Church Pickard - How Much Do You Need To Retire?

This question is not much different than, “How much do you need to earn to live comfortably?”

It depends on your needs and wishes

Let’s create some situations:

Let's assume we will all live to age 90.
Let's assume we all earn an average of 6% per year on our investments.
Let's assume all our investments are in RRSP's.
Let's assume we will pay 30% tax - Oh to be so lucky.
Let's assume there will be no inflation - nice thought.
Let's assume there is no CPP or OAS - not good.
Let's assume we have no savings now - not good.

Example # 1

Age today - 30 / Retirement age - 55 / Monthly cash flow required at retirement - $4,000 after tax. How much would you need to save for the next 25 years? = $18,230 per year

* If you saved $18,230 per year for 25 years you would have $1,000,000 at retirement, which would give you income of $5,750 per month for life.

Example # 2

Age today - 40 / Retirement age - 65 / Monthly cash needs at retirement - $2,000 per month after tax. How much would you need to save for the next 25 years? = $8,200 per year

* If you saved $8,200 per year for 25 years you would have $450,000 when you retired which would give you income of $2,855 per month for life.

Example # 3

Age today - 50 / Retirement age - 65 / Monthly cash needs at retirement - $3,000 per month after tax. How much would you need to save for the next 15 years? = $29,000 per year

* If you saved $29,000 per year for the next 15 years you would have $675,000 at retirement which would provide you with $4,284 per month for life.

Conclusion:

These are very simplistic examples as the RRSP rules may not allow contributions and the tax rates vary, etc. But it shows how planning is the only way to achieve one’s goals.

If you are going to retire some day you need a plan. We are well qualified to review your situation and help you lay out an achievable plan for the future.

Church Pickard Online: is an outstanding new part of our commitment to providing fast, efficient, and innovative solutions to business.

Winning Team

John Annesley
B. A., C.A. Partner

Grant McDonald
B. Sc., C.A. Partner

Lorana LaPorte
B. Comm., C.A., C.F.P. Partner

Lee-Anne Harrison
B.Sc., C.A. Audit Manager

Erin Macrae
B.A., C.A. Associate

Lilia Riabets
C.G.A. Associate

Peter Sinclair
Accounting Supervisor

Anna Owens
B.A., Articling Accountant

Kevin Jones
B.A., Articling Accountant

Sarah Zubkowski
B.A., Articling Accountant

Paula Moscrip
B.A., Articling Accountant

Margaret Moore
Accounting Technician

Sharon Campbell
Accounting Technician

Wendy Huntingford
Administrative Assistant

Kathy Sabourin
Receptionist, Accounting Technician, Administrative Assistant

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