1. How much annual income will you want in retirement? (Figure 70% of your current annual gross income just to maintain your current standard of living.)

2. Subtract the income that you expect to receive annually from:

• Government Benefits (The maximum CPP, OAS, GIS amounts to approximately $20,000 annually. To be conservative, you may assume you will receive 50% or less of maximum Government benefits.)

-

• Traditional Employer Pension Plan – a plan that pays a set dollar amount for life, where the dollar amount depends on salary and years of service (in today’s dollars)

-

• Part-time income

-

• Other

-

This is how much you will need to make up for each retirement year:

=

Calculations are based upon a real rate of return of 3% after inflation, assume you'll live to age 87, and you'll begin to receive income from Government Benefits at age 65.

3. To determine the amount that you will need to save, multiply the amount you need to make up by the factor below.

Age you expect to retire:

Your factor is:

21.0
18.9
16.4
13.6

4. If you expect to retire before age 65, multiply your Government Benefits from line 2 by the factor below:

+

Age you expect to retire:

Your factor is:

8.8
4.7

5. Multiply your savings to date by the factor below (include money accumulated in an RRSP or similar retirement plan).

-

If you want to retire in:

Your factor is

1.3
1.6
1.8
2.1
2.4
2.8
3.3

Total additional savings needed at retirement:

=

Don’t panic.  Accountants devised another formula to show how much to save each year in order to reach your goal amount. They factor in compounding. That’s where your money not only makes interest, your interest starts making interest as well, creating a snow ball effect.

6. To determine that annual amount you’ll need to save, multiply the TOTAL amount by the factor below.

=

If you want to retire in:

Your factor is:

.085
.052
.036
.027
.020
.016
.013

See? It’s not impossible or particularly painful. It just takes planning, and the sooner you start, the better off you’ll be.

The retirement planner is for illustrative and educational purposes only. The factors used in the planner result from assumptions made as to market performance and rates of return that may not be accurate. As there are several ways to conduct a financial review you should not rely solely on the Planner and should seek investment advice from a registered representative prior to investing in any securities.