Whether you’re self-employed, a business owner, or an employee of a company, to enjoy the retirement that you envision, you will likely need income above and beyond what CPP and OAS provide. The only way to truly know what you will need is to put together a retirement plan.

Successful retirement planning begins well before retirement. In fact, the earlier you start to plan, the higher the likelihood that you will achieve your goals. Your lifestyle in retirement is a very personal decision, so there is no rule of thumb that dictates how much you will need in order to retire comfortably.

Some say you will need a minimum of one million dollars to retire, while many professionals prefer the 80% rule – that you will spend approximately 80% of your current salary during each year of retirement. Whatever method you use to calculate how much you will need for retirement, it’s advisable that you start working toward that goal as soon as you can.

Retirement planning progresses through different stages:
1. Young adulthood (21-35 years) – During this stage, you may not have too much money free to invest, but you have all the time in the world to let investments grow, which is an essential part of retirement planning/saving.
2. Early midlife (36-50 years) – Midlife comes with numerous financial strains such as mortgages and credit card debt, but these years are also considered to be the best years for aggressive saving. Your earning potential is approaching its peak and you still have ample time for your investments to grow and compound.
3. Later midlife (50-65 years) – At this point, you should consider a more conservative approach with your investments. You have fewer years to retirement, so you want to protect your retirement savings against potential losses. Your earnings are now at their peak and you have paid off your mortgages and other debts, permitting you to save and invest larger sums of money.

Retirement planning encompasses far more than just saving.

A successful retirement plan includes the following 4 steps:
1. Visualize your retirement – How do you envision your retirement? That’s where you begin. Before you embark on a journey, you have to know your destination. Once you know how you want your retirement to look, you come up with a road map to get you there.
2. Review your current state – Where are you right now? You know your destination, now you need to know where you’re starting from. Then, you can map out a strategy to get you to your destination. 
3. Formulate and implement your plan – This is when you identify what you need to do in order to achieve your retirement goals? How much do you need to save each year? What rate of return do you need on your investments? What investments are appropriate for your risk appetite? How can I minimize the taxes that I pay?
4. Monitor your plan – As you move toward retirement, it is important to regularly review your progress to make sure that you’re on track with your plan. Are you saving enough? Are you getting the rate of return on your investments that you need? Have your retirement goals changed? 

We all want to have the retirement that we envision. Having a plan dramatically increases the likelihood that you will get there. It also removes the uncertainty of knowing if you’re on track to achieving your financial goals. This is what most of our clients are looking for – peace of mind.

If you’re seeking support or a second opinion on your planning strategies, we offer a complimentary and confidential review. My direct contact information is below. Let’s get together for coffee.


Lee A. Schaffer PFP® CIM® FCSI®
Direct: 905-764-5013 | Email: lee.schaffer@rbc.com
Vice President & Portfolio Manager | Schaffer Wealth Management | RBC Wealth Management | RBC Dominion Securities Inc.