It’s tough to be a young person in 2016. Jobs are scarce, student loan debt is a big problem, and the price of houses in many Canadian markets just seems out of reach. And then, if that wasn’t enough, pundits say you’ve also got to fit saving for retirement in there.
It’s hard to get ahead when you have to focus on all of those things at once. So many people react in a very predictable way--by throwing up their hands and not saving for anything.
Even though it’s important to get started early, there’s a case for not making retirement savings a priority until the age of 40. In fact, as long as someone takes advantage of any RRSP matches at work, it’s likely okay to not worry about retirement at all.
That doesn’t mean folks should ignore saving altogether. They should be encouraged to tackle any debt they have, save for a down payment, and make sure they’re on sound financial footing when they have children. These are all worthy financial goals that should be tackled as quickly as possible.
Once these goals are taken care of and increases in income start coming, these people can start becoming aggressive retirement investors, filling up unused contribution room from previous years. This will create tax breaks that can be further used to catch up.
If you can fit in saving for retirement as a 25-year old, great. If not, don’t sweat it. Focus on getting the rest of your finances together. It’s okay to put off retirement for a little while.
