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There are two schools of thought on how much money is needed for retirement. One school, pushed typically by the money management business and based on rather shaky foundation, is that most people need about 70 percent or more of their pre-retirement incomes to enjoy a comfortable retirement.
The other school, the most prominent of which is Malcolm Hamilton, argues that there is little data to support the notion that most Canadians need nest eggs of $1 million or more to retire at the traditional age of 65.
I think the latter school has a sounder argument. Most Canadians retiring at the traditional age of 65 will probably find OAS and CPP will provide most of their required income. A modest nest egg of a few hundred thousand dollars should suffice for the rest. Whether most Canadians of working age who don't have traditional pensions are on track to save up even modest nest eggs is a different story.
- Fidelity's Retirement Math
- Are Canadians Saving Enough For Retirement?
- Are Canadians Saving Enough For Retirement? Part 2
- Fidelity’s ‘Scary’ Retirement Findings
The other school, the most prominent of which is Malcolm Hamilton, argues that there is little data to support the notion that most Canadians need nest eggs of $1 million or more to retire at the traditional age of 65.
I think the latter school has a sounder argument. Most Canadians retiring at the traditional age of 65 will probably find OAS and CPP will provide most of their required income. A modest nest egg of a few hundred thousand dollars should suffice for the rest. Whether most Canadians of working age who don't have traditional pensions are on track to save up even modest nest eggs is a different story.