Price inflation and a difficult economic environment has made it more challenging for young Canadians to save and invest in their future. Unfortunately, defined-benefit pension plans may also be extinct in the private sector by the end of this decade. Millennials must work hard and be creative if they hope to achieve a comfortable retirement in the future. Today, I want to look at three RRSP strategies that are worth pursuing.
Pursue a growth-oriented strategy
Millennials may not have the advantages that previous generations had when it comes to opportunity and access to what has been considered a “middle-class life”. However, millennials do have one major advantage; time. That is why millennials should commit to a growth-oriented strategy in their RRSP. This means taking on more risk in the near term. However, this is mitigating over a long time horizon.
Gobble up income in your RRSP
Not all millennials will be keen on committing to high-risk growth stocks in their RRSP. Instead, they may want to seek growth in another registered account like a Tax-Free Savings Account (TFSA). For these investors, safer income-generating equities may be the better option. This way millennials can reduce risk in their RRSP while also rely on steady income.
Consider a balanced approach
A balanced strategy offers a middle ground for millennials. Canadian bank stocks, which have posted solid capital growth and pay out middling dividends, are a great target for the balanced investor. Over the long term, these blue chip stocks can still set you up nicely for retirement.
