You have already started saving, but
knowing that people live longer and in better health than ever before, will you have enough money to take advantage of all your years of retirement? Whether you want to travel around the world, grow a vegetable garden or go back to university, you must have the retirement income needed to fulfill your dreams. That is why you need to plan for your retirement.
As a rule, we recommend
setting 10% of your net annual income aside for retirement. Of course, there are exceptions. The percentage of your income you need to save depends on when you start saving. It could also vary based on different circumstances that can affect your retirement income, such as the rate of return on investments.
Knowing that life expectancy at birth is 85 for women and 81 for men, the length of your retirement is a determining factor in calculating your income. If you expect your retirement to last 20 years, your personal savings, along with your public-sector benefits (Québec Pension Plan and Old Age Security) should be enough. It is therefore very important to set financial goals in order to make sure you maintain your desired standard of living.
To maintain your standard of living after you retire,
you need about 60% to 80% of your average gross annual income for the last five years you worked.
If you apply for a retirement pension under the Québec Pension Plan at age 65 or later,
your pension will be higher than if you had applied at age 60.
The risk factors that will affect your retirement income are
life expectancy, and the
rate of return on your investments and
their liquidity. You must take those factors into account when planning your retirement. A financial planner will provide you with valuable advice on the factors impacting your income.
There are many ways to approach retirement:
phased retirement or, more traditionally,
leaving the labour market definitively.
Some 42% of workers in Québec are unaware of how much they know about retirement: 23% think their knowledge is good when it is really only fair, and 19% think their knowledge is fair, when it is actually good*.
*Retraite Québec, Sondage 2016 sur les connaissances des travailleurs à l'égard de la retraite et de sa planification financière (2016 survey on workers' knowledge of retirement and retirement planning; French only)
Did you know that people who have a financial planner have 69% more financial assets than those earning a comparable salary who do not have a financial planner?See note
Your financial planner can help you adjust your retirement project, for example:
To learn more about daily savings, read the publication entitled
Guide des 99 trucs pour économiser sans trop se priver (French only). It is packed with ideas for saving and setting more aside for retirement.
By setting goals and using direct debit payments, saving becomes a walk in the park.
Choose one of our tools to plan for your retirement or simulate your retirement income.