I’m about to retire and still have a mortgage. Am I in trouble? + MORE Jan 23rd

If you have decent savings and only a year or two to go on your mortgage, you should be fine. If you have 10 or more years, then you may have to consider options, including downsizing

The year 2022 was the one when inflation morphed from a minor concern to a major worry for investors, especially those hoping to retire sometime in the not-too-distant future. While central banks are well into their programs to curb inflation through periodic rises in interest rates, it could take the better part of 2023 or beyond before inflation returns to the 2% annual target with which most governments are comfortable. The Bank of Canada (BoC) has had a 2% inflation guideline since 1995.

How Canadian investors are responding to inflation fears

Not surprisingly, inflation is of particular concern to retirees and those hoping to retire soon. A recent Leger/Questrade poll, entitled the 2023 RRSP Omni report, found that while 87% of Canadians are worried about rising prices, many are still looking to invest. In fact, 73% of registered retirement savings plan (RRSP) owners plan to contribute this year, and so do 79% of those with tax-free savings accounts (TFSAs). The confidence in investing is surprising despite the fact Canadians are fretting over how inflation will impact the value of their RRSPs (69%) and TFSAs (64%)…

If you have decent savings and only a year or two to go on your mortgage, you should be fine. If you have 10 or more years, then you may have to consider options, including downsizing

Maybe you’re taking your first steps towards saving for retirement. Or maybe you’re in the home stretch. Either way, you will likely be using a registered retirement savings plan (RRSP). This Canadian tax-sheltered savings account is more than six decades old, and it has formed the backbone of retirement planning for most Canadians since the ’80s, when employer-sponsored pension plans began their decline.

Even if you’re familiar with RRSPs, there may be nuances worth exploring here. And sometimes there are new developments that reshape traditional retirement planning. Most important today is the increase in life expectancy over the past generation. That’s great news, but it also presents a challenge: Investors may need to make their money last even longer in retirement.

Fortunately, the investing world also has fresh ideas and financial products that should rise to the occasion.

RRSPs and tax considerations

RRSPs are best known for their tax deferral. Investments grow tax-deferred inside the account and are only subject to income tax when they are withdrawn…