Did you know that one in five retirees lives with debt, with many still making mortgage payments?
Like many Canadians, you’re probably worried about whether you’ll have enough money to retire. If so, there are a number of things you can do to better prepare yourself financially including calculating how much money you’ll need and adjusting your spending and saving habits. Here are some retirement planning tips to keep in mind that will help ensure you’re able to retire within the timeline you deserve. 1. Adjust your budget After you retire, your expenses will change. You may spend more in some areas and less in others, depending on the lifestyle you adopt and your needs. Do you plan to travel more? Will you need private health insurance? It’s important to sit down and look at your budget now and think about how you envision your retirement. This way you’ll be estimating based on your future needs, not your current ones. 2. Account for inflation When factoring how much money you’ll need to retire, it’s important to consider inflation. Over time, things become more expensive and the purchasing power of the dollar goes down. This means you need to estimate how much prices will inflate over the course of your retirement, and how much extra you will need to save to account for it. The Consumer Price Index, or CPI is used to measure inflation. Have a look at past and projected rates of inflation and plan accordingly. 3. Reduce your debts Did you know that one in five retirees lives with debt, with many still making mortgage payments? It’s a good idea to eliminate or reduce your debt as much as possible before you retire, so that you’re not paying debts when you’re living on a reduced income. If you have a mortgage, talk to your mortgage provider about ways you could pay it off faster. Additionally, it’s a good idea to seek the expertise of a debt management professional that can guide you in paying off outstanding debts. 4. Spend carefully Debt reduction may require reducing your spending. It’s important to look at your current budget and prioritize. Use budgeting tools to keep track of your spending and consider where you could cut; it might be a monthly membership you don’t use, or a daily coffee habit you could indulge in for less at home.
Contact Us for Debt Management Services in Ottawa and Across Eastern Ontario
D. & A. MacLeod Company Ltd has provided personal debt services and other financial services in Eastern Ontario for over 65 years. If debt is standing in the way of your retirement plans, consult our professionals today. We’ll look at your unique situation and find the best solutions to help you to retire debt-free. Contact us today to book a consultation.