Too intimidated by the idea of planning your retirement? This free government tool might help
Confused about when you could retireĀ or how much you should be saving before retirement? The federal government has launched a handy new planning tool to help you figure that out.
The Retirement Hub provides a clearer picture of your retirement options and how you can plan for them.
The hub features a retirement income calculator, which includes the Old Age Security (OAS) pension and Canada Pension Plan (CPP) benefits.
The calculator takes you through several steps to determine everything.
First, you must enter your gender, birthday, and annual income from all sources before tax. Then, you’ll be asked to set a yearly retirement goal income (before tax) in today’s dollars.
The tool highlights a monetary range that recent Canadian retirees with your income at your current age received when they turned 70.
For instance, if you currently make $60,000 before tax and are 31 years old, the tool estimates that your retirement income will range between $27,000 and $46,000.
You can enter an amount as the tool suggests or set your goal.
Government of Canada
The following steps include answering several questions, including if you are a member of an employer pension plan, whether you have a registered retirement savings plan (RRSP), and if you have any other savings (such as a TFSA account) that you plan on using once you stop working.
Government of Canada
Government of Canada
The tool summarizes your estimated retirement income from various sources based on all the information entered, allowing you to compare that to your goal income.
However, the calculator’s results are estimates and are not intended to be used for financial planning, notes the website.
The website also includes an Old Age Security Benefits Estimator, which requires you to answer five questions to help determine what your OAS benefits could look like once you hit 65.
If you’re unsure whether you’re ready for retirement or want extra assistance with planning, there’s also a quiz you can take, which provides a checklist of tips to help you with your plan.
Best of luck!