Monday, July 31, 2017

5 steps for saving for retirement

Save for retirement in five simple steps

Here at Continuum II we get asked all the time "how much do I need to save before I can retire?"

The answer is; retirement is not one-size-fits-all and everyones ability to retire depends on a variety of factors. For example; it depends on how much you make, what age you want to retire, your current standard of living, your pension (or lack thereof), only to name a few.

To help give you a ball park figure of what you need to save for retirement, The Globe and Mail has put together a list of 5 simple steps to arriving at your ideal retirement goal.

1. Figure out how much of your working income you will have to replace in retirement.
  • Most people find they will need to replace between 50-70% 
2. Consider how much you will receive from the government by the way of Canada Pension Plan and Old Age Security.
  • For a lifelong resident of Canada who has worked steadily for decades the typical annual payout is $15,000 (this is just a rough number, it could be lower or higher depending on your financial history)
3. Do the math.
  • If your household income is $120,000 a year (and you need to replace 60%, your target income would be $72,000). From this figure subtract what you would receive from government programs. If you receive roughly $30,000 from government programs, that means you will need to generate $42,000 from other sources.
4. Consider your pension.
  • Your workplace pension may be able to cover the remaining portion of your retirement income not covered by government programs.
  • If you don't have a pension, you could purchase annuity, which would pay you the remaining portion annually. Find out more here.
5. Plan for the unexpected.
  • We can't stress enough how important it is to plan for the unexpected. To be more safe than sorry, you might want to add a little extra to your figures as cushion

While the above can help to give you a rough idea of what you'll need to save for retirement, the best option will always be to contact an advisor who can help you build a plan that fits with your unique financial lifestyle.

Don't have a retirement plan? or do you need a little extra help with your current retirement plan? Contact our offices today and let us help you feel comfortable and confident about retirement.

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