A good place to start when it comes to predicting your retirement needs is to estimating your retirement needs and pinpoint those that are related to your work and will drop when you retire, such as clothing, eating out and gas, etc.
Also take into account any major debts, such as your mortgage. Will those be paid off by the time you retire? Or are you thinking of downsizing to a smaller house or moving into a retirement home? Decisions like these can have certain impacts on your expenses.
This is an important aspect to consider. If your retirement were to stretch to thirty years, would you have enough money to live on? By putting off your retirement for another five years, your savings would only have to last you for twenty-five years, and you’d earn an extra five years of salary. This could make all the difference in your budget.
Preparing for retirement: questions to ask your advisor
Did you know that more than one in five Canadians are close to retirement? This means that 22% of Canada's population is currently aged 55 to 64. Never before has this number been so high.
When planning for retirement, think about various scenarios that could affect your income, such as:
Try to assess the impact these kinds of events would have on your finances. This can help you to build up a realistic emergency fund for your retirement. Take this opportunity as well to check whether your life insurance and disability or critical illness insurance is sufficient for your needs.
Your goals, your health and your financial situation will all change as the years go by. The closer you get to retirement, the clearer your needs will become. It is therefore important to review your retirement plan from time to time to make sure you’re on the right track.