Planning your retirement investments

During retirement, most people need about 60% to 80% of their pre-retirement earnings to maintain their current lifestyle. Although you may want to retire at age 55, the average age of voluntary retirement is about 62. The average life expectancy in Canada is about age 78, with more and more individuals living well beyond 90. Based on these numbers, after you receive your last regular paycheque, you are still going to need a source of income for at least 20 more years.

You need to save enough money during your working years to create an annual income stream in retirement. You are more likely to achieve your preferred retirement lifestyle if you take the time to set your goals, make a plan and commit to regular deposits. Before you can determine how much extra you need to save, you need to consider the sources of income that will be available to you in retirement.

Three possible sources of retirement income are:

• Government plans including the Canada/Quebec Pension Plan (C/QPP) and Old Age Security (OAS)
• Company plans such as your Group Retirement Savings Plan
• Personal savings including your Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs) and other non-registered personal investments

An ideal asset mix will consist of your group plan, personal RRSPs and TFSAs, plus other income. Your group plan could make an important contribution to your retirement income; the size of that contribution is up to you.