Questions and answers about financial planning

Here are the most frequently asked questions about financial planning for retirement, and our answers.

At what age should I retire?

If you retire before age 60, you will not receive any income from public retirement plans. Starting at age 60, you will be entitled to a retirement pension from the Québec Pension Plan, if you have contributed sufficiently to the Plan. However, the amount of your pension will vary depending on your age: it will be reduced by 6% for each year preceding your 65th birthday for as long as the pension is paid. At age 65, you will also be eligible for an Old Age Security pension. Before deciding when you should retire, do some calculations! Need help? Use CompuPension or ask your financial planner.

How do I determine the income I will need at retirement?

When you retire, certain expenses will be reduced, in particular, those related to work (clothing, transportation, etc.) Other expenses could increase, depending on your interests and state of health. If you wish to maintain the same standard of living in retirement, you should think about what you would like to do and how much your projects will cost, based on your current budget. An even quicker method can also be used: according to the Régie, you will need approximately 70% of the average gross annual income that you earned the last 3 years that you worked to maintain the same standard of living in retirement. These 2 methods of calculating income needed at retirement, the budget method and the quick method, are both presented in our planning tool Planning your retirement in 5 steps.

Which should come first: my house or my RRSP?

You don't have to choose; both are possible! Do not wait until you have finished paying off your house before investing in an RRSP. The sooner you invest your money, the greater will be the returns. You can also use the income tax refund from your RRSP contribution to pay down your mortgage more rapidly. See our other planning recommendations.

How often should I contribute to my RRSP?

A contribution of 100 $ every month yields more than a single contribution of 1 200 $ at the end of the year. It is also more profitable to contribute each pay period or each week.