Why 'paying yourself first' is the key to a comfortable retirement

One of the most effective retirement savings strategies is to pay yourself first. In his personal finance column for CTVNews.ca, Christopher Liew outlines strategies for consistently saving and investing over time and building a solid nest egg.

Are you thinking of planning for your retirement? One of the most effective retirement savings strategies is to pay yourself first.

This concept involves prioritizing your savings by automatically setting aside a portion of your income for retirement before addressing other expenses or spending money on non-necessities.

By consistently saving and investing over time, you can build a solid nest egg, leverage the power of compounding interest, and set yourself up for a very comfortable retirement.

The term is often thrown around in the world of business and entrepreneurship. In an effort to constantly grow and expand, many small business owners re-invest every dollar they make into their business, often leaving their own savings dry.

This principle applies just as much to employees working toward retirement as it does to small business owners, though.

Last year, 49 per cent of Canadians weren’t able to save anything for their retirement, according to a recent survey by the Healthcare of Ontario Pension Plan (HOOPP).

To be fair, the rising cost of rent, groceries, and other living expenses has been disproportionate to rising income, leading six in 10 Canadians to question their ability to keep up with the cost of living, per Statistics Canada.