Finding the number is a bit of work.
From this article in the Chronicle Herald:
Looking for the magic retirement savings number is like tracking a yeti in a blizzard ”” the minute you think you”™ve spotted one it melts away into the landscape. Only about 32 per cent of Canadians are covered by a company-sponsored pension plan, so the real issue for the majority is not how much they need to save but the fact that they need to save, period.
The amount of money Canadians put aside (most of which is for retirement) has dropped like a stone since 1982. An April 2010 BMO retirement institute report shows that the saving rate plummeted from about 20 per cent of personal income that year to just over one per cent in 2005. Thanks to the recession, the figure climbed back over four per cent in 2008, but it”™s still very low historically.
Fortunately, we are covered by company-sponsored pension plans. And we have been saving at a rate that is significantly higher than the national savings rate.
I spent most of the week-end thinking about the number. Planning the number. Running scenarios against the number. And I found it.
Why look for the number? At this time of year, I plan my goals for the next 12 months in the following categories:
- Personal Development
Finding the number was related to some goals in the Finances category. As I am getting a bit older, retirement is no longer an abstract concept. I wanted to ensure that our financial goals were on track. Our goals:
- Give, invest and manage money wisely
- Pay off mortgage and other debts as quickly as possible
- Provide university education for our children
- Maintain the family’s standard of living in the event of death or disability
- Become financially independent
- Maintain standard of living during retirement
- Preserve the estate for heirs
These goals, written quite a few years back, helped guide our thinking and planning. It was a great feeling to look at those goals, reflect on the future, and set targets for 2011. It was a great feeling because we are on track.