How much does one need to retire?
- Thread starter superstar_88
- Start date
I think there are a zillion calculators on the interwebs that will determine this for you if you just plug in your your circumstances and lifestyle. Google is your friend.
Depends where and what you want to do, where you want to live, whether you have kids/dependents, how much travel, etc. Also depends upon whether you want to deplete capital while in retirement or live on the income your capital earns.
My friends and I had this hypothetical discussion a few years ago and figured that if you live in Toronto, with eg: two kids still in University, and you want to be able to travel a few times a year, live in a decent neighbourhood, drive a decent car for as long as you can, have emergency funds for future assisted living/emergencies, boomerang kids, aging parents, grandchildren to spoil, with leftover to pass on when you kick the bucket - then including your house (which should be mortgage free) you need about $4 million - that was a round number just blurted out and agreed without much detail. That's to live a comfortable independent middle class retirement in Toronto leaving a nice inheritance for your kids or charity. YMMV. Obviously you can retire with a fraction of this depending upon your needs, location, etc. (Also - don't forget the hidden line items - like enough cash for hobbying for as long as you can get it up....)
Edit to add: The above is for a married couple retiring... much less needed if you're single.
My friends and I had this hypothetical discussion a few years ago and figured that if you live in Toronto, with eg: two kids still in University, and you want to be able to travel a few times a year, live in a decent neighbourhood, drive a decent car for as long as you can, have emergency funds for future assisted living/emergencies, boomerang kids, aging parents, grandchildren to spoil, with leftover to pass on when you kick the bucket - then including your house (which should be mortgage free) you need about $4 million - that was a round number just blurted out and agreed without much detail. That's to live a comfortable independent middle class retirement in Toronto leaving a nice inheritance for your kids or charity. YMMV. Obviously you can retire with a fraction of this depending upon your needs, location, etc. (Also - don't forget the hidden line items - like enough cash for hobbying for as long as you can get it up....)
Edit to add: The above is for a married couple retiring... much less needed if you're single.
Start by looking at the very basics. How much do you need to get by on a monthly basis with rent / mortgage / utilities / property taxes / hobbies / daily needs such as groceries, restaurants etc.
Then factor in other expenses such a car maintenance costs, house renovations, vacations on an annual basis. Let us say that these three major expenses work out at $12,000 on an annual basis. Then it would average at $1000 per month. Add it to the above monthly costs. That is what you need to claw back from your RRSPs, Pensions Plans, Investments on a monthly basis. It is then advisable to sit with your Financial Adviser who invested your RRSP / RPP funds, and work out how much you will be able to retrieve from your various Pension Funds funds based on all these Pensions and Investments. If you have a sizeable amount money in your bank accounts then factor that in as a top up. Accordingly, you can plan for your retirement lifestyle.
Then factor in other expenses such a car maintenance costs, house renovations, vacations on an annual basis. Let us say that these three major expenses work out at $12,000 on an annual basis. Then it would average at $1000 per month. Add it to the above monthly costs. That is what you need to claw back from your RRSPs, Pensions Plans, Investments on a monthly basis. It is then advisable to sit with your Financial Adviser who invested your RRSP / RPP funds, and work out how much you will be able to retrieve from your various Pension Funds funds based on all these Pensions and Investments. If you have a sizeable amount money in your bank accounts then factor that in as a top up. Accordingly, you can plan for your retirement lifestyle.
Those numbers may work if you live in North Overshoe, Saskatchewan. Not Toronto.
Use the 4% rule.
How much do you need to live on every year.
For example, if you want 10k a month divide 120k/4% and you get $3m
How much do you need to live on every year.
For example, if you want 10k a month divide 120k/4% and you get $3m
If at 65 you qualify for max CPP plus OAS you will receive $1754 per month or $21,048 per year. Definitely not enough to live on in Toronto that's for sure.
I think to comfortably live in this city you will need an annual income of at least $65,000. That means an additional $44,000 per year would be needed in other retirement savings.
Given that men live until about 81 years on average you are looking at 16 years of required savings. An annuity of $44,000 per year for 16 years at 3% growth rate would mean you would need to have about $565K in savings at retirement.
I think to comfortably live in this city you will need an annual income of at least $65,000. That means an additional $44,000 per year would be needed in other retirement savings.
Given that men live until about 81 years on average you are looking at 16 years of required savings. An annuity of $44,000 per year for 16 years at 3% growth rate would mean you would need to have about $565K in savings at retirement.
Remember we have trillium health plan . New knees etc are fully covered
The value of this hobby, if monies were set aside in the market to grow is very expensive . This hobby is going to fuck some TERBS up when they retire with far less than they could of had
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It really does depend on lifestyle choices. In planning mine I looked into various "alternative" lifestyles and their costs.
Mine isn't the cheapest. But cheaper than city living.
Overseas at least a good portion of the year is good. One I looked at was Thailand. Google living their and you will see why it's excellent for older expats.
Mine isn't the cheapest. But cheaper than city living.
Overseas at least a good portion of the year is good. One I looked at was Thailand. Google living their and you will see why it's excellent for older expats.
