While it is very important to understand which is the best retirement savings plan for an investor in Canada, on the other hand it is also very important to plan the retirement savings (of-course, calculations must be made with a calculator). Planning for retirement savings helps in maintaining a required income throughout the life span. You can also open a registered retirement savings plan (RRSP), which is a type of Canadian account for investment assets and holding savings. The registered retirement savings plan have various tax advantages in Canada compared to investing outside of tax-preferred accounts.
7 Best Retirement Savings Plan Canada
Following are some of the very important ways for an investor to plan his retirement savings –
1. All investors should pay attention on diversification of their funds from their hard earned money in Canada, while planning for their retirement savings. Like most investors with good income consider 80-20 option i.e. putting 80% of the investment in more risky options like stocks, etc., and the remaining 20% on fixed income and no-risk options. This helps in getting more returns and also helps to protect the investor’s financial portfolio.
2. Enough cash should always be maintained as an emergency fund to take care of some unforeseen circumstances and emergencies. Putting the entire amount in retirement schemes or any investment plans should not be done.
3. All the purchases that are not required should be completely eliminated or at least be reduced to a greater extent before retirement. This helps in building up cash fast and helps in maintaining the funds as well. The standard of living puts a lot of effect on the retirement savings.
4. As a part of the retirement savings the investor should consider the fixed and guaranteed income options first. These kinds of options guarantee some fixed monthly income throughout the life of the investor.
5. There are various schemes available in the market that focus on low risk options like fixed deposits, bonds, etc. These should be utilized broadly while planning for the retirement savings.
6. Now a very important part that generally is not taken care of is insurance. You should think for life insurance and medical insurance that any investor should take care of while planning their savings for retirement. There are good options available in the market that provides cashless medical facilities as well as life insurance to the investor that impacts the savings largely. The insurance coverage should be reviewed regularly.
7. Investors reaching their retirement age should keep a periodic check on their portfolio while they move on to change their business investment options and get into more conservative options as not keeping a check on the portfolio might put them off track and might affect their savings on a larger scale.
Retirement Savings Plan Canada Videos
Know what is a registered retirement savings plan (RRSP) and how it works
TFSA (Tax Free Savings Account) VS RRSP comparision
Retirement Planning and The Time Value of Money
These were the seven best retirement savings plan in Canada, the ways in which the savings for retirement are planned in Canada are of utmost importance in order to ensure a fixed income throughout.