Did you know that over 1 out of 5 people (21.8%) of working age in Canada is close to retirement, between 55 and 64 years of age?1 This number has never been so high. Retirement is a major life event that results in concerns and preparation.
Concerns about retirement
Here are the 3 main concerns of Canadians age 55 and over:2
- Have enough savings (36%)
- Maintain their standard of living (31%)
- Impact of inflation (34%)
Where to begin?
Assess your income sources, assets and debts. The amounts you will have available for retirement may come from different sources, such as public pension plans, private pension plans and personal savings. If you currently have debts, here is an interesting article that can help you prioritize between paying down and saving for retirement.
Determine the approximate age at which you wish to retire. This step is essential, because it will determine the amount you must save to maintain your lifestyle in retirement.
Calculate the savings you will need. The experts estimate that to maintain the same standard of living, you must provide for an income equivalent to about 70% of the gross salary you had before your retirement. The key to success to achieve this goal is to start saving soon and make a budget. To establish your budget, you must identify your fixed expenses and ask yourself about your retirement goals. Do you want to travel, go on several excursions…? These are all important factors to consider.
The key to success is to contact an advisor who will guide you in preparing a personalized retirement plan that reflects you image and ambitions.
Working life vs. retirement period: plan your disbursements
People who retire at age 55 is likely to have a retirement almost as long as their working life on the job market!
In this situation, it is especially important that a disbursement plan be part of your retirement plan that accounts for your life goals and your particular situation. Because government benefits are unavailable before age 60, all of your retirement income will have to come from your personal savings (RRSP, TFSA, pension fund). Don’t hesitate to contact an advisor to help you establish a retirement plan based on your needs.
Have enough savings
How much money must you have for retirement? The answer to this question is different for each person. It all depends on your standard of living, your financial commitments, your goals and the age when you will retire. Use the Retirement Calculator to help you know how much money you must save for your retirement. Canadians retire around age 64 on the average3. With the assistance of this article, determine the best time to retire based on your different income sources.
Maintain their standard of living
You planned your savings to benefit from your retirement, but what about your life insurance coverage? Term life insurance is an advantageous solution to meet your need for coverage. It lets you protect the financial health of your loved ones based on your specific needs, at a lower cost. Read this article to learn the reasons to opt for term life insurance. Maintaining your standard of living in retirement can be a challenge for some. See these tips to achieve your retirement goals!
What about you?
Are you part of the 53% of Canadians age 55 and over who have a retirement plan?4 To find out if you are ready for retirement, answer this questionnaire, which will help you ask yourself the right questions
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1Source: Statistics Canada, The Daily, April 2022
2Source:: Statistics Canada, The Daily, April 2022
3Source: Statistics Canada, 2002-07-01
4Source: RBC, 2022 Financial Independence in Retirement Poll