How much money do you need for retirement?

Free online calculator to estimate you retirement budget.

Introduction


If you are, like me, subscribed to a whole bunch of personal finance and investment blogs, podcasts, newsletters, you probably see this question come up regularly. Worse still, when reading the list of comments that follow, people often expect to obtain a magic number, like $1,000,000, $40,000 per year, 70% of their last salary…! All assertions more outlandish than the others!

Fortunately, in the impressive flow of comments, a good number of very relevant questions end up standing out, such as:
  • How do you plan to spend your money during your retirement? Are you planning to travel around the world in luxury hotels? or simply spend most of your time reading a good book in your deck chair!
  • Will you receive government pensions? Do you have a RREGOP, a pension fund?
  • Will you continue to work during your retirement?
  • Will you have dependent children? dependent parents?
  • …

Let’s just say that there is no shortage of questions and we could go on for a long time!

Besides the fact that we should all ask ourselves these questions, one question that I have never seen brought up is the fact that our lives evolve, our life goals change, and that our Cost of Living or Retirement Need will probably not be the same at 50, 65, 80 or even 90!

As Morgan Housel said so well in his book: "The Psychology of Money"[1]: «Long-term financial planning is essential. But things change -- both the world around you, and your own goals and desires.»

If you are in your forties, like me, and you look into the past, there is a good chance that your needs, aspirations, life goals have evolved over time.

So why should this change during your retirement?

Last week, I read an article in La Presse by Marie-Eve Fournier : "Dépenser 9000 $ par mois… sans sortir;"[2]; (Spent $9000 a month...without going outside (free traduction)) an elderly person, living in an RPA, saw their rent increase, in a few years, from a little over $5,000 per month to $9,000! That comes to 111 000$ per year! This is obviously an extreme case, but including changing needs when developing your retirement plan is really important.
It's not because today I need $50,000 annually to live that this will always be the case.

So why limit yourself to a single number? to a percentage? to a simple annual amount?

A retirement budget should be the first step when creating your retirement plan; including different milestones in our future lives. Use our free retirement budget calculator to set your retirement budget.

Calculator

Results



I'm not a financial planner; the following is in no way investment advice and should not be taken as financial advice in any manner.

* The results presented below correspond to the sum of needs throughout the period; this value does not take into account tax aspects, pensions received during retirement, inflation, or the performance of your investments over time. Add your needs to your retirement simulations to take all these parameters into account.



My needs
$1,903,840*
$1,903,840* **

My needs including inflation
$3,147,236* **
$3,147,236* **

**Inflation rate used 2.2%


Save your results and create as many needs simulations as you want by creating an account for free on Serenity.
The needs calculator is a free tool, so you can follow the evolution of your needs over time and adjust it as needed.



Conclusion


Creating a retirement budget is the first step in retirement planning.
The next step consists of relating this budget to your investments, your pension funds, your taxation, etc. Without a good strategy, a retirement budget has very little meaning.

Import your retirement budget into your simulations and easily adjust your disbursement strategy using the Serenity. software.

Easily simulate your retirement disbursements with Serenity.
Create a free account and try it for 1 month for only $12.99.
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A financial planner is the best person who can build you a retirement plan that fits your situation; he should be able to present his strategy to you in a clear and concrete manner. Don't hesitate to ask him questions, that's what he's there for!

A good retirement plan is not just limited to a retirement budget, but to your entire situation, including investment, real estate, pension fund, taxation, etc. Start your retirement plan today with Serenity.

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References


Books :


  • [1] Housel, Morgan : The Psychology of money : timeless lessons on wealth, greed, and happiness ISBN :9780857199096; Hampshire, Great Britain : Harriman House, 2020; 242 pages.


Sites web :



Credit :