Get Started
Client Login

Blogs

What does retirement look like for you?

Primary

Far too many people label retirement as ‘not working.’ In many cases, that might be true but that surely isn’t the whole story. We like to think of retirement as doing what you want, when you want, and with whom you want. For some people that means working part-time because they love what they do and don’t want to give it up, for others it may mean traveling around the world with their loved ones. One question that we get asked a lot is, ‘How much do I need to retire comfortably and live free?’

How much do I need to retire comfortably?

To answer this question, we need to first look at what retirement looks like for you and your family. Some people know exactly what they want to do in retirement, some don’t. If you are in the same boat as most and are trying to figure out what your retirement looks like, here is a thought, to clear the picture. When you introduce yourself, what do you talk about? Do you describe yourself with the work you do, or the activities you do outside work? Some describe themselves as globe trotters if traveling is your thing. Finding a passion is key. Retirement planning is not just planning for your ‘grocery bills.’

Now obviously money plays a major role in deciding if you are ready for retirement. So here are some rules of thumb that could help with your decision-making process. Let’s take an example of a couple, Jessie and Kerry. Let’s assume their household income is $100,000 a year. Combined, they have about $2 million in their investments.

4% Withdrawal rate:

If you can live off 4% of your portfolio size, you can comfortably retire. In the example of Jessie and Kerry, if they can comfortably survive on $80,000 a year of retirement income, they are ready to retire.

80% Income Replacement Rule:

If you are still figuring out what retirement looks like for you, a safer assumption is to see if you can replace at least 80% of your current income. For Jessie and Kerry, the 80% rule would mean $80,000 a year of retirement income. In most cases, we like to plan to replace 100% of your current income. Mainly because you will have more time to spend that money in retirement.

Having a cash wedge:

This one is geared more towards structuring your portfolio closer and in retirement. When you are closer to retirement, it’s a good plan to have at least 2-3 years of your retirement income in short-term, and safer investments. For Jessie and Kerry, that amount is $240,000. The rest of the portfolio is invested with a more long-term approach. This short-term portion of your portfolio is essentially called a cash wedge.

Planning for your retirement could be overwhelming. Make sure you have the right people in place that are helping you plan for your future and take the burden off of you. Click here to schedule a free 30-minute consultation.

 - Jai Gandhi, Licensed Assistant

Jai Gandhi is a Licensed Assistant at Endeavour Wealth Management with iA Private Wealth, an award-winning office as recognized by the Carson Group. Endeavour Wealth Management provides comprehensive wealth management planning for business owners, professionals and individual families.

This information has been prepared by Jai Gandhi who is a Licensed Assistant for iA Private Wealth and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offeror solicitation to buy or sell any of the securities mentioned. The information contained here in may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces in which they are registered.

Categories

Recent Blogs View All >

Stop Celebrating Tax Refunds: Why It's Not a Win for Canadians

Here’s the scoop: Getting a tax refund essentially means you gave the government an interest-free loan!Think of what you could have...

May 21, 2024

Turn Your Portfolio Into A Monthly Payday

Would you like an extra payday every month, without needing to find another job or work any additional hours? It is probably safe to say most...

May 13, 2024

Capital Gains Inclusion Rate Changes Impacting Canadian Businesses & Professional Corporations

In the wake of the 2024 Federal Budget, Canadian business owners and incorporated professionals are bracing for significant shifts in the taxation...

May 6, 2024

Free GuidesView All >

Living Financially Free

Download your free guide to financial freedom.

Is Your Retirement Protected?

Download our free guide to learn how best to protect yourself, your family, and your retirement.

The Power Of The Personal Pension Plan

Download your free guide to learn how you can protect your retirement savings with a Personal Pension Plan.

4 Mistakes People Make With Their First Million

Download your free guide to learn how to ensure your portfolio and plan stay on track.

3 Methods To Not Run Out Of Money

Download your free guide to help ensure you don’t run out of money.

want to achieve YOUR FINANCIAL goals?