The Truth About How Much Money You Need To RetireMay 15, 2023
BMO polls Canadians every few years asking ‘how much do you think you need to retire comfortably?’ Results show that Canadians believe we need $1.7 million to enjoy a comfortable retirement. This number has increased from $1.4 million previously, likely due to inflation and the rising costs of goods. However, the accuracy of this number is questionable.
During the summer of 2022 inflation was the highest we've seen in a very long time when it hit 8.1 percent. By the end of 2022 we saw it cool down to 6.3 percent which we're still feeling in our pocketbooks. The target and the expectation by the end of 2023 is a 3% inflation rate.
Many Canadians do not have a financial plan for retirement, and a large percentage of the population does not know how much money they need to do so. Only 44% of Canadians feel they are financially on track for retirement, while only 47% know how much money they need. The average retirement age in Canada is 62, and only 22% of Canadians expect to retire between 60 and 69. Most Canadians either plan to retire earlier or later. We encourage you to educate yourself about your retirement needs and create a financial plan so that you are prepared when you begin to reach retirement age.
If you actually had 1.7 million at retirement what would that look like within a drawdown of that account?
Watch the video below to see an example of how much money a retired couple would need to live comfortably.
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