“My parents had a very cautious view of investing, a view they passed on to me. So when I started saving, at 24, I turned to guaranteed investment certificates, GICs,” says Alexandre Clermont.
He says that at the time he had no specific plans for his savings: he saved because he knew it was good practice and that he would surely need it for retirement, but without more.
Over the years, however, he realized that GICs didn’t pay much. After contacting a financial planner, he agreed to change his approach. He opened a TFSA, which he now manages himself, for all the advantages attributed to it, such as the fact that the withdrawals and the income generated are tax-free.
I remain cautious in my investments. But today, I have a diversified portfolio made up half of index funds and half of shares of a total of twenty companies.
Alexandre Clermont, urban planner
This year alone, he saved $5,000 in his TFSA. Last year ? About $10,000.
“It is certain that for two years, because of the pandemic, we have made fewer outings to restaurants, bars and shows, so that has helped. »
The TFSA before the RRSP
In mid-career, Alexandre Clermont expects to see his salary increase significantly in the years to come. As a result, he explains that he is giving priority to his TFSA for the moment, rather than the RRSP, so as to keep more contribution room in the latter account.
“When I have a higher income, the RRSP will allow me to save more taxes than today,” he explains. Although the flexibility and simplicity of the TFSA in terms of withdrawals remain a secondary advantage for him – retirement savings being in his case its main use and advantage – he has been able to take advantage of it in recent years.
The TFSA, for example, allowed Alexandre Clermont to save for renovations. In particular, he withdrew $10,000 for this purpose in recent years.
“And we may have other renovations to come, albeit smaller ones. »
The retreat for two
Before using it to finance his renovations, Alexandre Clermont uses his TFSA to ensure a pleasant retirement.
I don’t think I’ll retire at 50 or 55. I’m aiming for 60 instead. But I would like to travel. I’m still young to have a very concrete retirement plan, so we’ll see where life will take us, but that’s largely why I save!
Alexandre Clermont, urban planner
One thing is certain, he and his spouse will enjoy retirement together.
Because Annie, his better half, describes herself as a “mega-saver” and also actively participates in the management of family finances.
“I pushed Alexandre to save even more because I want us to retire together, at the same time,” she says with bubbling enthusiasm.
“I’ve been saving since I was 19 and maximizing my contributions in all my accounts,” she says. I told him : “GB, go ! I don’t want us to be caught working until 75!” »