Planning for retirement
Planning for retirement
Retirement takes planning.
It's easier when you have the right support. If you're a member, book
an appointment on AccèsD to plan your retirement.
Book an appointment on AccèsD.
Not a member? Schedule a call to book an appointment.
Test your retirement knowledge
You’re about to take a 5-question retirement quiz. For each question, select true or false. You’ll get your results once you’re done answering all of the questions. Feel free to skip this section and move on to the next: Go to Retirement planning steps.
That's correct!
It's not that simple.
You'll need between 50% and 70% of your annual end-of-career income to maintain your standard of living during retirement. However, you may need more or less depending on what you want to do and your desired lifestyle.
That's correct!
Unfortunately, that's not the case.
If you retire between 60 and 64, your QPP pension will be permanently reduced by 30% to 36%.
There are strategies you can use to postpone receiving your pension. Talk to an advisor.
That's correct!
Not exactly.
Government plans should cover 20% to 40% of your income. The rest should come from your personal savings, your employer's pension plan (if you have one), or other sources of income. A solid financial plan will help you gradually reach your goals.
That's correct!
It all depends on your situation.
If you start saving at a young age, 10% of your annual pre-tax income may be enough for your retirement plans. If you start saving later, you'll need to bump up this percentage. Figure out your savings plan and adjust to changes along the way. The important thing is to start saving now, regardless of the amount.
That's correct!
That would mean missing out on some good advice!
As retirement experts, our advisors can ensure you aren't forgetting anything. They'll explain the financial impact of your choices and adapt your savings strategy accordingly, regardless of when you choose to retire.
Great job! You know the basic principles of planning for retirement. You know that the key to success is the ability to adapt. An advisor can help you identify what you need to do to make sure you have the retirement you want.
With more information, you'll be able to make more informed decisions. It's never too early, and definitely never too late, to start saving. Don't let worry or guilt put you off. Our advisors can help!
Retirement planning steps
- 1
Identify your sources of income
Government pension plans don't provide a lot, so you'll need other income sources, such as your personal savings or your employer’s pension plan.
- 2
Decide on your retirement age
This is how you'll determine how much time you have to save up and reach your goals. According to average life expectancy in Canada, you may be retired for over 20 years.
- 3
Determine your goals
You'll generally need between 50% and 70% of your annual end-of-career income (after tax) during retirement. It's the nature of your goals and your desired lifestyle that should dictate how much you need to save.
- 4
Calculate how much you need to save each year
How much depends on the person. Ideally, you should put aside 10% of your annual pre-tax income. However, self-employed workers and salaried employees without a pension may want to save more. The important thing is to have a flexible savings plan and to start saving now, regardless of the amount.
- 5
Choose where to invest your savings
Choose investments based on your situation, your risk tolerance, the number of years until you retire and your goals. For example, if you're self employed, you can alternate between saving for your business and saving for yourself. In any case, we can help you make good choices.
Retirement calculator
Our calculator helps you see the bigger picture by identifying your future financial needs, the savings you'll require and the age at which you can retire.
That way, you'll have everything you need when you meet with an advisor.
Calculator on AccèsD
Use this calculator if you're registered for AccèsD. You can save your calculations to come back to later.
Web calculator
If you're not a member or not registered for AccèsD, use this calculator.
Retirement income sources
Video
Government plans typically cover between 20% and 40% of the income you'll need.
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Old Age Security (OAS)
This is a taxable monthly pension indexed to the cost of living. It's paid to Canadians 65 and older.
-
Quebec Pension Plan (QPP)
This pension is paid to all Quebec workers who have contributed during their working years. The amount paid depends on the number of years you've contributed, your earnings during that time and the age at which you apply.
- Between 60 and 64: benefits reduced by 7.2% per year
- At 65: full benefit amount
- Between 66 and 70: benefits increased by 8.4% per year
The longer you wait, the higher your benefits will be for the duration of the payment period. Therefore, it may be worthwhile to postpone your application if you have other sources of income.
Self-employed workers who pay themselves a salary must contribute to the QPP. If they pay themselves dividends, QPP contributions are optional. If they do contribute, it's better for them to pay the maximum amount, as the QPP is a significant source of income at retirement.
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Guaranteed Income Supplement (GIS)
This monthly benefit is available to low-income Canadians. It varies according to family situation and income. It can also be combined with the Allowance, which is a benefit for people aged 60 to 64 whose partner or spouse is already receiving the GIS.
In addition to the retirement income from public plans, some employers also offer 2 main types of pension plans. Like government plans, these plans alone don't ensure that you'll maintain your standard of living during retirement.
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Defined contribution plan
- You know how much you and your employer contribute ahead of time
- Pension amount depends on your and your employer's contributions and the value of the pension fund investments when you retire
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Defined benefit pension plan
- You know how much money you'll receive when you retire
- Usually a percentage of your salary multiplied by your number of years of service
Your personal savings may well be your biggest source of income in retirement, especially if you can't rely on your employer's plan. That's why it's important to start saving as early as possible.
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Registered investments
- Registered with the Canada Revenue Agency (CRA)
- Provide tax benefits
- Include RRSPs, TFSAs and IPPs
-
Non-registered investments
- Help you continue saving once you've reached the maximum contributions for your RRSP, TFSA or employer's pension plan
- Include the money in your bank accounts and investments in the stock market
- Generate taxable income
Depending on your needs and goals, you may need to consider other sources of income. Keep in mind that some of these amounts are added to your taxable income and may reduce the income-based benefits you receive at retirement.
- Renting or selling real estate, like your primary or secondary residence
- Working part-time
- Transferring or selling a business
Steps to start preparing for retirement now to plan your retirement
Schedule automatic transfers
When you set up automatic transfers throughout the year, you take the work out of saving while accruing interest.
Contribute the maximum allowable amounts
Registered investments grow tax-free for longer and some of them will reduce your taxable income. Since your income will be lower, you'll also capitalize on government income-based credits and programs.
Pay off your debt
Depending on your situation, it may be worthwhile to pay off your debt with a portion of the tax refund you get from your RRSP. You should pay off the debt that has a borrowing rate that's higher than the rate of return on your investment, whether that's your mortgage or other form of debt.
Review your retirement plan periodically
Changes related to the economy, your job, your family situation or your health could have an impact on your ability to save and how you'll reach your retirement goals. Review your retirement plan regularly with an advisor.
Prepare for the unexpected
If you're self-employed, it's important to plan for the unexpected. You can do this by buying insurance to protect you in the event of accident, disability or serious illness.
Choosing the best savings vehicles
Make an appointment
An advisor will help you determine your retirement goals and draw up a personalized financial plan.
- To be eligible for the Old Age Security (OAS) pension, you must also be a citizen or legal resident of Canada and have lived in the country for at least 10 years since your 18th birthday. If you do not currently reside in Canada, you must have lived in Canada for at least 20 years since turning 18.