Retirement Planning by Age: What to Do in Your 30s, 40s, 50s & 60s

In Your 30s: Build Your Foundation

You probably don't feel like you have much money—rent is high, maybe you're paying student loans, and retirement feels impossibly far away. But this is your superpower decade. Time is your most valuable asset, and you have 35 years of compound growth ahead of you.

Priority 1: Eliminate High-Interest Debt

Credit card debt at **19–21% interest** is an emergency. You cannot retire while carrying this debt because no reasonable investment return beats 20%. If you owe $10,000 on a credit card at 20%, you're losing $2,000 per year to interest alone. That's twice your monthly contribution getting eaten by debt.

Kill it first. Use the debt avalanche method: list all debts, pay minimums on everything, and throw every extra dollar at the highest-interest debt. Once it's gone, redirect that payment to savings.

Student loans (typically **4–6% interest**) and car loans (**5–8% interest**) are different. These are lower interest and you can carry them while saving. Don't pause retirement savings to aggressively pay down a 5% student loan—your investments will likely outpace that rate over 30 years.

Priority 2: Build a Three-Month Emergency Fund

Before you max out retirement contributions, save **three months of expenses** in a high-interest savings account (currently **4–5%** in Canada). This prevents you from raiding retirement savings when your car breaks down or you lose your job. An emergency fund is boring but it's insurance against derailing your retirement plan. Once you have three months set aside, move forward with the next priority.

Priority 3: Start Contributing to RRSP and TFSA

You have two tax-sheltered accounts in Canada: the **Registered Retirement Savings Plan (RRSP)** and the **Tax-Free Savings Account (TFSA)**.

RRSP: Contributions reduce your taxable income (you get a tax deduction), and all growth is tax-deferred. At age 30 earning $60,000/year, you're likely in the 20–25% tax bracket. Every $1,000 you contribute saves you $200–$250 in taxes. That's free money. By 2026, the annual RRSP contribution limit is **18% of prior-year income**, capped at $31,560. At $60,000 income, you can contribute ~$10,800/year or $900/month. You won't use your full room, and that's okay—unused room carries forward forever.

TFSA: Contributions don't reduce your taxable income, but all growth is completely tax-free and withdrawals are tax-free. There's no Required Minimum Distribution—your money grows untouched. By 2026, cumulative TFSA room for someone 30 years old is approximately **$95,000** (the annual limit is $7,000, with $1,000 more added annually). Most 30-year-olds haven't used all their room, so you have a backlog to catch up on.

Contribution strategy for your 30s: Start with at least **$200–$400/month** split between RRSP and TFSA. If your employer offers an RRSP match, prioritize getting that first—it's free money. Contribute enough to get the full match, then split the rest between RRSP and TFSA. A basic example: earn $60,000, employer matches 5% of RRSP contributions (up to $3,000/year). Contribute $250/month to RRSP to capture the full match ($3,000), then contribute $250/month to TFSA. Total: $500/month. This is aggressive relative to your income, but compound growth over 35 years will dwarf these early contributions.

Priority 4: Capture Employer Matching

If your employer offers an RRSP or pension match, take it. It's a guaranteed immediate return on your money. If your employer matches **5% of contributions**, and you don't contribute 5%, you're leaving free money on the table. Prioritize this over extra TFSA contributions.

Priority 5: Learn Investing Basics

You don't need to be a stock-picker, but you should understand:

• Asset allocation: The percentage of stocks vs. bonds you own. In your 30s, a **70/30 or 80/20 stocks/bonds split** is reasonable—you can weather market downturns and have 35 years to recover.
• Diversification: Own Canadian stocks, U.S. stocks, and international stocks; don't put everything in one company or sector. Index funds and ETFs make this easy and cheap.
• Fees: Investment fees compound against you. A 2% annual fee costs you 50%+ of your returns over 30 years. Use low-cost index funds (0.05–0.35% fees) and avoid high-fee mutual funds (1–2.5% fees).
• Tax efficiency: The most tax-efficient investments go in your TFSA (individual stocks, Canadian dividend stocks). Tax-inefficient investments (bonds, foreign dividends) go in your RRSP.

You don't need to memorize portfolio theory. Just understand enough to choose a simple portfolio and stick with it.