How Much Money Do I Need To Retire?
Planning for retirement?
Having enough cash for a comfortable retirement helps remove the stress.
It is good practice to summarize your anticipated income and expenses upon retirement.
By doing so, you can estimate how much to save beforehand.
Many individuals receive private medical insurance coverage while working. For most, this coverage ceases upon retirement. Good private medical coverage purchased upon retirement provides peace of mind.
Life insurance helps ensure your loved ones will have enough funds upon your passing. Speak with an insurance advisor and your accountant to find out more.
At the age of 71, your Registered Retirement Savings Plan converts to a Registered Retirement Income Fund. You will need to draw a minimum specified amount each year after that. These draws are taxable.
For tax purposes, you can split pension income with your spouse. Up to fifty percent of your pension income can be divided between your spouse and yourself. Splitting of pension income can result in significant tax savings.
If you plan to travel once you retire, beware of potential tax consequences. If you spend a lot of time in the US once you retire, you may be subject to US tax. You could also lose certain benefits, such as provincial medical plan coverage.
There are many federal government programs available to assist Canadians with retirement. Among the programs available, are the Canada Pension Plan, Old Age Security and Guaranteed Income Supplement.
Canada Pension Plan payments depend on how much you contributed to the plan while you worked.
Old Age Security and the Guaranteed Income Supplement payments are based on income.
Plan for retirement as early as possible. With proper planning, you can better enjoy your golden years.