If you’re set to graduate from high school, college, or university, you have a million things on your mind, such as how to land that dream job or what adventure you want to tackle next. One thing that’s likely not on your mind is retirement — but it ought to be.
While it’s never too late to start saving for your retirement, the earlier you get started, the better. Let’s consider someone who’s 10 years away from their desired retirement date. If they were to invest $554.90 monthly in a mutual fund with an average rate of return of eight per cent, they’d be able to build a nest egg of $100,000. By starting earlier, say 20 years, they’d only need to put away $175.66 a month to get that $100,000 nest egg. If they began 30 years ahead, that monthly contribution would just need to be $66.66, and by starting 40 years ahead, they’d only have to put away $28.50 a month to save $100,000.
The point is that the sooner you begin making regular contributions to an RRSP, the sooner you can start taking advantage of the power of compound interest to maximize your savings. Best of all, if you start right away, you’ll probably never even miss the monthly contributions.
If you have questions about how to set up an RRSP, Casera can help. Contact your neighbourhood branch today to learn more.