According to new survey results released by BMO, Canadians believe they will need $1.7 million in order to retire comfortably. Many are concerned about inflation rates, living expenses, and what their future could look like with prices going through the roof. With nationwide inflation rates reaching a four-decade high of 8.1%, people have more reason to be worried than ever.
74% of those who took the survey are concerned about how economic conditions will affect current and future financial situations. 59% of survey respondents have also lost confidence in achieving the retirement funds they had originally planned for.
Aaron Ruston, financial expert from Purposed Financial, assures the public that these numbers do not necessarily apply to everyone.
"I believe 1.7 million is quite a bit high," Ruston chuckles. "Considering all the avenues and tools that we have and practices we can put in place to mitigate a lot of the costs that are associated with retirement age."
He adds there are many different tools to accumulate money in Canada.
"There's everything from the RRSP, which gives immediate tax deductions upfront [and] a heavy tax when you pull it out at the other end, or the TFSA, [where] you can put money in, no deduction, [and] you pull it out at the other end with no tax."
Ruston notes it's not only how much you accumulate and how much you make over time, but it's how you are drawing it out and what you are putting in your pocket.
He says that a retirement plan is not just about saving money, but also about reducing any debts you may have.
Ruston also mentions that the Canadian Pension Plan can be taken from age 60 to age 70. The average CPP being paid out is $717 a month. Old age security payout is on average $687.56 up to the age of 74 and after that $756. There is also a guaranteed income supplement for those with low income.
"Those aren't very big numbers compared to what we might need," he continued. "But when put in place with a well structured, well-planned type of investment plan and strategy, it can make a huge benefit overall."
Ruston says that people will be successful with their retirement as long as they take the time to lay out a solid retirement plan.
"We gotta make sure we're accumulating money in an effective way, so we can draw it off in an effective way, watch our debt positions, buy investments that track inflation," he commented. "I think we're gonna do okay."
Ruston encourages people to seek guidance from a financial planner. You can visit Purposed Financial at 88A Athabasca Street West, give them a call, or check out their website at purposedfinancial.com. You can also contact Ruston personally at (306) 684-1934.