Case Study - Retirement

How a small change can make a big difference

Mr. and Mrs. R.U.A. Client are 36 and 32 respectively, and they have two children. They're both planning to retire when Mr. Client turns 65 years old, and hope to enjoy many years of retirement.

Right now, they have a household income of $85,000 (pre-tax) and they'd like to maintain that standard of living at retirement, which means receiving 75 percent of their current income. The couple do not have company pension plans, but they anticipate receiving CPP upon retirement as well as OAS at the age of 65. They currently have $30,000 saved in RSPs and are both contributing $150/month to an RSP. They have some non-registered funds and are contributing $4,000/year to an RESP, but they anticipate using these funds for their children’s education.



For Mr. and Mrs. RUA Client to retire as planned and maintain their desired standard of living, they need to save $1,085,428 by retirement. (This amount antiicipates 2.5% inflation/year.)

If they continue their current annual savings, their retirement funds will grow to $1,011,219 (wiith an anticipated 8% return on investment). This will leave them with a shortfall of $74,209.



The couple still has close to 20 years to prepare for retirement, so they have time to make changes to their plan to attain their goals. For example, if they increase their RRSP contributions by only $50 to $200/month they would meet their plan – with a surplus. This example shows you how important it is to start planning for your retirement early.

Our financial planning software graphs retirement investments required with shortfalls/surpluses, wealth accumulation and income needs during retirement.






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