How to invest for retirement? A step-by-step guide for Canadians

August 07, 2022 09:10 AM EDT | By Kajal Jain
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  • Retirement investing when strategized properly can ensure financial stability during your golden years
  • Investing in stocks is one of the popular way that youths and experienced investors explore to build wealth over the years
  • Long-term approach can help investors battle against fear of market correction or crashes in the short run

Every Canadian dream of living a financially healthy retirement life and it can be turned into reality if people assess their retirement goals and needs. Retirement investing, when strategized properly, can ensure financial stability during your golden years.

Investing your retirement money correctly can generate wealth that could help combat inflation and tough economic situations. Although, retirement investing has its own risk as the market could fluctuate widely before yielding any return. Hence, one should be making investment choices based on their instincts.

Following are some basic principles that savvy investors should know about to make accurate investment decisions for retirement.

1.     Investing in stocks

Investing in stocks is one of the popular ways youths and experienced investors explore to build wealth over the years. Many often take inspiration from renowned investors like Warren Buffett to pursue value investing, focusing on quality businesses that are believed to increase in value in the long horizon significantly.

Besides this, the growth approach focuses on businesses that can substantially outpace the overall market in the future. However, it involves greater risk than value investing.

How to invest for retirement?©Kalkine Media®; ©Garis Studio via

2.     Long-term approach

Capitalizing on market trends could be complex way as one needs to speculate price movements and act promptly; otherwise, it could result in losses. Hence, a long-term approach avoids this hectic task and helps in battling the fear of market correction or crashes in the short run.

3.     Diversify your portfolio

Investing money in stocks belonging to different sectors like utility, financial service, real estate etc., can protect your portfolio from economic uncertainties and market downturns. Diversification is a healthy habit that investors need to follow as they grow stock holdings in their retirement portfolios.

4.     Adjust asset allocation

Risk level often changes with age. For instance, it is believed that the risk of market correction affecting your portfolio increases as one gets old. Hence, investors must adjust asset allocation depending on their current risk levels to ensure financial and emotional well-being.

5.     Check investment fees

Whether young or older, all investors should know about what charges brokerage fees they are paying on their investments, as these expenses could take away your returns. Hence, comparing investment costs and services offered by different trading platforms or brokers is vital.

6.     Know what you are getting into

Investing your retirement savings without acquiring enough knowledge about the company’s business is highly risky and could affect your financial and mental wellness. Hence, one should be aware of how a stock or any investment options like exchange-traded funds (ETFs), mutual funds, etc., actually works before diving into any financial decision.

Bottom line

Investing for retirement involves thinking about retirement goals, changes in income and spending habits, and making sure you live the desired retirement life, which could be possible if one properly plans and executes a retirement plan. Investment choices can vitally impact how the money in your retirement portfolio grows. Hence, evaluating and exploring investment options that suit your retirement needs is necessary.


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