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How much money will I need to retire?

 
The answer to this question depends on how you plan to live after you retire. You will likely need more money if you want to travel, for example, than if you stay at home. Find out more about what income you may need after you retire.

Can you live on less after you retire? Again, it depends on your lifestyle. Some costs in retirement are lower. You won't have to travel to work. You’ll probably have paid off your mortgage. And the kids will likely be through school and living on their own.

But other costs may increase. Seniors may have higher health care costs. And don’t forget: prices may rise, so the same income won’t go as far. Learn more now about retirement spending.

Tip: One rule of thumb is that you will need 60-80% of your pre-retirement income when you retire. That's based on how much you think you will be earning a few years before you retire.

Getting ready to estimate

You can use an Internet calculator to estimate how much money you’ll need when you retire. Here are a few of the better ones:

Canadian Retirement Income Calculator This calculator is from Human Resources and Social Development Canada. It helps you figure out how much money you will get from government programs, work pension plans, and private savings. It assumes you will need 70% of your pre-retirement income.

Retirement Planner Fiscal Agents' calculator lets you adjust how much you think you will need and how much prices will rise. It uses built-in estimates for how much you will get from government programs.

Retirement Planning Calculator This step-by-step calculator from Morningstar asks for your age now and when you want to retire, how much you've saved so far, and how much money you think you'll need after you retire. It then shows you how much to put aside each month to reach your goal.

Calculators are based on the “average” person. But everyone is different. If you have a very high or very low income, these calculators may not work for you. To get a better idea how much money you will need to retire, build a budget. This Retirement Budget Worksheet (in Microsoft Word or pdf format) will help you get started.