Retirement can be an exciting time filled with new adventures and unlimited free time, but it also requires careful planning in terms of finances. In particular, having enough retirement capital is essential for living comfortably and maintaining your desired lifestyle. In Canada, this is becoming an increasingly important issue as the population ages and life expectancy rises.
One of the main reasons retirement capital is crucial in Canada is the fact that the government pension plan may not be enough to sustain you. While the Canada Pension Plan (CPP) and Old Age Security (OAS) are helpful sources of income during retirement, they may not cover all your expenses. It is important to have additional savings and investments to provide a steady stream of income. This is especially important in major cities where the cost of living tends to be higher, making it necessary to have a larger retirement fund.
Furthermore, the ideal retirement age in Canada is gradually increasing, adding more pressure to have enough retirement capital to last you throughout your later years. With the average life expectancy being around 80 years old, retired individuals may have to plan for over 25 years of living without a steady income from a job. This makes it even more important to have a solid retirement plan in place that includes a diverse portfolio of investments, such as retirement savings accounts, stocks, and mutual funds.
In conclusion, retirement capital is an essential aspect of
