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There are a few factors that will affect when
you can retire: |
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How much income will you need? |
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One approach to estimate what
you'll need in retirement is to combine all your current sources of income
and deduct what you pay in income taxes, mortgage payment (which you should
plan to have paid off by retirement), saving contributions and work related
expenses. The difference is what you should consider your income
requirement at retirement.
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How long do you expect to live? |
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Determining your future needs
includes understanding life expectancy. For instance, the average life
expectancy of someone aged 60 today is 82 years for a man and 86 years for a
women. However, keep in mind this is just an average, 50 per cent of
people live longer and 50 per cent live fewer years.
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What kind of lifestyle do you want to live? |
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Another key consideration is
that your future income needs will depend on your retirement plans.
Someone who aspires to spend more time gardening or woodworking will likely
need less income than someone who plans on jetting off on regular exotic
vacations.
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How much have you already saved? |
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Hopefully you have been
working diligently with your financial security advisor to accumulate assets
in preparation for your retirement. If not, it's never too late.
Be sure to consider the following: |
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Your retirement and lifestyle
planning goals.
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How government entitlements,
such as Canada Pension Plan and Old Age Security will help your goal of
retiring early.
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How income -splitting
contributions to a spousal registered retirement savings plan (RRSP) can
help your taxes in retirement.
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How and early-retirement
allowance from your employer could influence a decision to retire early.
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