Planning for Retirement in Early Career

Early on in our career, planning for retirement is usually one of the last things on our minds. We’ve got immediate expenses and financial pressures and those tend to take precedence over planning for retirement. The reality is - ignoring retirement planning now can cost you big later.  

We’ve put together some of the key issues you should be thinking about now and tips on where to go to get started.

Why should you care now? Starting early will cost you less

Time is on your side right now, but if you leave your retirement planning until later on, you could be leaving money on the table – money you’ll never get back. Whether it’s a buyback opportunity for your PSPP pension or outside investments – the earlier you act, the less it will cost you.

If you have service you can purchase in the PSPP, apply early for the lowest cost. If you wait until your 24-month costing window closes, the cost could go up significantly (i.e. two to four times the amount).Remember you’ve got payment options to help with affordability like spreading the cost out through payroll deductions and paying through RRSP transfers.

When it comes to your outside investments – retirement planning can help you understand how much income you’ll need outside your PSPP and government pensions (CPP + OAS). As financial advisor Suze Orman has said repeatedly, investing in your early 20s and 30s lets you maximize the power of compound interest. Waiting until later in your 30s and 40s can cost you hundreds of thousands of dollars that you may not be able to get back.

How we can help you get started

1. Do you have any service you can buyback to increase your pension?
   1. Have you taken an unpaid leave of absence you didn’t contribute for?
   2. Have you ever had a period of optional membership (e.g. part time or contract employment) where you didn’t contribute?
   3. Were you a member of another registered pension plan before you joined the PSPP?
   If you answered "yes" to any of the above questions – contact us to discuss your options and get a buyback quote.
2. Create your retirement plan – Our online My Retirement Planner gives you a comprehensive view of your retirement picture and can show you whether you’re on track to meet your retirement goals. It can also help you understand your family’s expected income and expenses in retirement.
   Login to your e-services account(opens in a new tab) to start exploring our helpful tools now.
3. Once you’ve gone through the My Retirement Planner and understand how much you might need to be saving outside of the PSPP, book a meeting with your financial planner to work on your investment strategy. 

Takeaways and advice

• The younger you are when you begin your retirement planning, the better situated you are to maximize your potential retirement income.
• Buying back credit helps you increase your PSPP pension.
• Having a PSPP pension is a great start but it doesn’t mean you don’t have to plan for retirement.
• Sign up for one of our early career workshops to learn about how your pension fits into your overall financial plan. To learn more and register for the next workshop, check out the Financial and Retirement Planning Workshops page.

If you have any questions as you’re starting to plan, our Client Service Advisors, who are all Certified Financial Planners, are here to help.

To book a one-on-one session, login to your e-services account(opens in a new tab) and select ‘Book My 1-on-1’.