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Retirement Plan Calculator (calculator)
Do you know what it will take to create a secure retirement? Use this
calculator to help you create your retirement plan. View your retirement
savings balance and your withdrawals for each year until the end of
your retirement.
Definitions
Current age Your current age.
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Age of retirement Age you desire to retire.
Gross annual income Your total household income. If you are married,
this should include your spouse's income.
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Current retirement savings Total amount that you currently have saved
toward your retirement. Include all sources of retirement savings except
for your pension income.
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Pre-retirement rate of return The annual percent you expect to earn
on your investments before you retire.
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Post-retirement rate of return The annual percent you expect to earn
on your investments after you retire.
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Percent of income to save The percentage of your annual income you will
save for your retirement goals.
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Expected salary increase Annual percent increase you expect in your
household income.
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Years until retirement Number of years before retirement.
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Years of retirement income Total number of years you expect to use your
retirement income.
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Percent of income at retirement The percent of your working year's household
income you think you will need to have in retirement. This amount is
based on your last year's salary. The default is 70%. You can change
this amount to be as low as 50% and as high as 150%.
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CPP (Canada Pension Plan) or QPP (Quebec Pension Plan) The CPP/QPP ensures
a basic income for retired workers. If you have paid into the CPP/QPP,
you are entitled to receive a monthly payment when you retire. CPP/QPP
is payable at age 65 (it can be as early as age 60 or as late as age
70). This is based on a final average calculation of your salary. A
maximum pensionable earnings of $775 applies to those who earned $37,600
or more in 2001. Should you choose to retire early, your monthly CPP
income will be reduced by 0.5% per month for every month before 65.
If you choose to delay retirement, your monthly CPP income will be increased
by 0.5% per month for every month after age 65. This calculator assumes
a retirement age of 65. For additional information, click here.
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RRSP (Registered Retirement Savings Plan) This government sponsored
financial planning program allows citizens to contribute 18% of their
previous years gross income into a tax sheltered retirement account.
This calculator allows you to save more than 18% of your income but
it should be noted that tax has not been incorporated into the calculator.
In addition, if you have a company pension plan this may reduce your
maximum annual contributions by what is called a "pension adjustment".
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Monthly OAS (Old Age Security) The Old Age Security pension is a monthly
benefit available, if applied for, to most Canadians 65 years of age
or over. If your net income in 2001 exceeds $55,309, you must repay
15% of the excess net income up to the full OAS payment. OAS benefits
are reduced at the time of payment to reflect this deduction. For additional
information, click here.
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Expected Rate of Inflation
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