Ask someone when they want to retire and you’ll often hear:
“65.”
Why 65?
Usually because that’s what retirement is supposed to look like.
But your birthday doesn’t pay your bills.
Income does.
So retirement planning becomes much clearer when you stop with age and start with a simple equation.
Step 1 — What might retirement cost?
Suppose you want:
$60,000/year
to support your retirement lifestyle.
Step 2 — What income might already be coming?
You may eventually receive income from sources such as:
CPP
OAS
workplace pension
rental income
other sources
Suppose those eventually provide an illustrative:
$30,000/year
Now your savings may need to support approximately:
$30,000/year gap
That’s a very different planning problem from simply saying:
“I need $1 million.”
Timing matters too
CPP’s standard starting age is 65, but eligible Canadians can start as early as 60 or as late as 70. Starting before 65 permanently reduces the monthly amount by 0.6% for each month early, while delaying after 65 increases it by 0.7% per month up to age 70.
OAS can begin at 65 or be delayed as late as 70; delaying increases the monthly pension by 0.6% per month, up to 36% at age 70, though individual circumstances matter.
So retirement planning isn’t simply:
Age + savings.
It is:
Spending + pensions + savings + taxes + inflation + time.
Nirvair takeaway
Don’t begin with:
“How much money should everyone have at 65?”
Begin with:
“How much income will I need—and where will it come from?”
That’s a much more useful retirement question.
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