If you are thinking or planning to retire, here are 7 strategies towards speeding up towards financial independence!
1) Consider a part time job!
If you don’t have enough money to retire, then you’ll need to cut back on your planned retirement spending, or find a way to save more. Many people are choosing to work longer. If you don't want to work longer, you will have to find a way to save more!
2) Protect your savings!
Plain old GICs are among the best low-risk investments, but you have to shop around for the best rates. Bonds are another option worth looking into but you may want to speak with a financial advisor to ensure you are selecting the right type of GIC or Bond!
3) Boost your income with Dividends!
You’ll need to keep a significant part of your portfolio in equities, and focusing on dividend-paying stocks may provide the right balance of risk and reward.
4) Downsize and cash in your home!
Real estate in Canada has had an enormous boom in recent years, and that’s allowed many long-time homeowners to build wealth! If you own an expensive home, you could add to your cash savings by downsizing or relocating.
5) Think differently about debt!
Carrying debt into retirement was once considered dangerous and irresponsible. But today’s low interest rates have changed the game—as long as you borrow smart.
6) Wait before you buy an Anuity!
Annuities suit many middle-class seniors but aren’t necesarily for everyone. Annuity payout rates are affected by interest rates, and current payouts are dismally low. Many experts say the current sweet spot for annuities these days is about age 70!
7) Reduce your Tax Bill!
Tax-Free Savings Account (TFSA) has added another option. If you’re saving for retirement with limited funds, whether you sock money away in your RRSP or TFSA depends on your tax bracket now compared with when you withdraw the funds.
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Courtesey of Moneysense.ca