Ever wonder where the money for your retirement will come from, and how you’ll be able to have sufficient income to maintain a comfortable standard of living?
You should be able to draw on several sources of income.
First, public plans will provide you, under certain conditions, a basic amount.
This amount will depend on a few things, including your average yearly income prior to retirement.
For example, for an average annual income of $70,000, you can expect your pension benefits to be equal to about 30% of that amount when you retire. For an average income of $40,000, you can expect around 40%.
The next portion of your retirement income will come from personal savings such as:
- your RRSP
- your TFSA
- your other investments
And last, but not least, your workplace savings program will round out the mix.
So how can you know if you’ll have enough for a comfortable retirement?
Perhaps you’ve heard the general rule that you’ll need 70% of your annual income. No one can predict the future, but the actual percentage can vary between 50% and 80%, depending on your lifestyle, your health and what you plan to do.
Another way of assessing your needs is to estimate your future expenses and work backwards from there to draw up a retirement budget.
Do you want to know how much you should be saving?
Use the On Target Retirement income calculator!
It calculates your future income and shows you how your choices will move you closer to or further away from your target.
Try out different scenarios, change some details and see the impact on your future retirement income.
Ready to design your future? Log on to www.dfs.ca/participant to use the On Target Retirement tool.