10.3.2 Video: How to save for retirement



If you're like most people, you'll need to save for your retirement to boost your pension. In this video, we'll learn about different types of savings plans that will let you build up your retirement nest egg.

Before we do that though, let's find out how working people are currently saving and what they think about government and employer pensions.

Segment 2: Contextual background

Phase 1:

  • Do you think that your government or employer pension will provide you with enough income in retirement?

Clearly, many people feel that they will need to have additional sources of income to supplement any pensions that they will receive from the government or their employers. It's smart not to rely only on a pension plan.

Now let's find out how Canadians are saving for retirement.

Phase 2: Streeters ask working people how they are saving for retirement.

  • Are you saving for your retirement?
  • Do you have a set amount of money or percentage of your income that you save each year for retirement?
  • What are some of the savings options you use?

As you can see, different people have different plans. Which types of savings options would help provide for your retirement?

Segment 3: Types of retirement savings vehicles

Savings vehicles that you should consider include:


  • Savings accounts: However, they may pay very low rates of interest.
  • Registered savings plans such as registered retirement savings plans (RRSPs) and tax-free savings accounts (TFSAs). These allow you to save while avoiding or delaying some of the taxes you pay.
  • Unsheltered investments. These are investments or accounts that do not shelter your money from tax. Like registered savings plans, you can invest in stocks, bonds, Guaranteed Investment Certificates (GICs) and a wide variety of other financial products.
  • Income or profit from the sale or rental of your family home, business or other property

However you save, the key is to start early. Put money into a savings plan on a regular basis, weekly or monthly if you can. This way your savings can grow through the power of compounding investment returns.

Segment 4: Savings strategies

Now that we've considered types of savings vehicles, let's see how you might structure your investment portfolio.

At any stage of life, take full advantage of tax-sheltered vehicles like registered savings plans. It's also a great idea to start young.


At 25 years old, Pauline is young, is comfortable with risk, and can invest more aggressively. When you're young, you may be able to invest in higher-risk investments because you'll have more time to recover from any investment losses. That's why Pauline chooses to invest 80% of her savings in stocks and equity mutual funds.

As you grow older, you may want to keep more of a balance between growth and income investments.

At 40 years old and with a family, Alex still has a fairly long investment time horizon. He is comfortable with some risk and chooses to invest 60% of his savings in stocks and equity mutual funds. For balance, he invests the remainder in predictable and safe interest-bearing investments.

When you near retirement age, you might want to shift to a higher proportion of safer, guaranteed investments. Karen and Samuel are nearing retirement. They want less risk and choose to protect their savings by investing 60% of their savings in predictable and safe interest-bearing investments.

At all stages, make sure your portfolio is diversified – that is, spread your investments over a variety of different products and product types.

Each individual's situation is different, so these choices are not necessarily best for everyone in a similar situation. It's a good idea to find a registered financial professional who can help you choose the mix of investments that is best for you.


With the right strategy and smart, diversified investment choices, you too can build a nest egg to provide for your retirement or other savings needs.

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