Quote:
Originally Posted by GranteedEV
i know it's 30-35 years down the line but financially independent retirement before age 70 feels impossible to be honest. To get 75k a year in income, assuming about 9k of that is from pension, it means i need to have 1.32M saved up That however assumes GICs are still doling out 5% interest. Otherwise, if GICs are half of that, i need double that amount. And even that ignores inflation, which can eat into any gains. Maybe i am just a pessimist but even if I put all my money into something like XEQT and trust the market, there's a good chance I won't have anywhere near the money i need even at age 70 to retire comfortably.
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Napkin math incoming and make sure you get actual professional advice.
The market returns 6-7% adjusted for inflation. The trinity study found that a 4% withdrawal rate adjusted for inflation for a 30 year retirement was successful when backtested against the S+P performance and inflation. Other studies have been done and found 3.5-4%.
If you want a 75k per year retirement income and you are 35 years out I will assume you will max CPP. Current benefit max is 1350 or so and doesn’t yet include the full benefit of increases from the new CPP rates. Plus you get another 600 or so from OAS so let’s call that 25k per year.
So now you need a 50k income stream from your investment or 1.25 million in the bank.
At a 7% return and 35 years that is a $700 per month contribution.
If you want 70k after tax in retirement I assume you are making more than 100k now so it doesn’t seem unreasonable to save $8400 per year.