Previous blogs addressed the fact that pension plans are underfunded and our Old Age Security is in jeopardy. Worse still, chances of winning a lottery are 1 in 13.9 million. So much for that back-up plan!
But there’s good news.
Most Canadians already make annual contributions to RRSPs. Plus, we earn a sufficient enough income to make those contributions while still maintaining a good lifestyle.
We’re accustomed to putting away money for food and shelter. So my suggestion is to add a bit more to that routine. It isn’t a dramatic shift. Yet, ultimately, you can end up with an impressive retirement paycheque.
Generally, you need about 70% to 85% of your current income to enjoy a comfortable future (conditional on life expectancy and whether your mortgage and debts are paid off). So, depending how far you are from retirement, saving just 10% – 15% of your income could help you reach your goals in time.
According to Stats Canada, the average Canadian household spends nearly $4,000 on recreation, not to mention about $1,500 on tobacco and alcohol. Let’s be honest, cutting back here and there is very doable.
Besides, imagine all the recreation you can enjoy when you have free time and big, fat retirement paycheque. Come in for a consultation and we’ll help you get there.