In recent years, the responsibility for saving for our retirement has increasingly shifted to the individual. The good news is that by following a handful of simple rules, you can make that responsibility work in your favour.

Make it a habit

At first, it’s the act of saving that really counts, rather than the amount you put away. It’s important to be realistic and get into the habit of saving. Even if you only have small amounts to save, building your nest egg takes time. Save small amounts and let the magic of compounding go to work.

Have a plan

Be clear on your direction, purpose and incentives. When you have a clear idea as to why you are saving and what you want to use the money for it can be a great motivator. It can be as simple as the short-term being a rainy day fund, the medium term perhaps being saving for a car or a home and the longer term being about setting yourself up for when you’ve finished working.

Diversify

Diversification refers to putting your money in different places and/or assets, rather than saving it all in a single investment or investment account type. Take advantage of the tax-efficient accounts available to you such as TFSAs, RSPs and company pension plans. Mixing your investment plans for these accounts and your taxable accounts can both help reduce taxes and diversify/minimize risk.

Consider your individual situation

If you’re employed, find out what your employer will contribute towards your pension. Most will match your own contributions or pay in a certain percentage of the amount you do. If you are self-employed, consider the advantages of incorporation, unused RSP contribution room and dividend income.

Get professional advice

There are many reasons for getting professional financial advice, including the role we can play in helping you get into good habits and keep them going. Life can take over and even important things can lose our attention, so regular check-ins with your professional planner can ensure you stay on track. Your plan needs to be constantly evolving with you, your thoughts and desires. Your retirement plan should not a static document.

Retirement Navigator^™ Retirement Income Specialists have built thousands of plans and work with clients to update plans on an almost daily basis. We work together with portfolio managers to help them ensure your investment strategies align with your life plan.

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