To plan your retirement properly, start by estimating the income you will need after you retire. Here are three ways:

1.    Use a simple guideline based on what you make now.
One simple guideline is that after you retire, you will need between 60% and 80% of what you earned in the years right before retirement. The closer you are to the 80% mark when you retire, the more comfortable you will likely be after you retire.

2.    Look at what the research tells you.
Statistics Canada has found that "from 1996 to 2006, the average after-tax income of married elderly couples rose 18%, from $40,900 to $48,300." Check out the findings related to health, leisure activities and finances here.

3.    Make a detailed budget.
Here you write down exactly what you think you will spend each month on housing, food, entertainment, health, gifts, and other expenses, and then add it all up.

Ready to budget now? Try this: Retirement Budget Worksheet (view PDF or Microsoft Word file).

Just remember, unless you work out a budget, you’re not getting a very accurate estimate of the income you need. To get a truer estimate, there are a number of factors to consider.


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