Think retirement planning is for later? Think again.

SPM Financial |
Categories
Saving and Investing
Retirement
Financial Planning
Young professionals

If you’re a professional deep in the demands of a growing career, completing residency, putting in long hours at the firm, or building your practice, retirement planning might feel like something you can deal with down the road. 

But here’s the truth: the most powerful retirement plans aren’t started in your 60s. They’re built early on, when your habits, income, and opportunities are still growing. Starting now means you’ll have more control, more flexibility, and fewer surprises later on.

The good news? We’re here to help you build a plan that starts early and grows with you. Here are a few considerations:

1. What do you want your future lifestyle to look like?

You don’t need all the answers today. But the earlier you start thinking about the big picture, the easier it is to plan for it.

Ask yourself:

  • Do I want the option to retire early?
  • Will I still be supporting my kids when I retire?
  • Do I plan to travel, downsize, or own multiple properties?
  • Do I want to help fund my children’s education or pass on wealth?

These questions help us build a long-term savings and investment plan based on your personal situation, not just a generic formula.

2. Your time horizon is your biggest asset

Canadians are living longer. The average life expectancy is now over 81.9 years, well above international benchmarks.1 That means your retirement could last two or three decades, or even longer. The earlier you start saving, the more time your investments have to grow and compound.

If you’re 35 and saving $1,000 per month, you could accumulate over $1 million by age 65, assuming a modest 5% annual gross return. If you wait until age 45 to start, you would have to more than double your monthly contributions to hit the same goal.

The bottom line? Starting early, even with smaller contributions, will give you more options for retirement.

3. Your expenses will shift, and so will inflation

Your current lifestyle might look very different in 30 years. That’s why it’s critical to factor in not just how you’re currently living, but how that could change over time. The early stage of retirement often includes more travel and leisure experiences, while the later years bring healthcare and home care considerations. Add to that inflation: A $75,000 lifestyle today could require more than $120,000 in just 20 years at a 2.5% average inflation rate. That’s why we look at not just what you earn, but what you’ll need throughout the years.

4. Use tax-sheltered tools while they’re most powerful

Using the right accounts to save can make a big difference – especially when you use them early and consistently. Here’s what saving tax-efficiently could look like:

  • Tax-Free Savings Accounts (TFSAs). Contributions to TFSAs aren’t tax-deductible, but they offer tax-free growth and withdrawals. This flexibility makes them great for saving for travel, large purchases, or to cover any gap years. What about once you reach retirement? As TFSAs allow for tax-free withdrawals, they can be a great option to help supplement your retirement income without affecting government benefits like Old Age Security (OAS).
  • Registered Retirement Savings Plans (RRSPs). These accounts allow you to grow your savings on a tax-deferred basis, but any withdrawals are fully taxable. It’s best to contribute to your RRSP in high-income years as it can help reduce your tax bill now and grow retirement income for later.
  • Corporate investments. If you’re incorporated, investing through your corporation can help you grow wealth at a lower tax rate and defer taking a personal income. It’s not just about saving, it’s about putting every dollar to work in the smartest way possible for you.

5. Incorporated? Your corporation can become your retirement engine

For incorporated professionals, your business isn’t just a source of income. It can also fund your future.

Here are a few ways to use it wisely:

  • Invest within the corporation: Grow your capital at a lower tax rate and access it when you need it.
  • Use corporate-owned life insurance: This can provide long-term tax advantages and can support wealth transfer or retirement cash flow.
  • Defer personal income: Keep money in the corporation and draw dividends later, when your personal income and tax rate are lower.

We’ll help you use every available tool to your advantage, with tax efficiency top-of-mind.

Retirement planning isn’t rigid, it’s dynamic

Life changes. That’s why we treat your retirement plan as a living document: something that grows with you, and adapts to market changes, career shifts, and personal goals.

Retirement isn’t just something you “deal with” in your 60s. It’s a strategic opportunity you build toward, starting now. We’re here to help you think long-term, stay flexible, and make decisions today that set you up for the future you want.

Let’s talk. Your future self will thank you.

Sources

1. Corporate information: Public Health Agency of Canada 2024-2025 departmental plan. March 21, 2025. Government of Canada. https://www.canada.ca/en/public-health/corporate/transparency/corporate-management-reporting/reports-plans-priorities/2024-2025-corporate-information.html.

The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.