Everyone wants to live well in retirement. But how much money does it take?
A recent survey found that Canadians think they need an average of $4,000 in after-tax monthly income and around $800,000 in total savings to feel good about their financial future.
The real numbers depend on your lifestyle, goals, pension and more, but getting there takes a lot of planning – something that many of us need help with. Here are a few ideas to help you get started.
Consider what your retirement will look like
In order to plan for retirement, you need to have an idea of what your lifestyle will be. Do you plan to travel or become a snowbird? Will you downsize or remain in your home? Should your health decline, what type of care would you like to receive? These decisions aren’t always fun, but it’s important to think about them early.
Know your sources of retirement income
The survey found that many Canadians aren’t very familiar with other sources of retirement income, such as the Canada Pension Plan, Old Age Security and Tax-Free Savings Accounts.
Make sure you have a good understanding of all potential income options, and plan to draw income from multiple sources. You’ll then be in a better position to forecast how much you’ll need to save to achieve your desired lifestyle.
Work with a financial advisor now
Research has shown that those who use an advisor save more money, budget better, and ultimately meet their financial goals.
“A good advisor will help by asking those tough questions, educating you on your potential income sources and examining your holistic financial picture so you’re prepared for the future,” says Jack Courtney, vice president of advanced financial planning at IG Wealth Management.
It’s like anything. For example, if your furnace stopped working, you’d hire a heating professional. If you want to ensure you’re saving enough for retirement, work with a financial professional.
Find more on preparing for retirement at ig.ca.