This is the million dollar question. Or is it the five-hundred thousand dollar question? One of the biggest fears Canadians have about their retirement is outliving their money. Retirement income does not have to be an anxious or stressful topic, if properly planned for.
The key to avoiding the anxiety is determining the annual income you will require in retirement. Easier said than done. According to Money Sense magazine (summer 2013), there are 5 levels of middle class lifestyles with the required funding (before taxes):
- Bare necessities ($25,000/year)
- Basic ($40,000/year)
- Average ($55,000/year)
- Upper ($70,000/year)
- Deluxe ($100,000/year)
Maximum government benefits will fund approx. $30,000/year(couple). Depending on your desired retirement lifestyle, you will have to generate the balance of the income from other sources. If you’re fortunate enough to have a defined benefit pension plan (“DBPP”), then the remaining deficit will have to be funded through investment assets. Without a DBPP, your investment assets will have to fund a larger deficit, thus their value at retirement must be much larger.
Speak with one of our advisors today to find out if your savings plan is in line with your retirement income goals.
