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Saving for Retirement When You're Behind on Contributions

June 5, 2019
3 mins
Modern seniors working at home

It's easy to look back and say, "I should have started saving 10 years ago." But the reality is that time passes, and retirement seems closer and closer. There's no changing the past, but there are ways that you can play catch-up with your retirement plan. You have the ability to make sound financial choices now, and improve your outlook for your better years -- even if they seem to be just around the corner.

Reduce Debt Quickly

A huge number of Canada's retirees are entering those years still saddled with debt. According to a survey published by the CBC last year, 20 percent still have a mortgage and 66 percent have credit card debt. On average, retired persons had $11,204 in debt. While that may sound like a manageable figure, it's a bit more unsettling when you remember retirees no longer have the income they once did.

So, in order to get back on track for retirement, try to tackle that debt while you still have cash coming in. Then your retirement income can go toward taking care of you.

Max Out Your RRSPs and TFSAs

There are substantial tax savings from RRSP and TFSA contributions. Many Canadians, however, have unused room in those programs. Check your previous year's tax statements to see how much you can put away. Even if you feel like your budget is thin, every little bit helps -- and you'll be happy for it once you reach retirement age.

Stick to the Essentials

The idea of cutting back always seems hard. Life is expensive, and living well often means spending. But if you take a look at your budget, you may be able to find unnecessary expenditures you can eliminate. Review all of your bills to find cheaper entertainment packages. Shop around for more affordable car insurance. Instead of wasting those savings by consuming more, put the extra cash away. Talk to your bank about setting up a low-risk investment inside of an RRSP or TFSA. The money will grow over time.

Increase Your Workplace Pension

Your pension contributions may have been locked in some time ago. Review your statements and ask your HR representative if you can deduct a bit more from each paycheque into your plan. In particular if there's a matching program, you can build up a larger nest egg. If the additional contributions are modest enough, you may not even notice the difference in the spending power of your take home pay.

Prioritize Your Financial Wellness

At some point, everyone needs financial assistance. You may want to do all you can to support your adult children or loved ones. But your financial needs are also essential. If you are sensing you may experience financial restraint in retirement, put your retirement accounts first. It may require some hard personal conversations, but can save everyone unnecessary distress later on.

Simple Changes Can Make a Difference

Doing the math when it comes to retirement can induce a lot of anxiety. But you can reduce that anxiety with some small shifts in your financial outlook. Once you prioritize living well in your later years, you may find you have options to build up that nest egg. can help, with the latest rates on insurance and mortgages.


The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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