31 Mar The Retirement Crisis – 5 Considerations for Planning Effectively
In an ideal scenario, you start planning your retirement as early as your 20’s. For many Canadians; however, retirement planning has taken a backseat life’s other priorities. This oversight in planning has led to what some would call a retirement crisis.
According to a CIBC poll done in 2018, 32 percent of Canadians between 45 and 64 have nothing saved for retirement. Furthermore, the same poll illuminated that the average amount that Canadians save for retirement is only $184,000 and 19 percent of Canadian have saved less than $50,000.
Check out this video regarding the retirement crisis for a closer look at the financial gap for many Canadians.
Is this cause for concern? Perhaps. Relying solely on government pensions for your retirement could leave you feeling constrained in what are said to be your golden years.
As Canadians, we are fortunate that at retirement, many of us are eligible to receive government pensions such as Canada Pension Plan (CPP), Old Age Security (OAS), and for those who need it, Government Income Supplement (GIS).
The question then becomes how much do I need to save for my retirement?
It’s not a one size fits all conversation – every situation will be different. Consideration to whether you are living alone or as a couple, and also the lifestyle you would like to live when you retire will be factors in your retirement plan.
Consider these 5 questions as you plan for your future.
- Set your Retirement Goals – At what age and what type of lifestyle would you like to live?
- Current spending vs expected retirement spending – What are you spending money on today and what are you likely to spend your money on when you retire?
- Expect the unexpected, and plan for it – If your situation changes such as failing health or loss of a spouse, would your current plan be sufficient?
- Consider inflation – If butter costs $5 today, what will it cost 20 years from now?
- Government pensions – Will you be eligible to receive these pensions when you retire?
To learn more, connect with one of our Case Managers today.