The answer is $1,050,976. I wish it was that easy! A million dollars sounds like a lot of money but it no longer guarantees a five-star retirement. People are living longer and will need to have enough money to support themselves for 25 to 30 years in retirement.
Typically I see clients spend more money when they initially retire. This is the time in their lives when they are still healthy and full of energy. They travel more, focus resources on hobbies and other interests and do many of those things they have been putting off during their working years.
10 Keys to Retirement Planning
- Set a savings goal to replace 60% to 70% of your gross working income
- Maximize contributions to a company pension if available
- Start saving early, take advantage of compounding investment returns
- Make monthly contributions to retirement savings plans (RRSP & TFSA)
- Reinvest tax savings from RRSP contributions
- Reduce investment costs (commissions, mutual fund fees etc)
- Eliminate all debt (mortgage, car loans, line of credit)
- Make your plan tax efficient to take full advantage of income splitting
- Maximize government benefit plans (CPP, OAS, GIS) if applicable
- Review your plan and make the appropriate adjustments
The Fraser Institute recently published a survey showing many Canadians believe they’re heading into retirement shy of their goals by hundreds of thousands of dollars.
There are geographic differences, of course: Those in the Atlantic region believe they’re short by $673,000, those in Quebec by just $267,000, those in Ontario by $649,000, those in Saskatchewan and Manitoba by $334,000, those in Alberta by $479,000, and those in British Columbia by $814,000.
Don’t be caught short of your retirement goals. Plan now, start saving, invest wisely and enjoy a comfortable life style during your retirement years.