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Here is a Sample Report to find out if "Joe Sample" is on track for his Retirement
Meet Joe, he is 45 years old he is planning to retire when he is 67.
Married and has 2 children that will leave his house in approx 4 years.
His current income is $50,000 per year and gets a 2% increase each year.
He is currently receiving a 4% annual return on his bank held RRSPs.
He currently has $60,000 in RRSPs and deposits 5% of income or $2500 additional per year.
Current inflation rate is 2.4% annually
They think they can live on $3000.00 Net total per month when retired
He wants his Money to last 25 years until age 92
Here is Joe's Report, he has 22 years left to accumulate savings, he will require at least an inflation adjusted return of $84,250 per year gross to match his expenses during retirement, this less taxes will give him the funds he requires to retire.
CPP (Canada Pension Plan) if still around will kick in an additional $7552 annually (todays rate, average for 2016) this will go up 1% per year to match the average CPI (Consumer Price Index)
RESULT:
Joe will be short by $1,380,665 dollars, without additional savings his savings will only last him 4.6 years during retirement.
Additional annual savings to meet goals would be $33,514. This would be hard to attain I think.
Suggestions for Joe,
-Highly suggested to transfer existing savings to a proper RRSP /TFSA Guaranteed Investment Funds. The average for Guaranteed Investment Funds has been 11.8% since 1961. Only available from a Broker. There are 34 companies in Canada that offer these, rather than contacting each company to find out what their rates are...
It is far better to talk to one corporation that has access to all of them (Advisor & Co is one such corporation)
-He should Max out TFSA for both spouse and himself, this will eliminate taxation on withdrawals, also they will still qualify for OAS (old Age Supplement) and he will not have any clawbacks from his CPP. (if still around)
Lets look at the same senario only changing where he invests his current and future RRSP / TFSAs
Just by changing where he put his savings Joe now will never run out of money. In fact he has over contributed by $130,802, and could cut his current saving in half to $1,250 per year instead of $2,500.
He now is very secure, and has guarantees in place so he can not suffer any losses
Contact one of our team member today!
Advisor & Co
Saskatoon PH: 1-306-292-3734
Toll Free: 1-877-888-9403
Email:Advisor-co@sasktel.net