An industry rule of thumb for estimating how much retirement savings you'll need is to assume you'll withdraw 4% of your retirement savings each year in retirement. Age, time horizon, life expectancy, expenses and your personal goals are factors that will impact your withdrawal rate, but no single rate or strategy will work for everyone.
A good monthly retirement income is any amount that allows you to live your expected lifestyle. When working with an Edward Jones financial advisor, they'll look at your portfolio withdrawal rate and your portfolio reliance rate, which is how much you'll rely on your portfolio for retirement income, while considering your full financial picture. Keep in mind that a "good" monthly retirement income varies from person to person and includes other basic factors such as:
- Canada Pension Plan (CPP) benefits
- Old Age Security (OAS) benefits
- Benefits from any employer sponsored pension plan
- Existing savings balances:
- Locked-in retirement plans
- Tax-free Savings Account
- Non-registered account balance(s)
- Current monthly savings contributions
- Expected rate of return
- Unretirement earnings
- Taxes
- Inflation
The "power of three" is the amount invested, the rate of return and time in the market. The time you allow your retirement funds to grow, the amount of money you invest, and the rate of return on your retirement funds impact how much your account could grow. All are important factors in determining if you can achieve your goals in retirement.
Retiring on your terms starts with a plan. Connect with an Edward Jones financial advisor to build strategies designed to help your savings support the retirement you envision.