Can I retire on 50% of my salary?
It's a question many of us ask ourselves as we approach retirement age: can I retire on half my salary? The answer, unfortunately, is not a simple one.
There are a number of factors to consider when thinking about retirement income, including government benefits, your pension, and your personal savings.
Government benefits include the Canada Pension Plan (CPP), Old Age Security (OAS) and the Guaranteed Income Supplement (GIS), which is available to low-income seniors. CPP is earned during your working career and is paid monthly when you retire between the ages of 60 and 70. OAS is available to all Canadian residents aged 65 and over, and is paid monthly. The GIS is available to seniors who receive OAS and have a low income.
Your pension is another source of income in retirement. If you have a defined benefit pension plan, your employer will provide you with a set income in retirement. If you have a defined contribution pension plan, you will need to make sure you have enough money saved up to provide yourself with the income you need in retirement.
Finally, you will need to consider your personal savings. This can include money saved in a Registered Retirement Savings Plan (RRSP) or a Tax-Free Savings Account (TFSA).
The best way to figure out if you can retire on half your salary is to speak to a financial advisor. They can help you figure out how much income you will need in retirement, and what sources of income you can rely on.
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