To determine your retirement income, you have to consider all the variables, such as your current age, your anticipated retirement age, your current income, and your target retirement income.
According to Fidelity Investments, you should be able to reach the following retirement targets:
- By age 40, your savings put aside for retirement should be equal to three times your annual after-tax net professional income. If the after tax income is $200,000, then you should have an increase in your net worth of $600,000 from the day you started practicing. Your net worth is measured by the repayment of debt, corporate savings, or RRSPs.
- By age 50, your retirement savings should be six times your annual net income.
- By age 60, your retirement savings should be eight times your annual net income.
- By age 67 (your retirement age), your retirement nest egg should be ten times your annual net income.
No matter how much income you generate, it is Herculean task to build up a decent nest egg for retirement. Your return on secure investments such as term deposits and bonds has shrunk to almost zero. The stock market has been the refuge for investors looking for decent returns on their money. But with the huge volatility in the market reflecting a global economy on life support, you can ill afford to gamble away your life savings.
To top it off, the government then taxes almost one-half of your hard earned income. And you know that the government is coming for more, because it will be your responsibility as a top income earner to pay the lion’s share of the huge public debt.
Our tax professionals look forward to review your tax situation to keep your taxes to a minimum for this year and next. Saving taxes is the easiest way to put more money into your pocket.
