Many individuals ask us: “How much money will I need in retirement?” The real answer is the amount of money you have saved is what you will have to live on, and your lifestyle will be determined by that. Sort of like the old ‘which came first: the chicken or the egg?’ puzzle. Your lifestyle will be determined by your savings, but your savings are often determined by your lifestyle!
To answer the question in another way, it can be helpful to use something called the Rule of 20. For the average Canadian, for every $1 of annual income you want to have in retirement you will need to have saved $20. So, if you need $1,000 per month (i.e.: $12,000 per year) you must save $240,000 by the time you retire. The numbers may seem intimidating, but working with a professional financial advisor to help you build and follow a plan, they are achievable.
For more information on the Rule of 20, please review the linked article and let us know if we should do a projection of where you are today and where you will likely be in the future. Our services include a breakdown of all your investments, projecting where you will be at and during retirement, and building a plan to get you the lifestyle you want to enjoy as simply and safely as possible.
Wishing you a great summer,