The Magic Number - Do You Have Enough Money to Retire?€¦ · How much money do you need to...
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your lifestyle during retirement on about 70% of that or $49,000. You first need to look at your sources of retirement income. Government benefits (CPP and OAS) will make up a third of that total with the remaining two thirds coming from you. Others suggest you can get by with 50% pre-retirement income. But in this case, you must be debt free and not have expensive hobbies. Remember, there’s no magic number for retirement savings. Sherry Cooper, chief economist at BMO Nesbitt Burns offers this method to determine how much capital you need to retire. First decide on your annual retirement income amount. Deduct from that the amount you will receive from government and corporate (if applicable) pension plans. That will leave you with a savings shortfall. If your goal is to be penniless at age 90, Cooper suggests you will need 15 times the shortfall as a capital base at retirement. Sherry Cooper’s rule of thumb is based on a few assumptions - you retire at age 65, live to age 90, earn an average of eight percent on your investments (before inflation), and inflation will be three percent a year during your retirement. If the answer as to how much you need to retire was an easy one, there wouldn’t be an abundance of literature and retirement calculators offering advice and analysis. The answer will depend on the lifestyle you want to live in retirement, family situation, amount of money you want to leave for your estate and other considerations. One thing is for sure, the earlier in life you start saving, and the more often you save, the faster your nest egg will grow and your chances of meeting your retirement goals will be enhanced. The Magic Number - Do You Have Enough Money to Retire? Is it $1 million, $2 million or maybe its $5 million? How much money do you need to retire? We s it $1 m Is Is i million, ink about retirement, usually more often as we get older. Maybe we have it backwards. We bout r all think ab hink ab all th etirem should start thinking about retirement earlier and equally as important, create a financial strategy ing a think d start out r to get us there. ere. There are some very alarming statistics about people saving for retirement. According to a study stat min ry a cs a published in the U.S. by Forrester Research, 40 % of baby boomers between the ages of 41 and r R rre by rch 50 have not initiated any financial planning for retirement. an cia y fi g fo ad h , l r n ee ng m men buy 40’s y ecure w The Magic Number – Do You Have Enough Money to Retire? was authored by Sloan Levett. Sloanis the Director of the Fuller Landau Private Wealth Advisory Group, Inc. To contact Sloan directly, please call (416) 645-6581 or email slevett@fullerlandau.com. Enhancing Business Value Personal Tax Planning and Compliance Assurance/Tax Planning and Compliance Realizing Value: Succession/ Exit Strategies Increase Personal Net Worth Wealth Management/ Investment Advisory
Transcript of The Magic Number - Do You Have Enough Money to Retire?€¦ · How much money do you need to...
your lifestyle during retirement on about 70% of that or $49,000. You first need to look at your sources of retirement income. Government benefits (CPP and OAS) will make up a third of that total with the remaining two thirds coming from you. Others suggest you can get by with 50% pre-retirement income. But in this case, you must be debt free and not have expensive hobbies.
Remember, there’s no magic number for retirement savings. Sherry Cooper, chief economist at BMO Nesbitt Burns offers this method to determine how much capital you need to retire. First decide on your annual retirement income amount. Deduct from that the amount you will receive from government and corporate (if applicable) pension plans. That will leave you with a savings shortfall. If your goal is to be penniless at age 90, Cooper suggests you will need 15 times the shortfall as a capital base at retirement. Sherry Cooper’s rule of thumb is based on a few assumptions - you retire at age 65, live to age 90, earn an average of eight percent on your investments (before inflation), and inflation will be three percent a year during your retirement.
If the answer as to how much you need to retire was an easy one, there wouldn’t be an abundance of literature and retirement calculators offering advice and analysis. The answer will depend on the lifestyle you want to live in retirement, family situation, amount of money you want to leave for your estate and other considerations. One thing is for sure, the earlier in life you start saving, and the more often you save, the faster your nest egg will grow and your chances of meeting your retirement goals will be enhanced.
The Magic Number - Do YouHave Enough Money to Retire?Is it $1 million, $2 million or maybe its $5 million? How much money do you need to retire? We s it $1 mIs Is i million,
ink about retirement, usually more often as we get older. Maybe we have it backwards. We bout rall think abhink aball th etiremshould start thinking about retirement earlier and equally as important, create a financial strategy ing athinkd start out rto get us there.ere.
There are some very alarming statistics about people saving for retirement. According to a study statminry a cs apublished in the U.S. by Forrester Research, 40 % of baby boomers between the ages of 41 and r Rrreby rch50 have not initiated any financial planning for retirement. anciay fi g fo
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The Magic Number – Do You Have Enough Money to Retire? was authored by Sloan Levett. Sloan is the Director of the FullerLandau Private Wealth Advisory Group, Inc. To contact Sloan directly, please call (416) 645-6581 or email [email protected].
EnhancingBusiness
Value
Personal TaxPlanning andCompliance
Assurance/Tax Planningand Compliance
Realizing Value:Succession/
Exit Strategies
IncreasePersonal
Net Worth
Wealth Management/Investment Advisory
