At age 40, how much should the average person have in their retirement account?

[LordLoki]

The posted cpi rates and the actual will vary greatly in about 15-20 years. People on fixed income will suffer, due to the face that the system is somewhat broken.

I would say if you are 45 and need to retire today, you'll need about 1.5-2.5 million if you want to live till 85 without worrying.

Defined benefit plans are flawed. a few years of double digit inflation after you retire will reduce them to a bread and water existence.

I think the OP asked at 40 thought. I you do not have a million in assets by 40 you face a very restrictive life style after you retire.

 

[GG2]

We need to retire the word 'retire' as it applies to the average North American. Most North Americans are going work until they drop dead, and you're most likely one of them. Don't kid yourself. It's a new bold badass world out there.

If you want to have enough money to retire, you need to do something like own a successful Escort agency.

 

[Mencken]

Back to the original question, what can I do to increase my retirement savings as I apparently need at least a million? What else should I be doing?

Seems like you are on track to a possible million by age 60 if you continue to contribute to savings (tax sheltered and not)...in any case with a DB plan at 50% of your salary (assuming also it is indexed) you won't need much from your savings anyway. By the time you retire your expenses may be somewhat lower...if you are married you can split your pension income so your income tax will go down a lot...you will no longer be contributing to your pension plan or CPP (unless you choose to continue CPP contributions), etc.

So basically...don't sweat it. Invest as best you can and enjoy

 

[nottyboi]

I am very suspicious of DB pension plans ..or any pension plan for that matter. We have seen so many cases where companies or even now municipalities are cutting benefits AFTER people have retired. The problem is... people are living too long. My inner conspiracy theorist wonder if all these ED drugs were developed do that old people would start having sex and die from heart attacks... not a bad way to go IMHO, much better then rotting in some retirement home. I'm not sure what the value of a pension is...I'm a few years older and have about $300K and a fully paid house.. but no pension. Do you have kids or any other major liabilities?

 

[HentaiRanger]

I am very suspicious of DB pension plans ..or any pension plan for that matter. We have seen so many cases where companies or even now municipalities are cutting benefits AFTER people have retired. The problem is... people are living too long. My inner conspiracy theorist wonder if all these ED drugs were developed do that old people would start having sex and die from heart attacks... not a bad way to go IMHO, much better then rotting in some retirement home. I'm not sure what the value of a pension is...I'm a few years older and have about $300K and a fully paid house.. but no pension. Do you have kids or any other major liabilities?

I would burn through 300 k 10-11 years not including inflation and increased cost of living.

Preset ally, I would prefer dropping dead on the job Asian business man style, samaurai seppuku or shotgun to the head than retiring and spend ding up being put in a nursing home by any ungrateful children I may have in the future. ^_^

 

[bazokajoe]

I started putting away for my retirement at 20 years old, and now will have almost $200,000 squirrelled away at age 40. If I work to 60 years old, I will recieve a defined benefit pension equal to 50% of my income.

Am I saving enough? I live a modest life for the most part except for hobbying.

Thats pretty good.Most people don't have 200,000 at age 60.If you going to get a DB pension I would say stay the course and keep saving.
Unfortanatly alot of companies are trying to get rid of DB pensions,so keep saving.
Only advice I would suggest is max out your TFSA instead of your RRSP so you don't get such a huge tax hit when your retired

 

[Mencken]

I might be worried about a DB plan with some companies, but many DB plans are well funded and backed by Corporations or government guaranteed in some fashion. Situations like Nortel are the exception. Of course if you're worried about plans failing then a defined contribution plan is, or should be, safer. The money is actually contributed and held in trust for the employee. They're not considered as generous in today's economy...but at other times they have performed much better than Defined Benefit plans.

 

[evilbaga]

Depends on how healthy you are...

 

[Steve~]

I have a townhouse I paid $300,000 for. I owe about $200,000.

So your really paid $100,000 for that house. And that came from the bank right?

 

[nottyboi]

I would burn through 300 k 10-11 years not including inflation and increased cost of living.

Preset ally, I would prefer dropping dead on the job Asian business man style, samaurai seppuku or shotgun to the head than retiring and spend ding up being put in a nursing home by any ungrateful children I may have in the future. ^_^

Yes I know 300K is not enough... but add to that a house that is worth about 550K and it opens up some interesting overseas retirement options... and I am still accumulating + I will get CPP and OAS...

 

[HentaiRanger]

Yes I know 300K is not enough... but add to that a house that is worth about 550K and it opens up some interesting overseas retirement options... and I am still accumulating + I will get CPP and OAS...

My co-workers can go back home to the Philippines, south america or the Caribbean.

As for me I'll be counting on some inheritance from my grandather and my parents will be living off CPP and me.

 

[wyngarde]

$ 5 million

 

[poorboy]

So your really paid $100,000 for that house. And that came from the bank right?

I have $100,000 paid off, so owe about $200,000.