Have you thought about your 80th birthday? Most people imagine having financial security by then, ready to retire and enjoy a stress-free lifestyle. However, have you considered the cost of that dream lifestyle goal? Retirement calculators can help you not only figure that out, but help you plan what you need to save today in order to reach that future retirement goal.
Use retirement calculators to foresee the probable amount that you will earn by the time you retire. Knowing how much money you’ll have at retirement age will help you set realistic plans for living expenses and let you know how much money you’ll have left over to spend on items for your enjoyment.
Planning to purchase a boat or car? Vacation cruise or travel? New house near a beach? There are many possibilities you can plan for, but in order to achieve those goals you’ll need to calculate how much you’ll be investing each year and setting aside for that retirement future.
Here are some important points you have to consider when using retirement calculators:
- Your current age and anticipated retirement age
- Life expectancy
- Inflation rate
- Current retirement savings you have
- Pension/CPP Disbursements
- Rate of ROI (return of investment) / Annual interest rate
These are just some of the factors to consider. Each will have an impact on your results. For example, the age numbers you enter into the retirement calculator will greatly affect the results because the available years from your current age up to your desired retirement age will determine the amount of savings you have to accumulate in order to reach your retirement goal. If you have lesser years to save, then your retirement calculator will tell you that to invest more money if you want to retire with a larger amount in your bank account to live off of.
When entering your “Rate of Return Of Investment,” be conservative and use a lower rate than what the current or even the best possible rate available might be, giving yourself a realistically achievable goal that takes into account market fluctuations.
Experiment with the different variable factors to see how they affect your results. Maybe an earlier retirement is a possible achievable goal for you, or maybe working an extra 2 or 3 years from your originally desired retirement age yields you greater results than expected.
Click here to use our retirement calculators.
Don’t depend on the tool alone. Always seek a certified financial planner to help walk you through each of the calculation steps. Seek the help of a professional who can answer your questions and help you understand the results from the retirement calculator so you can effectively adjust your retirement plan.
The team at Pension Solutions Canada is here to help. We specialize in helping individuals prepare for retirement whether staying here in Canada or planning to enjoy retirement living abroad. Let us assess and review your income streams in retirement and help you with retirement planning. Call us at 1-888-554-6661.