Today Canada is dominated by five large banks, that now control 91% of the entire Canadian financial service industry, with approximately $4 Trillion in assets.

The Royal Bank’s recent purchase of HSBC only amplifies this fact. Many may think that there are larger industries in Canada, however as of 2021 the financial sector is now the largest industry in terms of employment in Canada. There now is so much information out there, it’s hard to know if someone is trying to truly help you or sell you something that is necessary for them to meet their sales quota.

Because of this, I want to provide my readers with a basic financial plan strategy. One that every Canadian can fit into their life and we will break it into four stages. Use it as a guideline – something to work towards. Guaranteed, if done as presented, it will reduce the financial uncertainness that impact your life, and help you reach retirement debt free and wealthy.

Stage 1: In your 20’s you will have debt – either consumer and/or school debt. This is the time to begin saving and establishing good credit so that you can borrow from the banks in the future. You don’t want to pay higher lending rates simply because you continually overindulge or can’t pay your bills on time. Open a tax-free savings account (TFSA) and have 15% of your paycheque taken out of your bank account the same day that you get paid (setup automatically with your bank). Once the TFSA is maxed, open a RSP account and do the same. TIP: Invest in ETF’s (exchange traded funds) that follow an index such as the S&P 500 or the Nasdaq Composite. Don’t have too much invested domestically. Historically, the US stock market has always outperformed all others.

Stage 2: Now in your 30’s you will most likely be working full-time and it is imperative that you continue your savings regime as in Stage 1. Always take 15% off the top of your paycheque to be first put in your TFSA and then into your RSP. If you are lucky enough to hit your maximum RSP contribution limit, any other savings should go into a non-registered investment account. In this decade you want to get into the real estate market. You may need to buy a home with friends or family or even take in boarders to help make ends meet. I know it will be a stretch for most young Canadians, but it is an absolute necessity to give you more options for the future. You should have a Will + two Power of Attorney (medical direction + assets) and review your insurance needs at this stage.

Stage 3: This is the phase that combines your 40’s and 50’s and it’s most likely when you will have your maximum earning potential. Always keep building on the foundation that you created in Stage 1 (15% towards TFSA, RSP, non-registered accounts). At this point you now must work to eliminate debt. You may have upgraded your home, have a second home, started a business or be thinking of your children’s education. All these added expenses will have a huge impact on your income – but never succumb to reducing your 15% savings routine. During your 50’s you must work at eliminating all debt. Why not refinance into a new mortgage with the amortization set to the year you plan to retire. Setup this way – you’re guaranteed to have zero debt at retirement.

Stage 4: This phase starts in your 60’s and goes to your 90’s. You will want to start simplifying your lifestyle and your commitments especially as you age. Stage 1 and 2 were all about building your life and acquiring “things” to make you happy. In this stage you must now start the “big purge,” reduce the clutter, downsize or right-size your residence to eliminate any remaining debts, lower expenses and add more funds to your retirement savings. In your 60’s it is a good idea to update your Will and POAs. In your 70’s to 90’s, make sure you have a plan to fill your days if you have stopped working and always work towards improving  your health, plus keep active – both mentally and physically.


Good Luck & Best Wishes,

Christine Ibbotson