Toronto tech worker saves for parents' retirement while handling job volatility

TORONTO · A young Toronto tech worker is aggressively saving for her parents' retirement while handling the volatility of her industry and her own financial goals. Grace, who moved from Korea to Toronto as a child, has amassed $297,000 across various savings and investment accounts. Her top financial concern is the longevity of her job in the current tech climate. "The longevity of this job, because I am working in tech and it’s super volatile right now," Grace said. "If I want to get a home or save for my parents’ retirement, I need a predictable stream of income."

Her parents, immigrants who worked low-paying jobs, have little in retirement savings. "Being immigrants, they didn’t know about RRSPs or TFSAs," Grace said. "They were missing a lot of the fundamental knowledge of things that would have set them up for a better situation." Grace now lives with them, paying no rent but covering significant family expenses like property taxes, car repairs and emergency travel. She allocates $800 monthly to parent care, an amount that can rise to $2,000 some months. "They’re barely making it paycheque to paycheque," she said. "They have no real retirement savings."

Grace's own savings include $15,000 in a savings account, $82,000 in a tax-free savings account, $64,000 in a registered retirement savings plan, $39,000 in a first home savings account and $97,000 in non-registered investments. She contributes $583 monthly to her TFSA, making the full annual contribution at the start of each year. Other monthly expenses include $220 toward the remaining interest-free portion of her student debt, $30 for occasional gas for her parents' car, $200 for Uber or taxis for commuting and leisure, $30 for alcohol for celebrations or work events, and smaller amounts for personal services. She funded her university education through a scholarship and a co-op program that combined math and business. "There was exponential growth from term to term in terms of the salary I was able to make," said Grace, who is now in her second full-time job since graduating. Her first job was at a large European company with a strong work-life balance. She now works at a startup where her hours have nearly doubled, but her salary has also almost doubled. "Now I am at a startup and it’s definitely a grind. My hours have probably almost doubled," she said.

The move to a smaller company has given her more visibility with senior leadership. "At my previous company, I was many layers removed from the C-suite. Now I interact with those decision-makers every day," Grace said. "If they find you valuable, they will do what it takes to keep you there." Despite her financial success, she finds it challenging to be surrounded by other high-earning tech workers who may not have similar family responsibilities. "There’s people in the same position career-wise, but they might not have the same responsibilities to family or are even getting help from their family," she said. "I try not to compare myself." Grace is also saving toward her own goals of home ownership, marriage and children. She has a long-term partner but is uncertain about combining finances given her commitment to supporting her parents. Her monthly budget also includes $4,000 for payroll deductions, which varies, $10 for haircuts every six months to a year, and $20 for personal services like nails and lashes around vacation time.

With files from The Globe and Mail