What I wish I'd known
Notes to my former self
Saving for retirement isn’t always easy and it doesn’t happen overnight. We chatted with some Xennials (35-39 years) to find out what they wish they had done differently to save for retirement when they were younger. Here’s the inside scoop:
“I wish I’d joined my pension plan when I had the chance.”
When I was 23 I became permanent at my job, after three years of being a contract worker. While I was a contract worker, I had the option to join my workplace’s pension plan, but I didn’t think contributing to my pension plan was important at the time. I just wanted to pay off my student debt. A few years later, I realized that this decision would affect how early I could retire and decided to “buy back” the pension credit that I overlooked when I was on contract. Now, five years later I am still paying for those overlooked pension credits and it has ended up costing me a lot more money than it would have if I had joined the pension plan from the beginning. If I could change it, I would go back and join my pension plan as soon as I could.
“I wish I’d saved for retirement while I was paying down my student debt.”
When I was 25 I landed my first full-time job, and I was excited that I could start paying off my student debt. Each and every paycheque I put the majority of it towards that. I wish I hadn’t done that exactly. I should have saved more for my retirement by opening up an RRSP. I was so fixated on getting out of student debt that I didn’t think about my future. If I could go back, I would only pay the required monthly amount off my student debt and put at least 10 per cent of my paycheque into an RRSP. That way, I would have been paying off my student debt and also investing in my future self.
“I wish I’d paid myself first.”
When I was 24 I worked hard but saved very little. My thought was that whatever I had left over by the end of the month, I would save. But when the month came to an end, I didn’t have much left. Years later I heard a colleague say “save first, spend later”. What she meant was to put away savings first by setting up automatic deductions from my pay and putting it straight into a savings account. That way I would have put my future self first. I thought it was genius and began with five per cent of my bi-weekly pay. As I kept working I realized that I could save more, so I increased the automatic deduction to 10 per cent. Now I have a lot more saved and I don’t even have to think about it, plus I feel a lot happier and less stressed. I wish I’d have set up automatic transfers from my paycheque into my RRSP sooner, and not waited till the end of the month to save what was left.
“I wish I’d have met with a financial planner sooner.”
When I was in my twenties, I thought I knew quite a bit about investments but I didn’t know where to start. I was nervous but I knew that if I did invest, it would be for my retirement. I chatted with family and only got more confused, and my friends were not as concerned about retirement saving as I was. I ended up asking my colleagues at work and one of them said her dad was a financial planner who specialized in pensions and that he could probably help me out. I met with her dad, and it was exactly what I needed. I talked to him about my goals and found that despite what I knew, there was a lot more I didn’t know. Together we developed a plan for me which included setting up an RRSP. I wish I’d met with him sooner so that I could have more saved but I didn’t realize what a financial planner did or how they could help me.
“I wish I hadn’t left any money on the table.”
When I was in my late twenties, I landed my first full-time job, or as my mom called it “a real job.” There was a workplace retirement savings plan that was offered and it was a matching program. So that meant if I contributed towards my retirement savings plan, my company would contribute the same up to a maximum of eight per cent of my salary. I decided to join but contributed the bare minimum. My thought was despite me saving only two per cent of my salary, at least I had a retirement savings, unlike many of my friends who didn’t have anything. In retrospect, I wish I had saved more. My company was willing to match up to eight per cent, and I wish I had taken advantage of that. It seems stupid I didn’t, especially since it would have been “free” money from my company.