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:
- How much should I have saved for retirement so far?
- How much should you have saved for retirement by age?
- How should you calculate how much you need at retirement?
- The retirement savings rule: How much do you need to save?
- How much should you save each year for retirement? The rule of 30
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.