Even though I’ve been employed full-time for about eight years, I’ve been on track for retirement from the time I finished university. From the time I received my first pay cheque, my mother encouraged me to start a registered retirement savings plan (RRSP) with a local credit union. I followed her advice, and to this day, I contribute to the plan every month.
My first full-time job did not have a pension plan, so the RRSP was the only retirement plan that I had. When I joined my second job, they did not have a pension plan. But about two years ago, they implemented one. I can’t remember the exact contribution percentages, but I know that the company contributes a minimum to the plan which you have to match. You can also make additional voluntary contributions.
There is also a government scheme called National Insurance (NIS), which is a Social Security programme. NIS pays a pension to eligible contributors when they reach the retirement age. As long as you’re working, you should be paying NIS for each pay period. Both the employer and employee pay a portion which is determined by the government. I am not willing to put all of my hopes on this one pension, so I will continue to save otherwise for my retirement.
For some reason, it feels as though I am not contributing enough to my retirement. By law, I still have at least thirty-five years before I retire, which technically is a long time. But I think that in my “youth”, I should be pushing to build my retirement fund. I don’t have many commitments, so now is the time to save as much as I can.
I found a free pension calculator on Generali Worldwide which was helpful in estimating what my retirement fund would be like in 35 years. The only drawback to this was that it only took contributions from my current job into consideration. Based on that calculator, I would be retiring with about $49,000. It’s not much considering how much I would need to survive on per month. Based on calculations in a previous post, that would be gone in no time.
What steps are you taking to get on track for retirement and what tools do you use? Can you suggest any helpful pension calculators?