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Retirement
income needs
Many financial advisors recommend that a comfortable
retirement requires a retirement income of 60% to 80% of
pre-retirement employment income. However, that percentage
can be lower depending on how you spend your money. Figuring
out what expenditures you will and won’t have during retirement
will help you plan and be prepared for the future. One of the
unknowns in planning is future increases in the cost of living.
Your pension from the OPSEU Pension Trust is indexed for
inflation so you know that it will not depreciate.
Preparing detailed lists of your expenses and your income will
help you form a clear picture of your financial status. What
percentage of your current employment income do you estimate
as your retirement income? Will it be enough to pay your
expenses and still have money for discretionary items? Will you
need to find an alternate source of income during retirement,
such as a part-time job? Will your spouse be contributing to your
household income? Do you have potential income from RRSPs or
an inheritance? Once you have your personal “balance sheet”
you can use it as a basis for planning.
Your estimated expenses at retirement:
If you have a spouse, all these calculations should include your
spouse's expenses and income. This is simply a starting point for
determining your financial picture at retirement. By starting the
exercise of examining your financial health before retirement,
you can take the necessary steps to either increase your savings
for retirement or adjust your lifestyle. A certified financial
planner can help you do a thorough analysis of your financial situation
and help you with planning for retirement. Some community agencies
offer retirement planning courses.
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