How Much Do I Really Need to Retire?

This blog post is sponsored by Nest Wealth. Read our advertiser disclosure.

Research proves time and time again just how stressful financial worry can be for Canadians. For many people, the thought of retirement is what causes the majority of the concern for their financial future.

A Canadian robo-advisor, Nest Wealth, surveyed a few hundred Canadians to understand saving habits when it comes to preparing for retirement. The results of the study were surprising. Despite knowing what savings vehicles were available to them, 71% of Canadians don’t know how much money to save for retirement*.

That begs the question that many Canadians ask themselves: How much do I really need to retire? Here are a few realistic figures we’ve put together to keep your retirement planning practical and attainable.

A Realistic Retirement Number

Although there isn’t one number that suits every person, there is a benchmark that was established during our research. One source says that the magic number for retirement savings is $756,000, according to a poll of Canadians**.

The same source explains that many Canadians aren’t sure if they’re saving enough to get to their retirement dream. Which is understandable because retirement for many is difficult to imagine. For those not near retirement, the idea of retiring can seem too far away to begin to plan for. But retirement planning is an essential part of retiring and planning towards a comfortable financial future. Think of it all as a process and while the first step might be setting a goal, the second step would be planning towards that goal in a realistic way. And what’s the third goal? Putting your retirement plan into action.

Have you thought about ways to maximize your RRSP contributions? Read about how to maximize your RRSP contribution with a personal loan.

Realistic Retirement Savings Targets

If you’re in the process of setting a goal for your retirement, you’ll want to also set target contributions to help you get there. You’ll want to come up with a realistic figure annually that lets you enjoy a life similar to the one you lived in your working years and then allocate a practical percentage of your pay to help you move towards your goal. Note that targets are based on many different and personal variables, like what you would define as wants versus needs as well as your residency, timeline, and savings.

To see how much you should set aside for your big retirement day, visit this retirement calculator to run your own numbers.

A Realistic Retirement Income

Based on Statistics Canada 2010 study, the average after-tax income of married elderly couples was $55,900. It’s likely that your retirement income will be constructed of your own personal savings throughout your working years in addition to a mix of government benefits like Canada Pension Plan (CPP) or Quebec Pension Plan and Old Age Security (OAS).

Nest Wealth is Canada’s digital wealth manager that offers some of the lowest management fees in the country. With sophisticated advice starting at just $20 a month, Nest Wealth helps Canadians reach their financial potential faster and with more wealth. To learn more about Nest Wealth and your investment opportunity, visit www.nestwealth.com.

Sources *Nest Wealth Survey (2018)

**https://business.financialpost.com/personal-finance/the-magic-number-for-retirement-savings-is-756000-according-to-poll-of-canadians

***This promotion is available only to new clients who open and submit transfer forms or fund their Nest Wealth account by March 1st, 2018.

To be eligible to receive a cash bonus of $500, open accounts must be funded and retain at least $150,000 for a minimum of 6 months. Accounts between $10,000 and $74,999 invested for a minimum of 6 months will receive a $100 cash bonus. Accounts between $75,000 and $149,999 invested for a minimum of 6 months will receive a $200 cash bonus. Cash bonuses are limited to one per household.

Nest Wealth Asset Management Inc. (“Nest Wealth”) is registered as a Portfolio Manager (“PM”) in AB, SK, BC, QC, MB, PE, NS, NB, NL and in ON as a PM, Exempt Market Dealer, and Investment Fund Manager. This offer and its terms and conditions are subject to change without notice.