If you’re feeling unsure about your retirement readiness, you’re not alone. According to TD’s 2023 survey, 43% of Canadians aren’t confident they’ll retire when they initially planned. And the Healthcare of Ontario Pension Plan (HOOPP) found that 75% of Canadians aged 55 to 64 don’t believe they’ve saved enough.
With life expectancy in Canada now averaging over 82 years, the need for a reliable, long-term retirement strategy has never been more important.
Will Your Savings Last a Lifetime?
The foundation of a successful retirement plan is clarity. Begin by defining what retirement looks like for you. Do you envision travelling the world? Simplifying your lifestyle? Starting a passion project or business?
At RetireSURE, we believe retirement planning starts with purpose. Once you know where you want to go, we help you chart the path to get there.
Step 1: Define Your Retirement Goals
Start with a simple but powerful question: How much will I need each year to live comfortably in retirement?
While individual needs vary, a common benchmark is to aim for 70–80% of your pre-retirement income. Then, consider your desired retirement age—and how long you’ll need those savings to last.
Your Retirement Number = Annual Income Need × Number of Retirement Years
For instance, if you’ll need $80,000 annually and expect a 30-year retirement, your target is $2.4 million.
Next, subtract any expected income from government programs (CPP, OAS) or employer pensions. This helps determine how much of that goal must come from your personal savings.
Supercharging Your Retirement Savings in Your 40s and 50s
If you’re in your 40s or 50s and feeling behind on your retirement savings, you’re not alone—and it’s not too late. Many professionals hit their peak earning years during this time, which creates a powerful window to accelerate your savings and catch up with confidence.
Here are proven strategies to help you make the most of these critical years:
- Maximize registered contributions
- Redirect “freed-up” expenses like loans
- Reframe Your Home Equity
- Recalibrate your portfolio for the final push
- Delay retirement by even one year”
Step 2: Set a Savings Benchmark
Let’s say you’re 40 and planning to retire at 65. That gives you 25 years to reach your target.
Divide your savings goal by the number of years left. In our $2.4M example, that’s about $96,000 annually—or $8,000 per month. Of course, this is a simplified estimate. A financial advisor can help refine the numbers and factor in inflation, investment growth, and tax efficiency.
Step 3: Build Your Strategy
Here are key strategies to help you close the gap and grow your savings:
- Maximize Your RRSP Contributions: The Registered Retirement Savings Plan (RRSP) offers tax-deferred growth. Contributions reduce your taxable income and grow tax-free until withdrawal.
- Use a TFSA for Flexible Growth: The Tax-Free Savings Account (TFSA) allows investments to grow and be withdrawn tax-free, making it a versatile option for both short- and long-term goals.
- Take Advantage of Employer Pension Plans: If your employer offers a defined benefit or defined contribution pension plan, contribute enough to receive the full employer match.
- Automate Your Savings: Set up automatic transfers to your RRSP, TFSA, or investment accounts to build savings consistently.
- Review and Adjust Your Budget: Identify discretionary expenses to redirect more income toward retirement savings.
- Invest for Growth: Build a portfolio tailored to your risk tolerance, time horizon, and retirement goals. And make sure your money works twice as hard as you do!
- Work with a Financial Advisor: A professional can help create a personalized retirement plan and provide expert guidance.
The Best Time to Start? Now.
Whether you’re early in your career or nearing retirement, the most powerful step is simply getting started. With time, discipline, and the right plan, you can build a future that’s not just financially secure—but personally fulfilling.
At RetireSURE, we turn uncertainty into clarity by helping you define your vision and building a retirement strategy to get you there.
Are you on track for the retirement you want? Take our Financial Planning Assessment to find out.