Looking for an easy and convenient way to start building up savings for retirement? With Pre-Authorized Contributions (PACs), you choose the amount you’d like to contribute, and how often – and you make adjustments at any point in time!

The beauty of a PAC is that it’s automatic. Just choose the amount you want to save and how often you want to save it–for instance, weekly, biweekly or monthly. Once it’s set up, you’ll be saving money without even thinking about it.

Quick Fact. The ability to retire comfortable is the most important financial goals for Canadians

PAC Benefits

1. Helps you stick to your plan

When it comes to saving, it’s sometimes easy to get sidetracked. A PAC allows you to make saving priority number one by ensuring you never forget your plan.

2. Minimizes scrambling to meet Registered Retirement Savings Plan (RRSP) deadline

With a PAC you’ll save automatically for your RRSP–all year round–and avoid the stress of meeting the RRSP contribution deadline and making a yearly lump-sum contribution.

3. Eliminates the guesswork of when to invest

Research has shown that investing on a regular basis is much more effective than trying to “time the markets”–especially during periods of volatility. 

4. Works with almost any budget

With a PAC, you determine what you can afford to save. Get started with as little as $25 per month.

5. Takes advantage of potential compound growth

Saving over a longer period of time allows your money more time to grow and to benefit from compound growth.

Didi you know 65% of Canadians save money on a monthly basis?

“PAC” it up – contribute more as you earn more

As you get older, it’s likely your cash flow will improve. While two in three Canadians are saving on a monthly basis,2 many forget to adjust their plan as their financial circumstances change. It’s a great idea to revisit your PAC contributions on a regular basis– especially after major changes, like paying off student debt or landing a promotion. While it’s tempting to just set it and forget, you’ll be amazed by how much more you can save by increasing your contributions–even a little bit.

In the graph below, we look at an investor who contributes $200 monthly for 15 years versus the same investor increasing their monthly contribution by just $25 each year.

PAC contributions over 15 years. Over a 15 year period, the difference is over $40000

Want to get on top of your investment and savings planning?

Make it bi-weekly and save even more

Changing your contribution from a monthly basis to bi-weekly can really add up. You may be making bi-weekly mortgage payments. Do the same with your savings. It’s a small change, but the benefits can add up.

The example below underscores the savings advantage provided by bi-weekly contributions over a 20-year period. 

You save almost $7000 more when saving on a bi-weekly basis versus a monthly contribution

PACs - making the most of market volatility

Market swings often make it difficult for investors to determine exactly when to invest–especially when trying to invest one lump sum each year. However, with PACs you can invest a fixed-dollar amount at regularly scheduled intervals.  By contributing on a regular basis, you take advantage of the market dips by purchasing more fund units when your dollar goes farther and in turn, lowering your average cost.

The graph above illustrates regular monthly contributions of $250 at the beginning of each month. As the unit price fluctuates from month to month, the quantity of units purchased also changes (when the unit price is lower, more fund units are purchased: when the unit price is high, less funds are purchased). 

Your Scotiabank advisor can help

Investing on a regular basis through pre-authorized contributions is a great way to build your savings easily and automatically. Try our interactive PAC calculator to see how your savings can grow.

Want to learn more about how a PAC could work for you? A Scotiabank advisor can help set up a PAC that meets your needs.