Saving for different life stages.
Updated: Oct 9
Original article by:
Renee Sylvestre-Williams
FINANCIAL PIPELINE
July 3, 2024
📰 Read the ORIGINAL ARTICLE here.
I spoke with Financial Pipeline about how to plan your savings for each stage of adult life, from graduation to retirement. Here are the highlights and my contributions.
Key Takeaways
Every stage of adult life, from graduation to marriage, parenthood, the empty-nest years and retirement, brings its own costs and savings priorities.
New grads should keep up with loan payments, tackle high-interest credit card debt first and build a habit of saving a portion of each paycheque.
Couples should talk openly about wedding budgets, buying a home, combining finances and the true cost of parental leave and daycare.
Once others depend on your income, life insurance becomes an important part of the plan.
Pay down as much debt as you can before retiring on a fixed income, and make sure you have an up-to-date will.
My Perspective
For new grads, I recommend paying down high-interest credit card debt first. Federal student loans carry little or no interest, so it often makes more sense to put extra cash toward essentials like rent. And if your employer offers an RRSP matching program, join it as early as you can.
"Compound interest is a wonderful thing."
Many future parents assume they'll receive 55 per cent of their salary during parental leave, but benefits are capped, so the real amount is often much lower. It's okay to give yourself some grace and pause your savings goals during the early years of parenthood, when cash flow is tight. For education savings, contributing enough to maximize the RESP grants is usually sufficient.
"Use financial calculators to find out if you're on track, and don't wait."
Canadians nearing retirement are often overly cautious about how much they'll need, so the empty-nest years can be a time to enjoy life a little more. I also encourage parents to consider passing on part of an inheritance while their children are younger, when it can help with a home or a new business, rather than leaving it to children who are already retired themselves.
Originally published in Financial Pipeline by Renee Sylvestre-Williams on July 3, 2024. Use the link at the top of this post to read the full article.
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