Retiring Later in Life could Make You Richer

The 2009 economic recession shook America to its core.  People in the United States lost their jobs and valuable savings from their retirement savings plans.  Studies show that Canadians are retiring earlier in life, because of less demand in the workforce, and less physically challenging jobs.  In a recent study, due to the downturn, most people in the United States will now retire at the age of 70, instead of 65.

It is suggested that the new age of retirement be changed to 70, because this will slow down our OAD (old age dependency rate) by approximately 45 percent.  As an incentive, Canadian pension plans will increase from 30-42 percent for those who choose to retire at the age of 70 instead of 65.

Since people are living longer, it is necessary to plan retirement savings as soon as possible, so that you have enough income to survive comfortably when not working.

Below is a checklist to follow for a comfortable retirement:

1.  The average individual needs at least 75-85 percent of their pre-retirement income to retire.

2.  Track expenses today, and forecast what you will need on a daily basis in retirement.                 Transfer your RRSP to an RRIF

3.  Old Age Security and Canadian Pension Plans can be a danger for high-income seniors. Convert taxable income into capital gains that will earn money in the future.

Source: Is 70 the New 65?