Situation and Needs Estimate
Retirement is considered a disinvestment. Being overly optimistic or pessimistic does not help you assess your long-term financial security. To analyze projected retirement over 30 years, it is recommended to use the 3%7 net rate of return.
Also, it is a good idea to conduct several simulations to assess different costs of living and consider the impact that various projects could have on long-tern financial security. Statistics Canada’s historical data reveal that retirees spend on average 67% of what they spent during their years on the labour market. The majority reduced its consumption by choice (53%) rather than by lack of resources (33%).8
7 Net of portfolio fees and inflation.
8 Source: McKinsey & Company: “Building on Canada’s Strong Retirement Readiness” 2014.
This document has been updated on August 31st, 2018 and reflects the state of the Law, including draft amendments, at that date.