The Good Life
If you’re like most Zoomers, you have big plans for your so-called retirement. Maybe you want to travel or finally buy that second home – whatever your dream is – in all likelihood, it does not involve downsizing your lifestyle. According to Fidelity Investment’s Canadian Retirement Survey, two-thirds of baby boomers intend to maintain their standard of living in retirement – and some even plan to increase it. But there’s a caveat. Peter Drake, the company’s VP of economic and retirement research says most of us haven’t saved enough to cover those increased costs.
“Traditional wisdom said: ‘If you replace 60-70% of your pre-retirement income, you’ll be fine’ – but traditional wisdom said: ‘well your expenses will come down, your house will be paid for, you’ll probably downsize your house, your kids will be educated, and you won’t be terribly active.’ I don’t think that applies now, so we actually did the math amd you need to replace between 75-85% of your retirement income. That will allow you to maintain the same total level of spending in retirement as you spend pre-retirement.”
The bottom line most of us have to save more now.