Helpful tools to help you figure out how much do you need for retirement

We are hoping that after you read the last retirement post, you did some soul-searching and started to plan your road map to retirement. That’s great!! If you missed the last post or haven’t done the homework, that’s fine too. Keep reading and learn about some great online tools you can leverage to help you start saving for the future:

Fiscal Agents

This website has a lot of different planners and tools you can leverage. The tool Tolga used was, “How much should you be saving for retirement?” under the retirement planning section. Check it out here:

http://www.fiscalagents.com/toolbox/index.shtml#tb2

This fairly easy to use tool calculates how much you need to retire, based on general information you provide. You need to have access to your current finances in order to have an accurate estimate. For Tolga, he would need to save $3 million dollars by 2049 if we wanted our ideal annual income for retirement. Crazy huh?? So we might need to rethink our retirement plans and cut back a bit. Next, it looks at your current savings and provides a nice report on how much you need to start saving annually to get to your target. Even prints out on a nice one pager. J

You can determine if that target is possible for you or not and start planning on making it happen.

ESPlannerBASIC

This next online tool allows to look into the future. It calculates how much you will have when you retire and what your spending and savings will look like.  It is not as user friendly as the previous online tool, but it is worth the work:

http://canada.esplanner.com/ESPlannerBasic/family-info

Once you have gone through and entered everything, you will have a wealth of information at your fingertips. Our first piece of advice; don’t stop after reading the Overview. There are other tabs in the “annual results” link that is on the left hand side. In that section it gives you suggestions on what your annual discretionary spending should look like, how much you should save each year and what insurance coverage you need. Note that you don’t need a ton or any life insurance the later you are in life, which is contrary to what most people think and the insurance industry wants you to do.

The “Total Spending” & “Total Income” tabs (along the top) shows you what retirement could look like until you’re 100 years old.  It highlights:

  1. How much income you need to make before you retire
  2. What you will receive from the government
  3. How much you need in your RRSP to sustain your preferred retirement lifestyle

Lastly, the “Net Worth” tab highlights various levels of financial worth at varying ages. It shows your current net worth, your net worth at retirement and how much you might have left to leave to your kids. What’s even better is you can export all of this great information into Excel for future reference. Excel for the win!

There is one thing to keep in mind about this assessment. It assumes that your retirement income will stay the same because your current standard of living will not change. Meaning, if you change your standard of living for the better (go you go!) or worst (life can be a bitch) then this assessment won’t take that into consideration. It assumes you’ll maintain your current lifestyle until and into your retirement.

This online tool made a lot of sense and gave us some good insight. Obviously, it is only as good as the information you put in. Do take the time to fill it out properly otherwise it won’t be useful. We don’t think it can replace the prudent planning that you or your potential financial advisor will put into your retirement planning but it is a great starting point.

Government of Canada

https://srv111.services.gc.ca/generalinformation/index

Another simple yet effective online retirement savings tool. It shows you how much your savings, pension, government benefits, etc add up to your goal or what kind of sort fall you might have.

The biggest issue is it doesn’t tell you or guide you on what to do to close that gap. But I do love the feature of how it graphically shows you how much income you will get from each source.

To help fill out the tool here are a few things:

Overall, you need a combination of savings and pension to help you through retirement. Like everything else, you need to plan and set goals. If you want your current lifestyle to echo into retirement, you need to have the appropriate funds to pay for the lifestyle.

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