EDITORIAL – Want to retire? Make sure you have $1.7 million in the bank

An editorial by Mel Rothenburger.

HOW MUCH do you think you’ll need to retire?

Maybe the real question should be, how long do you think it will take you to store away $1.7 million in retirement income?

That’s what Canadians think they’ll need, according to a BMO survey you’ve probably heard about in the news this week.

The number is based on pessimism about the economy and inflation. Two years ago, they pegged the number at $1.4 million. Since then, prices have risen dramatically, outpacing wage increases.

Across the country, only 44 per cent of Canadians are confident they’ll have enough to support themselves and their families when they get the gold watch and directions to the exit.

Some say the new estimate is based more on a sense of pessimism than it is on reality. But about 15 years ago, I asked an investment advisor how much I’d need in the kitty to retire. His answer was $2 million.

I laughed, more out of astonishment than mirth. But it’s no laughing matter for anyone who’s edging toward the dreamed-of retirement date, whether it be 55 or 65 or higher. Canada Pension Plan and OAS are little more than pocket change compared to what’s needed to live on.

Company pensions are often inadequate as well. That means we’re faced with paying out the mortgage as quickly as possible and stuffing away a healthy percentage of every paycheque in investments that will, when the time comes, turn into a RIF.

For young and old, it’s hard to even find a decent place to rent that’s affordable, let alone one they can buy.

Taxes keep going up as governments pile compounding increases onto their budgets year after year. For those who like to eat and stay warm, life is more of a challenge than ever before.

So what to do? We could sell our homes and live on the street… or move to Alberta.

The choices aren’t inviting.

I’m Mel Rothenburger the Armchair Mayor.

Mel Rothenburger is a former mayor of Kamloops, alternate TNRD director and a retired newspaper editor. He is a regular contributor to CFJC Today, publishes the ArmchairMayor.ca opinion website, and is a recipient of the Jack Webster Foundation Lifetime Achievement Award. He can be reached at mrothenburger@armchairmayor.ca.