This calculator is designed to show you the amount of money you need to invest each year, in
order to accumulate a fund that will provide an income after you retire
Note: Inflation is a factor when calculating future values of money. in this analysis, the inflation
rate will be taken into consideration.
Because it is defficult to know the amount of annual income you need at age 65 due to inflation
rates,you need to imagine that you are retireing today. In other words, pretend you are
already 65 years old. You already know, then the income (in today's dollars) you require.
Once they reach retirement age, most people require between 60% and 70% of their
pre=retirement income. Remember, most of this income will come from registered
money (i.e. RRSP's), and will be taxable when you are withdrawing it.
Some other points to remember:
- It is assumed that by age 65, you will have no mortgage payments to make,
and that your children are no longer dependents.
- You should combine the income of you AND your spouse, as both of you will
be using the retirement income.
This calculator allows you to take into consideration your current savings, as well as the
type of interest you are earning, both on your current savings and your future
retirement fund. This is an important distinction, because your investments today
may be in more aggressive funds and portfolios then you wish to use once you've retired. |