Marie* is 58 years old. She would like to retire at 62 but wonders if this is realistic based on her situation. Marie works as an administrative assistant in a medical clinic and has a pension fund through her employer. She doesn't have much time to plan for retirement. Ideally, she would like everything to take care of itself! Marie has saved all her life but is not sure if she has set enough aside for retirement.
Financial situation
- Salary: $75,000 per year
- Savings:
- Defined benefit pension plan: $2,000 per month upon retirement
Our advice
"Marie can use My Game Plan to get a global view of all her savings sources and find out if it will be enough to retire at the age she wants."
– Sébastien Lafontaine, FlexiFonds mutual fund advisor and financial planner
My Game Plan is a tool designed to help you plan for financial goals, such as achieving a comfortable retirement. Just enter your information, and within a few minutes, you'll know whether you're on the right track or need to make adjustments.
According to our advisor, the most important information that Marie should enter into My Game Plan would be the following:
01Retirement age
"I recommend entering the age at which Marie wishes to retire, so 62. This will give her a true picture of what's required if she wants to stop working at that time. She can always change this age later based on her plan results", says the advisor.
02Defined benefit pension plan
"The amount you receive per month from a pension fund makes a big difference in your planning," says Sébastien Lafontaine. This information can be found in an annual statement provided by your employer. You can request this data from your employer or consult your latest statement. In My Game Plan, you will need to enter the gross amount (before tax) you'll receive.
03Savings accounts
Marie has savings in an RRSP+ with the Fonds de solidarité FTQ as well as a TFSA and LIRA with two other financial institutions. "First of all, I congratulate Marie for managing to put money aside! Since she's a Fonds saver, her RRSP+ is already factored into My Game Plan. I recommend that Marie add all her other savings accounts to the plan. This may take a little effort at first, but it's well worth it. She will then have a global view of her savings and be able to make better decisions."
My Game Plan tip
When adding a savings account, you can specify your investor profile by clicking on More Details. This information will then be linked to the investment's projected performance and influence the plan results. Someone with a conservative profile, for example, could choose the Preservation of Capital profile.
04Retirement expenses
This is where you determine your desired standard of living during retirement. In other words, how much money will it take to live the retirement you really want? "It's a very personal decision," comments Sébastien Lafontaine. "Expenses generally tend to decrease during retirement, but if Marie plans to travel or knows she'll need special health care, for instance, her monthly expenses may go up."
Our advisor suggests setting a retirement budget. Another simple way to predict retirement expenses is to base them on your take-home pay.
Marie's net pay is $2,047.12 every two weeks. A budget of around $4,100 a month would maintain her current lifestyle. "She could also plan for a little extra in the early years of retirement if she envisions an active life." However, if Marie has ambitious retirement plans or significant debts to settle, a more detailed budget would be in order.
My Game Plan tip
In the Retirement Expenses section, enter expected expenses in the Monthly Amount field. This amount is vital to determining if your retirement income will be enough to cover your expenses!
05Preferences
This section enables Marie to specify her personal planning preferences. As the tool gets to know Marie better, it will offer more customized advice. For instance, how willing is she to increase her savings or decrease retirement expenses?
"Answer honestly. It helps to know which elements to work on next to achieve your desired objective."
– Sébastien Lafontaine, FlexiFonds mutual fund advisor and financial planner
Strategies
Once this information has been entered into My Game Plan, it's time for the results. Expressed as a percentage, this figure indicates the extent to which Marie will be able to finance retirement at the desired age.
"Based on the information we have at hand, Marie's score is 95%," notes our advisor. "That's very good! She will be able to retire at 62 as she wishes." Sébastien Lafontaine would encourage Marie to consult the tool's suggestions for optimizing her plan.
Featured strategy
Putting off claiming government annuities means more money in the long run. Québec Pension Plan (QPP) and Old Age Security (OAS) benefits increase for each month of deferment. That can add up to tens of thousands of dollars over the course of a lifetime!
Several other strategies can help solidify Marie's plan, such as building up an emergency fund for unforeseen events. She could even add this to her goals in My Game Plan and monitor her progress.
While Marie is on the right track, someone with a lower score could choose other proposed strategies. "Would you like to save more in your later working years? Work part-time during retirement? Cut back a little? Delay retirement? Several options are available," says our advisor.
Ready to take stock of your retirement?
Like Marie, you can turn your questions into concrete answers. My Game Plan is a step-by-step guide to building the retirement you want. Try it today. It's simple, fast, and reassuring!
Plan your retirement with confidence
My Game Plan helps you prepare for the retirement you want, establish a disbursement strategy, and realize other life projects. Do you save with us? Access the tool free of charge from your online account.
