‘Is a million dollars enough for us to retire if we maintain our current lifestyle?’

Is one million {dollars} sufficient for the 2 of us, each in our mid-50s, to retire on if we keep our present life-style and work till we’re 65? Our family revenue is at present $150,000. Is there a share of revenue you advocate as an annual financial savings objective till we attain that retirement age?

We requested Angela Fennelow, a CFP® and monetary planner at Sun Life and CEO of Fennelow Financial Solutions, to reply this one.

One million {dollars} invested to have a stability of progress and revenue in retirement is probably going sufficient to supply a snug month-to-month revenue for retirement starting at age 65, Ms. Fennelow mentioned. The extra you may have saved, she added, the extra selection and suppleness you should have while you start to attract out of your investments for revenue.

“Based on your current situation, try to save as much as you can in the most tax-efficient way now and for the future. RRSP contributions save you taxes now, and you then pay taxes later when withdrawn. Invest after-tax money into TFSAs now and that grows tax-free, and income drawn later is also tax-free.”

Ms. Fennelow famous that there are advantages to doing each, and a balanced method can work nicely.

Should just lately widowed Curtis, 55, draw from RRSPs earlier than tapping into taxable investments?

Old Age Security and Canada Pension Plan advantages additionally present month-to-month revenue for all times. It is necessary to know the way a lot you’ll obtain from every, she mentioned, and utilizing instruments resembling The Globe’s instruments and retirement calculator will help. “And it is different for each individual based on multiple factors. It may make sense to start receiving OAS and CPP benefits later, as you will receive higher payments,” she added.

Ms. Fennelow additionally suggested that having well being and life insurance coverage in place will present monetary safety, shield your financial savings and maintain your retirement revenue plan on monitor in unforeseeable circumstances.

As for the query of a share of annual financial savings objectives, she mentioned: “After the family budget expenses are paid each month, I ask clients how much is the most they can save with what is left and what do they want to set aside in short-term savings for vacations, hobbies and entertainment.” Ten per cent could also be a adequate begin at the start of your profession, she mentioned, however as you get nearer to retirement, amping it as much as 25 to 30 per cent could provide help to attain your objectives quicker.

Ms. Fennelow additionally really helpful utilizing this Sun Life chart on funding journeys as a result of it visualizes the life cycle of accumulating wealth and drawing revenue from that wealth over time.

“Once you have your desired retirement income determined, you can take a closer look at your current situation with your adviser to see where you are in relation to your income goal and if you need to save more.”

If it’s inexpensive to maintain saving between now and your final day of labor, think about amping up and utilizing your tax-free financial savings account to extend this supply of tax-free revenue in retirement. The extra you may have accessible in retirement, the extra flexibility you may have.

Do you need recommendation on a monetary planning or retirement difficulty that’s affecting you? Send us an e-mail.