Retirement Planning: Be informed. Be smart. Be ready.
What’s the difference between a financial adviser and a financial planner?
There’s no shortage of financial professionals to help you manage your money. However, two of the most common designations are that of financial adviser and financial planner.
Many people believe that the terms are interchangeable, but this is inaccurate. In reality, all financial planners are financial advisers, but not all financial advisers are financial planners.
Financial advisers
Financial adviser is an umbrella term for professionals who help their clients manage their money. They may be bank employees that help their clients understand the range of products they offer of professionals who work independently. They often specialize in handling investment portfolios.
Financial planners
A financial planner is an adviser who specializes in helping individuals and companies create programs to meet their long-term financial goals. They assess the client’s whole financial situation in addition to any investments they currently hold. The strategies they create may include estate and retirement planning, education funding, insurance and risk management and taxation.
When hiring a financial professional of any kind, make sure they have the proper education and expertise. Almost anyone can take on the title of financial adviser. This means that while the person you work with may have extensive knowledge and training, they may also simply be a salesperson for the bank.
What type of saver are you?
Will you be ready to retire when the time comes? The amount of money you save and for how long will determine your level of comfort in your golden years. So what type of saver are you?
The steady saver
You have a firm grip on your finances and know you’ll squirrel away enough to retire on. You regularly contribute to your retirement fund and put a predetermined portion of your pay into an emergency savings fund.
The part-time saver
You’ve thought about your retirement plan and tend to put away money when you have some leftover at the end of the month. This is a great way to start, but you should put cash into your retirement fund more regularly. Getting the bank to automatically transfer funds on a specific day is a good way to move towards having better saving habits.
The future saver
You know you should put away money for your retirement, but you haven’t started yet. If you don’t know how to begin, seek advice from a financial consultant. They can help you make a retirement plan and show you ways to maximize your savings.
The non-saver
You don’t save and don’t plan to start. This is a risky way to conduct your financial affairs as governments and businesses alike are reducing pensions now more than ever.
Many people across the country don’t know how much money they’ll need to retire. To find out, reach out to a financial adviser in your area.
Tips for saving for retirement
Are you struggling to build up your retirement fund? If so, it may be a good idea to pay attention to your spending habits. In fact, you may be surprised to discover where your money is going. Here are some ways to save for retirement that won’t feel like a sacrifice.
Rethink small indulgences. Spending three dollars a day on picking up a coffee on your way to work may seem like an affordable treat. However, over a year those coffees cost almost $800; money that could have gone into your retirement fund.
Establish a budget and stick to it. Knowing how much money you have coming in and out over the course of a month will help you live within your means and allow you to put more aside for retirement. Be sure to make monthly contributions to your retirement fund.
Put windfalls directly in your retirement fund. Are you expecting a sizeable tax refund from the government? Or perhaps you’re receiving a bonus from work, or maybe an inheritance? Put any unexpected money directly into your retirement fund. Since it wasn’t part of your budget, you won’t even miss it.
Lower your monthly expenses. This can be as simple as calling your insurance company to renegotiate your rates or removing unnecessary options from your cellphone plan. Instead of adding these savings to your monthly budget, increase the amount you allocate to your retirement fund.
Making small changes may not seem like a big deal, but they can add up over time and make a significant impact when you retire.
Preparing for retirement: 5 reasons to get help from a financial pro
Your savings and investments are the key to a comfortable retirement. However, many people find navigating the world of finance confusing. Luckily, financial professionals make managing your money easy. Here are five reasons working with a financial adviser or planner is the smart way to prepare for retirement.
1. They know the ins and outs of the industry and can offer up-to-date advice.
2. They’ll take your whole financial situation into account to create a money management plan tailored to your unique circumstances.
3. They can tell you which of your expenses will increase when you retire and which are likely to decrease.
4. They understand the different investment options available and can guide you towards those that best suit your needs.
5. They’ll advise you on what actions you need to take to achieve your financial goals.
With the right financial professional, you can rest easy knowing that your needs are met. And if you have any questions, they’re just a phone call away.
Retire a millionaire: how to have more for retirement by saving in your 20s
The sooner you start saving money, the more you’ll have when you’re ready to retire. Here’s how to maximize your retirement savings from a young age.
Start saving regularly ASAP
If you begin placing money into a retirement fund while you’re still at your first job, you’ll pay less on a monthly basis over the course of your working life. This is a great way to ensure that you have the money you need to retire.
Pay down debt aggressively
Being in debt holds you back from achieving your financial goals. If you have consumer debt (like a car loan or a balance owed on your credit card) make a formal plan to pay it off as quickly as possible. Once you’ve paid all your debts in full, ensure you start spending less than you make and put a percentage of your salary into your retirement fund each month.
Take advantage of employer benefits
If your employer offers RRSP matching, be sure to contribute as much as necessary to benefit fully. If this isn’t something offered through your workplace, open your own RRSP and set up a pre-authorized transfer to occur every payday.
Compound interest is what makes saving in your 20s and 30s so important. The interest that you’ll accrue over 30 or 40 years is much greater than what you’d earn if you start putting money away in your 40s. Saving from a young age makes it feasible that you’ll retire a millionaire.