# How Much Money do you need for retirement in Canada?

Retirement is something that few people think about in their 20s and 30s and a large segment of the population around 50 isn’t really sure what they need to do to fund their retirement years. While there are many variables that come into play, one way is to figure out approximately how much money you will need in retirement. A good rule of thumb is this: in today’s dollars, you will need a minimum $1 million dollars to comfortably retire in Canada. To get to $1 million at retirement, assuming you make $50,000 per year, you should try to save at least 15% per year (if you start in your early 20s); if you start later, say in your 30s, try saving closer to 20%. If it’s still early enough for you (say under 40), then saving closer to 25-30% per year would be better!

## Retirement is something that few people think about in their 20s and 30s and a large segment of the population around 50 isn’t really sure what they need to do to fund their retirement years.

It’s important to remember that retirement is a long way off for most people. At this point in your life, you’re probably thinking about getting through the next day, let alone planning for retirement. But if it’s not on your radar yet, it will be soon. You’ll find yourself thinking about saving money with every paycheck or maybe even setting up an automatic transfer from your checking account into a savings account when each paycheck hits.

The earlier you start saving money for your future self (retirement), the more time it has to grow and compound into something significant by the time you retire. If you wait until later in life to start saving for retirement without any previous contributions, then expect to have less money at that time—which means fewer options available to help fund those years when they come around! So while there aren’t any hard deadlines or cutoff dates where once passed there’s no going back (unless we’re talking about investing in crypto-currencies here), there are definitely advantages if done sooner rather than later.

## While there are many variables that come into play, one way is to figure out approximately how much money you will need in retirement.

While there are many variables that come into play, one way is to figure out approximately how much money you will need in retirement.

In order to determine this, you will need to know what your living expenses will be once you stop working full-time. This includes housing costs and utility bills as well as any medical expenses that may arise. You should also consider transportation costs if you plan on continuing with a car payment or other regular expenses such as insurance premiums or memberships for sports clubs or gyms (if applicable).

Once you have an idea of how much money is necessary for each month in retirement, multiply it by the number of months per year (12) and then divide by 12 again to get an annual amount needed per month:

## A good rule of thumb is this: in today’s dollars, you will need a minimum $1 million dollars to comfortably retire in Canada.

The rule of thumb is to save 15-20% of your income. The more you can save, the less likely you will need to worry about how much money do I need for retirement in Canada. If you are saving this amount every month, even if it’s small, then it adds up over time. You should also think about investing that money in ways that will grow and eventually make enough interest so that you can live off of the investment alone.

If we follow those steps and invest properly, then a good rule of thumb is this: in today’s dollars, you will need a minimum $1 million dollars to comfortably retire in Canada (and maybe even more depending on where).

## To get to $1 million at retirement, assuming you make $50,000 per year, you should try to save at least 15% per year (if you start in your early 20s); if you start later, say in your 30s, try saving closer to 20%.

To get to $1 million at retirement, assuming you make $50,000 per year, you should try to save at least 15% per year (if you start in your early 20s); if you start later, say in your 30s, try saving closer to 20%.

For example: If a person is saving 15% of their income for the next 40 years and earns a 5% annual return on their investments (after fees), they’ll be able easily reach their goal. If that same person were only earning 2% instead of 5%, they would have to save as much as 22%.

Now let’s say that after 50 years of work and saving up an average of just over $1 million dollars (which is not unreasonable given how high house prices can be), we want our money invested so that it will grow over time while providing some income each month.

## If you are entering your 40s with just a few thousand in savings, don’t worry too much – it’s better late than never! You can still save 15-20% of your paycheque each year and after 10 years, it will add up very nicely!

If you are entering your 40s with just a few thousand in savings, don’t worry too much – it’s better late than never! You can still save 15-20% of your paycheque each year and after 10 years, it will add up very nicely!

In fact, if you have been making steady contributions to your RRSP over the past 10 years (and have not withdrawn any money), then I would bet that you have more than enough assets to retire tomorrow. Let’s say that at age 45, your assets total $200k in stocks and bonds. Assuming an annual return of 5%, this would grow to $638k by age 55. If we assume that all these funds are invested conservatively (as opposed to taking on more risk) then at age 55 this portfolio could generate income of 8% per year ($52k). This means that even though our hypothetical investor has saved only $200k over the past decade (and did not take any withdrawals from their RRSPs), they could now retire comfortably at 55 without ever having contributed another cent!

## Conclusion

After looking at the numbers and how much money you need for retirement, it is clear that if you want to retire comfortably, then you need to start planning early in life. A good rule of thumb is this: in today’s dollars, you will need a minimum $1 million dollars to comfortably retire in Canada. To get there at retirement age (average 65 years old), assuming your income doubles each year due to inflation, then it will take 10 years to save up enough money if you start saving 15% per year; if starting later than 30 years old then 20% per year would be necessary. If entering into your 40s with just a few thousand dollars saved up – don’t worry too much! You can still save 15-20% of your paycheque each year and after 10 years it adds up very nicely!