Are you depriving yourself today to save for the future? You’re not alone. A recent Investors Group survey found that many Canadians are anxious about money in retirement. The reality is that Canadians are living longer than ever before. With some people living 30 years or more in retirement, this phase of life could last almost as long as a working career. And not only is retirement long, it can also be expensive. Meanwhile, Canadians are told to not rely solely on government benefits during retirement like the Canada Pension Plan (CPP) and Old Age Security (OAS).
Almost two-thirds (64 per cent) of retirees are worried about striking a balance between enjoying retirement and making their money last. In fact, six in 10 retirees are worried about whether they can stretch their retirement money over their remaining years.
How people are spending their retirement
Delaying gratification now may also have a negative impact on how you view spending in the future. What if you’re so used to living frugally, you continue to do so in your golden years? The survey found that 37 per cent of retirees were unable to do everything they wanted in retirement, in fear of overspending.
On the bright side, 80 per cent of recent retirees say their retirement is living up to expectations. 90 per cent say they’re spending more time with family and friends, while 84 percent finally have the time to spend on the hobbies they enjoy.
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How you can enjoy today and how much money do you need to retire?
Whether you’re 10 or 30 years away from retirement, it’s a good exercise to imagine how you’d like to spend your golden years. Ask yourself what’s important to you and the lifestyle you’d like to live. Do some research or consult with an advisor to determine how much you’ll need to live comfortably in retirement and how much you need to save per month to achieve that goal.
A lot of people think they have to sacrifice their current lifestyle to save for retirement. In many cases, that’s simply not true. Thanks to the power of compounding interest, the sooner you start saving, the faster your money will grow, whether it be in an RRSP or another type of savings account. By making retirement savings a priority and putting yourself first, you can still enjoy a comfortable lifestyle in the here and the now.