Quote:
Originally Posted by Sliver
What are the Coles Notes on this? I've only read how people under save for retirement.
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Essentially his conclusion was that the standard investment co rhetoric of "save 70% of your pre-retirement income or you're screwed" is in most cases not necessary and more in the neighborhood of 50% for most people. He admitted that most people simply end up never using all of this money they set aside. Many people will have a few sizable purchases when at or nearing retirement: potentially a new car, vacation home or other splurge items. After that period, your expenses are typically quite lower than you'd expect. You also are no longer saving for retirement, which in itself is a massive expense that is often overlooked in calculating your pre-retirement expenses.
With CPP, OAS and calculated RRSP/TFSA savings he seemed to contend that most people need not stress about some grandoise number being preached as a target for everyone and their dog. There were many easy to read examples laid out where an average middle class couple only put away 40-45%% of their pre-retirement income and had a very comfortable retirement from 60 on and included things like travel, recreation etc.
One of the big points he hit on that I never thought of either was that your retirement needs dwindle massively once you enter your 70's and activity levels drop. Budgeting for a reduction in activity and expense which will undoubtedly come at that time also needs to be taken into account i.e. your first ten years of retirement will look vastly different that the next ten years.
You may not agree with it, but this is very refreshing as a read based on something from the other perspective for once.