Most people would imagine asking for a million dollars if they were provided with the opportunity to get a free wish from a magic genie in a bottle. We often aspire to reach this million dollar status, however, without the belief that it could be a realistic realization. But what if we all could really becoming millionaires by the time we retire? Sounds nice doesn’t it?
Yesterday, a QMI Agency report was released encouraging Canadians to believe that becoming a millionaire is more in reach than we may all think. According to TD Canada Trust, it’s all about how you save the money you make throughout your life. By the time you retire, you could be a millionaire if you save right.
Sounds too easy, right? If that’s what you think, then you’re not alone. Three quarters of Canadians feel that they won’t be able to hit the million dollar mark by the time they are ready to leave the workforce. In fact, a third of Canadians think that winning the lottery will be a more likely route to becoming a millionaire.
However, TD insists that it is as easy as putting away the right amounts of money regularly, says the report. In fact, QMI reports that most Canadians actually overestimate the amount of money that they need to put away in order to have a million dollars by the time they retire.
According to the report: “About 16% of those aged 18-34 think they need to save between $1,000 and $2,000 a month, with a further 16% saying the figure is more than $2000. A further 22% said they didn’t think it was possible to accumulate a $1 million by setting aside a certain amount from each paycheque.”
TD believes that coming up with a stringent saving plan can help Canadians reach their target without having to put that much money away. In fact, the bank recommends that if people in their 20’s begin contributing at least $100 a month to an RRSP, they will be on the right track.
For people in their late 30s and 40s, saving $500 a month will do the trick while those 50 and up should try to save $1000 a month to hit the million dollar mark for their retirements. An RRSP earning a rate of 6.8% a year compounded monthly will be essential to making the plan work.
Says Carrie Russell, the senior vice-president at TD Canada Trust: “The reality is that for Canadians who are several decades away from retirement, with good discipline, the right financial plan, and smart investments, heading into retirement as a millionaire is an attainable goal. The idea of retiring a millionaire sounds daunting to most, but there are steps you can take to reach that goal — with no lottery tickets required!”