ retirement plans in significant ways. Some changes are good news and some not so much. During the pandemic, a part of staying safe may include staying financially safe. Evaluating your plan to save for retirement and determining how much you can contribute to your retirement savings can help your future.
As a reminder, this year’s deadline to contribute to your RRSP is fast approaching. The last day to contribute for the 2021 tax year is Tuesday March 1st 2022.
An RRSP provides short and long-term tax advantages that can help fund the retirement you want.
• Pay less tax now – Contributing to an RRSP lowers your taxable income so you pay less income tax while saving for your retirement
• Keep more of your investments – You don’t pay tax on the growth of your investments in your RRSP until you withdraw it so you can keep more of your money
They can also be used to finance the purchase of your first home or to go back to school. As life spans continue to increase and the future of government pension plans remains uncertain, it’s never too early or too late to top up your RRSP savings plan.
If you were able to work from home, chances are you saved more than normal; all that money you didn’t spend on commuting, going out, dinners and not to mention what you saved by not being able to go on vacation. Recent research suggests nearly half of Canadians have saved more than usual during the pandemic. The more you have save, whether that’s in your RRSP or TFSA, the sooner you can think about retiring.
If you’re unsure if you’re on track to meet your goals or how long your nest egg will last, I can help you define your goals, create a comprehensive plan tailored to you and protect your retirement income. Together we can make sure your plan keeps pace with your needs.
Pleases let me know if you have any questions.