It can be stressful to imagine what impact the next few decades might have on Canada’s economy and our pocketbooks and a new survey reveals that many young Canadians fear a cushy retirement is out of reach.
The big dreams are there: more than half of respondents (57 per cent) to a recent TD survey said they’d like to retire by the age of 60, but only a quarter (27 per cent) think that it is realistic.
Most corespondents (70 per cent) said they expect to work until they’re well into their 60s or 70s.
When they do retire, 60 per cent would like to travel extensively, and 27 per cent dream of buying a vacation home.
Know where your money is going
First of all, don’t panic, Edmonton-based personal finance expert Kelly Keehn said.
“Take an assessment of where you are, and where you want to go.”
To start, Keehn recommends her “30-day anti-budget”: keep track of every dollar spent for 30 days to be able to really assess where your money is going.
“I think we have to have fun,” Keehn said. “But we need to keep track of what we’re spending.”
READ MORE: Plan on retiring ever? You’re still not saving enough, poll says
While small day-to-day expenses can be trimmed, you also need to be sure to get the best deal possible on big purchases, such as a mortgage rate.
Keehn said people don’t need to self-impose extreme austerity measures, because just like a crash diet, it’s not sustainable long-term.
“I’m an advocate of choice and awareness, not just sacrifice. Not just cut, cut, cut.”
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Invest in financial advice
Trips, cars, new phones… life is expensive, and it can be hard to deprive yourself right now of the fun things to save for 40 years down the road. The survey showed that the under-35 set are least likely to save for retirement, because they’re more focused on immediate gratification.
Don’t be so hard on yourself, Keehn said. Just get on the right track.
Many young people are not yet making enough to be stashing money in RSPs, Keehn explained, adding they could be more beneficial down the road anyway, when in a higher income bracket and able to enjoy the tax benefits.
MORE: Chances are high you’ll retire early — but not by choice
“You really want to understand credit. You really want to understand debt. And if you’re feeling stressed, you’re not really sure which way your life should go.”
She suggests seeing a financial professional who can layout a money plan for the stage of life you’re in and where you want to be in 10 or 20 years down the road.
“Spend money on quality advice that can save you a lot of money in the long-term.”
Get creative to make more money
As Canada’s Boomers move into the golden years of retirement, it can be hard to imagine a similar financial state a few decades down the road, as wages continue to stagnate and precarious employment becomes more common.
More than three-quarters of survey respondents (78 per cent) said they don’t make enough money to stock away savings for retirement.
Keehn agrees it’s a tough job market. Her solution: get creative and make more money.
“Where can you bring in more money into your life?”
She said often too much emphasis is placed on cutting costs, instead of bringing in more funds.
For quick and easy money, she suggests looking for items in your home to sell. Have an online garage sale to make a few bucks, and offer to sell your friends’ items for them — for a cut.
READ MORE: 38 per cent of Canadians struggled to pay bills: poll
“Start a side business,” Keehn said. Look at your hobbies, could they make you money?
“Spend the time to make yourself out to be an expert on something that is your hobby, your passion, and turn that into a side business.”
For more tips and tricks for making smart money decisions, visit Keehn’s website.
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