Furthermore,
How much money his retirement::
Difficult to assess how much money we will need for retirement. In addition, Some suggest a million dollars and others, the equivalent of 70% of the income of his working life. Nevertheless, In fact, none of these answers is correct!
According to a recent report by the American giant Fidelity. Similarly, people 45 and over believe they need $ 1,020,000 to experience a comfortable retirement. Furthermore, It was more than double than in 2005, while they touched rather on $ 447,000.
The famous myth of the million for retirement has a hard life. However, experts believe that this simplistic formula is exceeded, as well as that of 70% of gross income.
“In fact, there are as many possible plans as individuals. Moreover, Each situation is unique. requires a personalized approach, ”explains Justin Beaudoin, a financial planner, of the Jean-Maurice Vézina team, how much money his retirement: IG Private heritage management.
He believes that it is rather necessary to build a plan taking into account his own reality. “Several other factors must also be taken into account. such as inflation, the life expectancy that goes by increasing and the particular needs of each person,” says Mr. Beaudoin.
Rely on the budget
The planner recommends relying on a realistic budget and not on a universal percentage. “We start by listing the expenses planned for retirement, both common and occasional and leisure, gifts, etc. Then, we take stock of its various sources of retirement income, such as government pensions-RRQ, PSV-employer pension funds, investments, etc. ”, he lists.
Then it will be easier to determine the shortfall to support the desired retirement budget.
Tax planning
“Taxation plays a key role in retirement planning. For example. a dollar withdrawn from an RRSP does not have the same value as the same how much money his retirement: dollar withdrawn from another diet, such as Celi, “notes Justin Beaudoin. While the first is taxable. this is not the case of the second, and we could therefore save thousands of dollars.
The order and time of disbursement of its assets are just as crucial. One can also think of adopting optimization strategies such as the fractionation of retirement income. of reducing taxable income in order to be eligible for certain tax credits and socio-economic measures (solidarity, taxes, etc.).
“The financial planner will be able to simulate different scenarios that will maximize retirement income after taxes,” he said. He underlines that a financial plan which evolves according to his reality will also help to face the unforeseen events.
How much money his retirement:
Planning example
Widow alive alone, 55 years old.
Wishes to retire at 60, with a budget of $ 4,150 net per month (indexed to inflation at 2.1%) up how much money his retirement: to 80 years. Then, the amount will no longer be indexed to its 95th birthday (projected life expectancy).
Retired assets:
- Removated retirement account (CRI): $ 405. 000 (transfer of the pension fund to death of the spouse)
- The family: 65 000 $
- Return: 140 000 $
- Unregistered account: $ 120,000
Total asset value: $ 730,000
Retirement income:
- RRQ: $ 439 per month from 60 years
- Old age security pension (PSV): $ 877 per month from 65 years
Hypotheses:
- Projected net yield: 5.5%
- Indexing of expenses: 2.1%
- The client has no property. a rent is therefore to be expected in her budget
To maintain the target of retirement targeted, the budget should be revised downwards or delaying retirement of two years, at 62, in order to improve the RRQ and the PSV annuities. This last option how much money his retirement: was chosen.
A mixed disbursement strategy allows the cost of tax over time and reduce the tax burden.
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