Hi Sean, I want to retire in the next 10 years, but I’m not sure if I have enough to do so. How can I estimate what I need to have saved by then?

Dear Tim,

It’s great to hear you have a goal to achieve. There are many “rules of thumb” about how much you should have saved, but everyone’s situation is unique.

My first suggestion would be to determine your monthly income needs. The more you spend, the more you’ll have to save.

Then determine how much you currently have saved and how much you can reasonably save on a regular basis. You will also be entitled to Old Age Security (OAS) at age 65 and Canada Pension Plan at age 60. Depending on whether you have a work pension, you’ll want to factor this in as well. I wouldn’t recommend considering a potential future inheritance as a retirement strategy though.

Working with a financial advisor to determine how best to achieve your goal is important to help guide you and keep you on the right track. You might need to make some adjustments to how much you are saving or how much risk you are willing to take with your investments.

Something that is often forgotten, and is almost as important: what are you retiring to? “Not working” is not really a goal, so what will you do to keep both physically and mentally active? With retirement lasting in some cases more than 20 years, this is an important consideration.