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How much is enough for your retirement?

To be sure that your retirement dreams aren’t sidelined due to a limited income for a limited number of years, you need a retirement income plan that works for you.

Here is an eight-step plan that helps ensure you’ll have the level of income you need to enjoy all your retirement years.

  1. Set the date: Decide when you want to retire. Each year of retirement means you’ll have one less year to save for retirement and one more to finance.
  2. Set your retirement lifestyle: The lifestyle you choose could be expensive – filled with travel or an expensive hobby – or staying close to home and family.
  3. Set the cost of your retirement: Once you know the shape of your retirement lifestyle, carefully assess the costs. Be sure to take into account the additional costs for health care that typically accompany aging.
  4. Set your income sources: Your retirement income will derive from personal savings, company pensions, your Registered Retirement Savings Plans, Tax-Free Savings Accounts and non-registered investments, as well as government sources including the Canada Pension Plan/Québec Pension Plan (CPP/QPP) and Old Age Security (OAS).
  5. Set the gap: Calculate the gap between your expenses and your income from all sources outside your personal retirement savings.
  6. Set your withdrawal requirements: Establish the level and frequency of income you will need via withdrawals from your registered and other income-producing investments. Keep in mind that your retirement could span 30 years or more.
  7. Re-set your strategy: If your expected withdrawal rate is not sustainable based on the projected returns from your current savings and investments, re-set your registered and non-registered portfolio with the aim of improving returns – or consider re-setting the scope of your retirement plans.

Whether your retirement is tomorrow or years away, you can avoid having your dreams ruined by income worries. Your professional advisor has strategies and solutions that will allow you to enjoy all your retirement years to the fullest.

Date reviewed: February 11, 2015

This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.