Save. Spend. Splurge.

How much do you need to have saved to be able to retire in 20 years?

The answer seems to that in 20 years, around $1.2 million in Canada, according to Garth Turner.

A few tidbits from his post…

If you have 20 years to go before retiring (age 45):

Average retired person in Canada now grinds through $51,000 a year.

  • If inflation over the next 20 years averages 3%, you’ll need $92,100 to buy the same stuff.
  • You can expect about $20,300 from the Canadian government.
  • Shortfall = $71,000
  • ….which means you need about $1.2 million saved, earning 6% a year by the time you hit 65 if you plan on retiring an “average” retirement

This means that right now, today, at the age of 45 (assuming you want to retire at 65), you need about $400,000 saved in the bank to achieve this in due time, either from your money saved in your company pension plan, or personal savings.

For the rest of us at varying ages, you could try this formula to see if you’re on track:

Your Age x 10% x Your Current Salary = What your net worth should be

This is assuming you plan on retiring at 65, and you want to keep your current lifestyle.


My plan has been on average, to save $50,000 net a year.

Some years I might save more than that amount, others not at all (2013 is looking to be a bust), but $50,000 net on average has kind of always been my mini goal.

Other Retirement Calculators:


Let’s not forget that the average person only has $100K saved at age 60 just before retirement, but they still think they can retire at 65.

Case in point? My parents, although they’re still working.

My personal goal was always $1 million, keeping in mind that my partner would save $1 million as well, along with a completely paid off house.

So in essence, we’d have $2 million saved between the two of us, and a house already paid for so we’d only have to pay utilities, maintenance, etc.

Seems to me like it’s still a good plan. Then again, I don’t know if I will continue working until 65.

I may want to work longer, or less. Who knows? I’d like to at least have a choice.


  • dojo

    Now that’s a lot of money. I hope I’ll be able to work even after 65, if it’s on my current business I might not have an issue, since I love it. Anyway .. time to start saving more aggressively. I won’t need a mil. here, but there’s clearly a lot of saving to be done anyway

  • Charles@gettingarichlife

    Is the $50,000 in a tax deferred account or is it a combination of taxable and deferred? I remember you said the housing is expensive where you’re at, are you going to buy in that area? My wife and I aim for $53,000 in retirement savings and $20,000 in cash/savings annually on top of any real estate pay downs. In 10 years we should be all good.

    • save. spend. splurge.

      I’m assuming Garth meant both. I personally just go by a net amount of $50,000 a year saved (after taxes).

      Housing is very expensive where we are. I am not buying until I see prices drop to a reasonable amount, maybe in 2014, 2015.. 2016. I am not in a rush but I do want a place within my budget and isn’t too big (not a lot of maintenance).

  • Cayley Murray

    I have also had the same problem with the java update kicking me off your blog. I finally got on after 2 days.

  • Eva @ Girl Counting Pennies

    Hmm, it depends where you want to live when you retire? I’ve never really thought about retirement in so much detail, but one thing for sure, I don’t think I want to live in the UK when I retire. I couldn’t handle the climate, it annoys me a little even now! Too wet, too cold 😛 Some tropical island maybe with a low cost of living…? 😉

  • Daisy

    My goals are similar to yours when it comes to retirement, but I’m okay with retiring at ~55. We’ll have our house paid of long, long before that (even if we don’t prepay at ALL).

    We have a very specific course of action and I think that we’ll be able to meet our goals. I’m not there at the net worth calculation yet, but we’re working on it!

  • Stefanie @ The Broke and Beautiful Life

    50k net a year is super impressive. I’m happy if I manage to max out my ROTH IRA.

  • Heather H

    I always struggle with these calculators because they assume our relatively high salary today as a couple is what we will need in the future (plus inflation) and then it comes up with an insane amount we should have saved already. If we have our house paid off and live relatively modestly except for travel, what we make today is far more than what we will need in the future, at least I hope so.

    • save. spend. splurge.

      I hope so too.

      I do think these calculations do assume a lot, but it’s also taking the average, right? An AVERAGE couple spends $51,000 but maybe some couples don’t even make or spend that, and are at the $30,000 range, which means there are others who spend $80,000 or more in retirement.

      Only you can determine for yourself what the right number is.

  • Done by Forty

    $50k a year in savings is a fantastic goal. I hope you reach it! Is that figure to include investment gains, or just your own contributions to retirement savings?

  • Erin @ Red Debted Stepchild

    Hmm, as a 24 year old making $50,000ish, I’m expected to have a net worth of $120,000. I feel like this calculation won’t work for many twenty-somethings since we are just getting started.

    Damn, I have a long way to go…I need to get moving!

  • Jane Savers @ Solving The Money Puzzle

    This savings plan only works if you make a lot more than 50,000 per year. My gross will be about $51,000 this year and that is my highest earning year ever so I cannot meet your goal but I am developing some pretty aggressive goals of my own and that a retirement is possible with much less than $1,000,000.

    Have you hade any complaints about getting on to your blog? I am blocked from accessing your home page by some Java update that does not have a way to skip or close. I can only get here by clicking on one of your search subheadings, such as about me, and getting to the home page from there.

    The Java screen looks sketchy because there is no way to close it and move on to your home page.

    • save. spend. splurge.

      @Jane Savers @ Solving The Money Puzzle: Then you could just live on less. Garth is only giving an average of what people spend ($51K) but you could spend less.

      No, no complaints yet.. but I will look into this… unless of course you just need to update Java.

      You could just google: Java Update, and go to the official site to update your browser. Otherwise, I think things like the video ads and all that won’t work.

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