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Saving for Retirement

Saving for Retirement

When it comes to their future retirement two of the biggest questions facing Canadians today are what will my income needs in retirement and how much will I have to save to meet those needs.

Income needs

The best approach is to develop a retirement budget by making a list of your expected expenditures and assigning a value to them. It is a time consuming task and many might not be up to it. The other difficulty is trying to develop a clear vision of what kind of lifestyle you might want to enjoy in retirement. This is particularly true for those who are still many years from retirement.

Savings goals

The second challenge is trying to determine how all your potential sources of income in retirement fit together. There are government benefits, pension plans, personal savings and part time work in retirement to consider.

Solutions

There are a variety of ways to address this challenge and answer the questions about income needs and savings requirements.

The first is to create a comprehensive financial plan that delves into all aspects of your personal finances and creates a roadmap for you to follow through your life. This may be overkill for some because the documents are long, complex and sometimes not easily understood. They should be reviewed annually and they are not inexpensive.

For the right person they are the ultimate solution but if your plan is just going to sit on a shelf and never updated, a comprehensive holds little value.

Another approach is to create a detailed retirement plan. These are also comprehensive in nature but the focus is limited to retirement planning. As a result the reports are usually shorter, often 10 – 12 pages in length with recommendations and reports that focus on your retirement needs and income.

The SmartPlanner from MoneyPages is an example of a detailed retirement plan.

A third solution is to work things out yourself. You can create your own excel spreadsheets or grab a pencil and paper. The challenge with this approach is that there are numerous variables that go into estimating your retirement finances. Completing all of the calculations with pen and paper or even with a spreadsheet can be a daunting task.

Our Solution

At MoneyPages we recognized that sometimes you may just want a reasonable estimate that you can determine quickly. As a complement to the SmartPlanner, MoneyPages has introduced the QuickPlanner.

It provides you with a suggested income in retirement that you can use in your calculations. If you are one of those users who already has an idea of what your income requirements might be, you can ignore the suggestion an input your own value.

From there you can input the rest of your financial data on one page and your progress to your eventual retirement is quickly calculated. The QuickPlanner will tell you if you have a savings surplus or shortfall and will provide you with a level of income in retirement that is sustainable.

From there you can determine if any significant changes should be made to your savings and investment strategies.

The QuickPlanner allows you to print off a one page report to keep for future reference.

If you find that the QuickPlanner does not go into enough detail you can take the next step and prepare a detailed retirement plan using the SmartPlanner. If that is still not enough detail, you still have the option of enlisting the services of a Certified Financial Planner who can create a detailed financial plan for you.

Both the QuickPlanner and the SmartPlanner are available on the MoneyPages website. The programs are free to use; there is no cost or registration required.

The important thing to remember that no matter what your needs are in terms of planning for your retirement, there are services and solutions available. Pick the ones that suit you best and get started on developing your own personalized plan.

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