The feeling that you're not putting enough money aside for when you retire, or that you don’t have enough saved to cover unexpected expenses, can be uncomfortable. But there is good news - learning about healthy financial habits and practising your financial skills (like you’re doing now!) can increase your financial confidence and have a positive effect on your financial wellbeing.
It is hard to estimate how much money you might need for your retirement. A good way to begin planning for life after work is to assume you'll need between half and two-thirds of your salary, after tax is deducted, to maintain your current lifestyle.
And since government sponsored pension plans are unlikely to cover what you need in your retirement, the earlier you start saving, the larger your retirement nest-egg will be. That’s because the longer you save, the more the interest you earn compounds. This power of compounding happens when you earn interest not only on your savings, but also on the accumulated interest you’ve already earned.
HSBC Canada has published a useful free online calculator to estimate how much you will need to save for your financial future. You can access it here.
Learn more helpful retirement tips and access tools and resources to help you get started today.
Issued by HSBC Bank Canada.
This article is for information purposes only and is not intended to provide specific financial, legal, tax, investment, or other advice, and should not be relied upon in that regard. You should not act or rely on the information without seeking the advice of a professional. Please consult your tax advisor to find out which strategies best suit your tax situation.