- When do you want to retire?
- What are your government benefits?
- What are you spouse's government benefits?
- Are you in debt payed off or will you still have a mortgage?
|How much do you need to retire? How big should your retirement nest egg be? What will you spend during retirement?|
The table shows how much you need to retire at age 65. The size of your nest egg increases if you retire earlier.
Of course there is a lot of fine print associated with the nest egg table:
- Typical annual amounts in today’s dollars, assuming no traditional defined benefit employer pension. (2012 values ... add 5% for 2014)
- Spending before taxes, assuming the seniors own their own home mortgage-free.
- Assumes long careers at average wages, although these amounts are less than maximum benefits. Current maximum benefits per senior per year: OAS is $6,481 and CPP is $11,840 for a total of $18,321. You’ll get maximum CPP if you start CPP at age 65 and had worked for almost 40 years at average pay or better
- Provides for an annual withdrawal from the nest egg of 4% at retirement plus inflation adjustments. (The factor 25 equals 1 divided by 0.04.). There is a small chance that you may outlive your savings.
- Don’t count the value of your home equity or cottage. Canadians born after March 1958 will have the start of OAS payouts delayed and will need to compensate proportionately. If your start to OAS is delayed by two years to age 67, then you will need an extra $13,000 to offset that. Consider you home as extra security - you could use that equity with the HomEquity CHIP program, or the REIT and MIC alternatives in other posts.