How to achieve success at any age

Do you ever wonder what you should be doing in each decade of your life?

Let's break it down below...

1. Goals to set for your 20s

   • If you are making under $45k open a TFSA (Tax-Free Savings Account) if you earning over that threshold, consider opening an RRSP to start benefiting from the tax savings on your income tax return. Start saving as early as possible to build the habit of saving - even $25/month is a start! The earlier you start, the longer your investments have to grow.

   • Buy a home as soon as you can afford one, it doesn't have to be your forever home - you just need to get your foot into the housing market! You can live in it for 5 years and then upgrade, or utilize it as a rental property. One tip would be to ensure you buy something that allows rentals in the future so you know you have that possibility down the road.

   • Choose monthly expenses like your cell phone bill, subscriptions, etc. to be paid by your credit card. Ensure you are paying these expenses off each month on time and you will be building up a great credit score - which in turn will help with qualifying for a home.

     
     

2. Goals to set for your 30s

   • Aim to have 1x your salary saved by age 30 and 2x your salary saved by 35.

   • If you started saving $5,000 per year at age 30, and earn a rate of return of 7% you could have over $1 Million saved by age 70.

   • Utilize your tax refunds to pay for larger annual expenses (house insurance, property taxes, car insurance, etc.) you will eliminate a monthly expense and sometimes save a bit of money by choosing to pay annually. You can also use it to pay down debts if you have any.

   • If you can afford to buy a bigger home by this point, try to keep your first home and rent it out to have someone else pay for your first mortgage! This will allow you to build up more funds for your retirement too.

   • Start RESPs for your children - if you want to receive the maximum annual government grant you must contribute $2,500 per child per year. I always recommend to contribute what fits in with your budget, some grants are better than no grants!

   • Purchase life insurance while you're young and healthy -- making it far more inexpensive.

   • Build up your emergency savings for 3-6 months of expenses

   • Sign up for a Group RRSP if your employer offers one and try and contribute the maximum of what your employer will match.

   
   

3. Goals to set for your 40s

   • Consider opening a Spousal RRSP for the lower income earning spouse. You can build up their retirement savings, while still utilizing your RRSP room and receiving the income tax deduction to your personal tax return.

   • Try and build up your TFSAs so that you have a tax-free income stream in retirement that is flexible and can help cover big expenses in retirement that you wouldn't want to pull from registered monies.

   • Continue to use your tax refunds as strategically as possible.

   • Extend your emergency savings to cover longer than 6 months of expenses.

     
     

4. Goals to set for your 50s

   • Start imagining what you want your retirement to look like, how much income you want to receive for the lifestyle you want, where you want to live, etc.

   • Keep maxing out your RRSP contributions and topping up your TFSAs

     
     

5. Goals to set for your 60s

   • Try and work as long as you can if you are still enjoying your profession. You could even negotiate semi-retiring and doing contract work on the side to continue receiving an income, but without touching investments.

   • Determine if it makes more sense to take CPP at 60, or hold off. Consult your Financial Planner if you need help deciding.

   • Cut unnecessary expenses out of your life, consider getting rid of your extra vehicle, and stop paying for things that you can't afford in retirement. It is important to start adjusting to your new retirement income and understanding that once you retire you can't earn that money back.

   • Consider when you want to downsize and move to your retirement home.

   • If you are still making a substantial income at 65, consider postponing your OAS so you don't get clawed back.

   
   

   We hope this guide helps get you on the right track!