Retirement Planner

Do you know what it will take to create a secure retirement? Use this calculator to help you create your retirement plan. View your retirement savings balance and your withdrawals for each year until the end of your retirement.

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Definitions

Current age: Your current age.
Age of retirement: Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your retirement savings. So if you retire at age 65, your last contribution happened when you were actually 64. This calculator also assumes that you make your entire contribution at the end of each year.
Gross annual income: Your total household income. If you are married, this should include your spouse's income.
Current retirement savings: Total amount that you currently have saved toward your retirement. Include all sources of retirement savings except for your pension income.
Rate of return before retirement: The annual percent you expect to earn on your investments before you retire. The actual rate of return is largely dependent on the type of investments you select. For example, for the last thirty years the average annual rate of return for the TSX is about 10%. Savings accounts at a bank or credit union may pay as little as 2% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
Rate of return during retirement: The annual percent you expect to earn on your investments after you retire. If you plan on withdrawing your money within five years, you may wish to choose a more conservative rate of return. The actual rate of return is largely dependent on the type of investments you select. For example, for the last thirty years the average annual rate of return for the TSX is about 10%. Savings accounts at a bank or credit union may pay as little as 2% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
Percent of income to contribute: The percentage of your annual income you will save for your retirement goals.
Expected salary increase: Annual percent increase you expect in your household income.
Years until retirement: Number of years before retirement.
Years of retirement income: Total number of years you expect to use your retirement income.
Percent of income at retirement: The percent of your working year's household income you think you will need to have in retirement. This amount is based on your income earned during the last year you will work. You can change this amount to be as low as 0% and as high as 150%.
Monthly Company Pension: This is your current monthly figure as provided by your employer on your pension statement. By checking the "Monthly Company Pension adjusted for inflation" box, the inflation rate will automatically be applied. This means you do not have to estimate what your monthly pension will be at retirement.
CPP (Canada Pension Plan) or QPP (Quebec Pension Plan): The CPP/QPP ensures a basic income for retired workers. If you have paid into the CPP/QPP, you are entitled to receive a monthly pension payment as early as age 60 or as late as age 70. CPP/QPP is based on how much, and for how long, you contributed to the plan and the age at which you choose to start your Canada/Quebec pension payments. As of January 2010, the maximum CPP payment is $947.86 per month. Should you choose to start your Canada/Quebec pension payments earlier than age 65, your monthly CPP payment will be reduced by 0.5% per month for every month before 65. If you choose to delay retirement, your monthly CPP payment will be increased by 0.5% per month for every month after age 65 up to age 70. Click here for more information. This calculator assumes that you start receiving your benefits at age 60 or at the age you retire, whichever is later.
RRSP (Registered Retirement Savings Plan): This government sponsored financial planning program allows Canadian residents to contribute 18% of their previous years earned income into a tax sheltered retirement account. Please note however, that this calculator allows you to save more than 18% of your earned income up to an annual maximum contribution limit. In addition, if you have a company pension plan this may reduce your maximum annual contributions by what is called a "pension adjustment".
Monthly OAS (Old Age Security): The Old Age Security pension is a monthly benefit available, if applied for, to most Canadians 65 years of age or over who have lived in Canada for at least 10 year after reaching age 18. If your net income exceeds certain thresholds you must repay part or all of the maximum pension amount. The repayment amounts are normally deducted from the monthly payments before they are issued. Click here for more information.
Expected Rate of Inflation: What you expect for the average long term inflation rate.