Will young Canadians ever be able to retire?

NC) Today’s environment looks tough for younger Canadians. Persistent inflation, higher interest rates and reports of unemployment and underemployment continue to be common. Retirement may feel particularly unachievable for this cohort as workplace pensions become increasingly rare, even for those who are able to find work that is rewarding and fulfilling.

So, how will an entire generation save enough money to retire comfortably? Here is a roundup:

Workplace plans

If you have access to a company plan, how much income will it generate in retirement? A defined benefit plan offers a guaranteed income for the rest of the retiree’s life, depending on length of time you worked at the company. A definedcontribution pension puts more risk on the individual, with the employer matching individual contributions; funds are then invested in the market and the individual controls the level of risk.

Tax-sheltered savings

An important part of retirement income planning is individual savings. Common options include registered retirement savings plans, which defer taxes until after the funds are withdrawn, or tax-free savings accounts, in which after-tax dollars can be invested and grown tax-free.

Savvy investments

Another possible pillar of your retirement income may involve investing in non-registered methods, like on the stock market without a registered account or in real estate. These can sometimes come with big rewards, but also have risks. It’s up to the individual to decide whether they want to make investment decisions on their own or work with an advisor.

Government pension

At the core of your retirement plan is the Canada Pension Plan, which is managed by CPP Investments, a professional investment management organization that invests contributions not needed to pay current benefits. Contributions to the plan are deducted from your paycheque when you start working full-time.

Currently, the plan is expected to cover about one-quarter of retirement income for the average Canadian. Changes decided on in 2016 will provide younger Canadians with supplemental benefits when they retire.

Recent polling shows many Canadians are concerned about the sustainability of the plan, but it’s the part of planning that you have to worry about the least. A recent report by the federal government reveals that it will continue to be sustainable for 75 years, and beyond. In fact, it’s the bestperforming pension fund in the world during the past decade according to Global SWF.