Why you may need less than you think
 Many
financial experts say you’ll need up to 70% of your
pre-retirement income to maintain your lifestyle in retirement.
But, barring health problems and other unplanned “disasters”
, many other experts say you may need a lot less.
By the time you’re ready to retire, your kids will
probably be grown and financially independent. Your mortgage
will probably be paid off. And you’ll probably be out
of debt.
Your day-to-day expenses are likely to drop noticeably. You’ll
spend less on lunches, on gasoline or public transportation,
and probably less on clothes and entertainment. You’ll
also be paying less in income tax and of course you won’t
be making CPP/QPP or EI contributions.
In a sense, retirement is like exchanging time for money.
And having all that time can also help you save money because
you’ll be able to take a couple of hours to make your
own repairs to the toaster, the vacuum cleaner or the front
porch.
The point is, because many of the expenses you used to have
will be gone, your disposable income may not fall as much
as you think, a good fact to keep in mind when you’re
doing your planning.
Important information about our financial planning services can be found at the bottom of our
homepage.
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