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How to save for retirement while eliminating debt

Overview

Published: 02/16/2016

by Amanda Peja

 Canadians are carrying more debt than ever before and many find themselves faced with a tough choice: pay down the debt or save for retirement? According to personal finance experts, it's possible to have the best of both worlds and it doesn't have to be as hard as you think.

“Taking a proactive approach to your finances can allow you to both save for retirement and pay down your debt,” says Wade Stayzer, vice president of sales and service at Meridian. “By determining your financial goals and working with a trusted financial advisor to build a plan to achieve them, you'll find that the payoff is well worth the effort.”

Meridian, Ontario's largest credit union, offers tips on how to save for your retirement while tackling debt.

Get a personalized financial plan – Working with a trusted financial advisor to create a personalized financial plan is like driving with a GPS system – you'll reach your end goal faster and with less stress. Make sure you are honest with your advisor and give them the full picture. Let them help you reach your goals and check in with them at least once a year to re-evaluate your plan and make any necessary course corrections to keep you on track.

More information is available online at www.meridiancu.ca.

Be strategic – Pay off the debt with the highest interest rate first, while paying the minimum on the rest of your debts. Once that first debt is paid off, concentrate your efforts and funds in paying the next debt with the highest interest rate.

Invest automatically – Saving for the future is easy if you put your savings on autopilot. Many financial institutions provide pre-authorized contribution (PAC) plans, which will automatically transfer funds from your chequing account into your savings investments at regular intervals. PACs are a great tool for contributing to RSPs or TFSAs and if you coordinate the withdrawals to align with your payday, the money won't even be missed.

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