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4 Secrets to Saving for Retirement

GICS? Dollar-Cost averaging? Sort through the confusion and plan your retirement responsibly by learning the tips and tricks to retirement savings.

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Saving for Retirement in a Volatile Market

Are you disillusioned about retirement savings because you lost chunks of your portfolio in the recent stock crashes? We sought the advice of some of Canada’s top financial experts for some ideas and tips to help you get decent interest on long-term investments while protecting your nest egg against a volatile market.

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1. Create a GIC Strategy

Since market conditions can affect the return on guaranteed investment certificates, it’s best to stagger their maturity dates, advises money maven Gail Vaz-Oxlade, host of the TV show, Til Debt Do Us Part. This way, you’ll be able to take advantage of increases in rates.

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2. Use Dollar-Cost Averaging

You can actually benefit from a volatile market, according to Fidelity Investments. Through an investment technique known as “dollar-cost averaging,” you invest a set amount regularly, regardless of market performance. When prices are low, you buy more shares of an investment option; when prices are high, you buy less – probably resulting in a lower average price per share than if you invested all your money at once.

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3. Forget Fees

Management fees can eat up a lot of your investment money. Investing in a small collection of low-cost index funds, which passively follow the ups and downs of market indexes – a strategy known as the “couch potato” – is one way to reduce these fees. You only need to rebalance your portfolio once a year, and over the course of a few years you should be faring better than most of the actively managed funds, according to MoneySense magazine.

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4. Consider Preferred Shares

If you’re willing to take risks beyond bonds and GICs, preferred shares, a type of stock that regularly pays you dividends, are generally considered safer investments than equities, says Andrew Pyle, a wealth advisor with ScotiaMcLeod.