Are you saving enough for retirement?

84043_optMost Canadians do not know how much money they’ll need to save to maintain their desired standard of living in retirement. Fortunately, there are resources online that will help you work that out and make concrete plans to achieve it.

How much money you will need depends on several factors, including when you plan to retire, your goals for your retirement years, your spending before and after retirement, debt and inflation.

A man aged 65 today can expect to live to 84, and a woman to 87. It’s important to take this time span into account when making retirement plans.

Most people will spend less when retired than when working. Whether you still have debt, downsize your home, move to another community, travel or save for your grandchildren’s education are just a few of the factors that affect spending levels after retirement.

Traveling or living in another country after retirement can affect spending, as well as taxation and your health and pension benefits.

Health emergencies and other unexpected events can also have major impacts. While many of us find it difficult to think about the idea that we may need long-term care when we get older, it’s essential to plan for that possibility because it can be very costly.

You also need to estimate your income in retirement. Most Canadians will receive income from a variety of pension plans. These include government pensions, employer pensions and Registered Retirement Savings Plans (RRSPs). Personal savings and investments are also important parts of retirement plans. In addition, many Canadians choose to work and earn income after retiring. This can affect pensions, other benefits and taxes.

A good place to start assessing what you’ll need is on the website of the Financial Consumer Agency of Canada: See the header: Planning Your Retirement.

The Living in Retirement section guides readers through: budgeting; benefits and discounts available to retired people; options for travel, work and housing; protecting against financial abuse and fraud; loss of independence; and other aspects of retirement.

Once you have figured out your goals, plans and contingencies, you can use the Financial Goal Calculator to work out how much money you’ll need to save or invest.

Other resources are available on the Canadian Financial Literacy Database where you can search for Retirement and Pensions.

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