Planning my retirement

Planning today for a worry-free tomorrow 

You’ve made a smart choice by deciding to set money aside for retirement. But you’re not quite sure how to proceed. What’s the best way to save? The fact is that regardless of the strategy you choose, it’s never too early or, for that matter, too late to start saving. 

The 5 steps of planning 

The easiest way to begin planning is to follow these five steps: 

1. Determine the sources of income on which you will be able to rely. 

2. Decide at what age you would like to retire. 

3. Calculate how much money you will need in retirement. 

4. Calculate how much you will need to save. 

5. Invest in an RRSP.

Step 1: Determine the sources of income on which you will be able to rely

You can count on the following sources of income when you retire:

Step 2: Decide at what age you would like to retire

While you may want to retire at age 55, 60 or 67, the fact is that your finances will dictate when you can actually do so. Because your sources of retirement income will differ depending on your age, you will have to think carefully about when to stop working.

At age 55

 - Not eligible for any public pension plan
 - Personal savings are the only source of income

At age 60

 - Eligible for the Québec Pension Plan (QPP)
 - Pension is less than the amount paid at age 65

At age 67

 - Eligible for all public pensions: QPP, OAS and the Guaranteed Income Supplement (if you are eligible)

It’s up to you to decide when to retire but you have to make sure you have the right savings strategy to make it happen.

Step 3: Calculate how much money you will need in retirement

Experts agree that in general, an individual will require approximately 70% of their gross annual employment income to maintain the same standard of living in retirement. So for example, if your annual income is $40,000, you will need $28,000 in retirement.

However, this amount can vary depending on your personal situation. You therefore have to take into account:

  • Rent or mortgage payments, if any;
  • Your retirement plans (e.g. travel, renovations, recreation)
  • Your state of health

Step 4: Calculate how much you will need to save

Various retirement income calculators are available online, such as Mon plan, je le fais maintenant! (French only) and CompuPension to help you prepare a savings plan. With these tools, you will be able to see how much you will receive from public plans and how much you need to set aside. 

Remember, you must review your plan whenever your financial situation changes (e.g. purchase of a home, birth of a child, a pay raise).

Step 5: Invest in an RRSP

A good way to build income for retirement is through an RRSP. This type of vehicle allows you to grow your investment tax free until cashed in. With this type of vehicle, any income earned is sheltered from tax until it is withdrawn, which is usually in retirement, at which point your tax rate is most likely to be lower. An RRSP therefore frees up money that can be used to maintain your standard of living. 

An RRSP also offers the following advantages: 

  • A wide range of investment products
  • Can be converted into an annuity or a registered retirement income fund (RRIF)
  • Can be used for income splitting in retirement through a spousal RRSP in order to pay less tax.

Invest in an RRSP with the Fonds

Did you know that investing in an RRSP at the Fonds de solidarité FTQ entitles you to additional tax savings? This unique advantage makes the Fonds RRSP an ideal solution for anyone who wants to save for retirement.

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Please read the prospectus before investing. Copies of the prospectus may be obtained on its Website, from a local representative or at the offices of the Fonds de solidarité FTQ. The shares of the Fonds de solidarité FTQ are not guaranteed, their value changes and past performance may not be repeated.

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