Guess Who's Planning for Retirement

This time of year tends to be the really stressful time of year when it comes to finance.

Are you contributing enough to your Registered Retirement Savings Plan (RRSP)? are you paying off that holiday debt and are you set to do your taxes? And finally, do you have enough money saved to retire in a few years?

It turns out that only 16 per cent of Canadians have some sort of idea about their retirement and 38 per cent of Canadians have some sort of retirement plan.

Yikes.

One of the interesting things is who's actually doing the saving. It's not who you think.

Liked this article? Don't miss another one. Follow us on Twitter or Facebook.It's not the boomers who are contributing the most. According to TD Canada, it's Canadians in their 30s who are maxing out their RRSP contributions with an eye to retirement. Twenty-one per cent of 30-somethings contribute their maximum to RRSPs versus 12 per cent of those in their 40s and 14 per cent of those in their 50s.

If you decide RRSPs are right for you, then it becomes a question of how you can contribute to them in a way that makes the most sense. Before you do that, there are a few things to consider:

Imagine the Future

Your future, that is. How do you want to spend it? Do you see yourself travelling off to exotic destinations or happy to stay at home? Knowing what you want to do sets the tone for your savings.

Talk to an Expert

A financial expert can help you find the money to contribute to an RRSP. They'll take you through your earnings, your debt and help you budget so you can access any extra cash.

Adding a Litte More

Since RRSPs operate on compound interest, the more and earlier you contribute, the better chance of having more when you retire, basically. The chart below shows the different depending on weekly contributions and age.



The rate of return shown is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of mutual funds or returns on investment in the mutual funds. For illustrative purposes only. Based on retirement age of 65. Chart courtesy of TD Bank.

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