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Retirement

How do you picture your retirement?

In January and February people start thinking about saving for their retirement due to a looming deadline. If you put money into your Registered Retirement Savings Plan by the end of February, you can deduct that amount from your income and as a result pay less taxes.

Unfortunately, many people make RRSP contributions due to the tax deadline without looking at the bigger picture. Retirement planning is not necessarily about beating the taxman in the short term, it is mostly about meeting long term retirement goals.

Do you know what your desired retirement lifestyle will cost, and therefore how much money you will need in retirement?

Using data from Statistics Canada, the Investor Education Fund (www.investored.ca) offers a list of retirement lifestyles and the average income needed to support those lifestyles. If you live in a big city, your income may need to be in the higher range to maintain that lifestyle.

  1. Happy Homebodies. These folks stay home most of the time and their needs are very simple. ($27,100 - $42,200)
  2. Home entertainers. Similar to the homebodies, but these folks spend more money on home entertainment such as movies and computer games. ($32,400 - $47,600)
  3. Social butterflies. Costs for social butterflies can be high if they go out a lot but can also be controlled if they entertain in their homes.($32,700 - $54,000)
  4. Super shoppers. These retirees spend most of their free time in stores although they may not buy much. ($37,000 - $54,000)
  5. Active seniors. These people are always busy with hobbies. Costs can depend on the type of hobby they have. ($38,900 - $61,500)
  6. Community-minded. These are active volunteers that may have higher transportation and social expenses. ($31,100 - $58,900)
  7. Travelers. Travelers’ budgets can vary dramatically. (Varies)
  8. Worker bees. Still working, these seniors have the highest incomes but also have the costs of being employed. ($52,800 – $73,900)

The key to a successful retirement plan is working with an experienced financial advisor to set your retirement lifestyle goals, develop a plan to meet those goals and then work with you along the way to ensure you are on track to achieve the retirement you desire.



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