Are you saving enough to retire comfortably?
If you check your quarterly statements from Silver Thatch, you should have a pretty good idea of how much money you have in your pension account. But do you have any idea how much your savings might grow and what the balance of your account might be at age 65? Or whether you’ll have enough to retire comfortably? There’s an easy way to find out using the Retirement Calculator. All you need to do is key in a few basic inputs and… presto! The calculator will estimate how much money you could have at retirement – and tell you whether you’ll have enough to meet your retirement income goal.
Converting savings to income
When you get to retirement, there are three options for converting the money in your Silver Thatch account to a pension income. You can:
- use the balance to buy an annuity from an insurance company;
- transfer the balance to a retirement savings arrangement (RSA); or
- transfer your investments to a retirement income fund (RIF). For more information on these options, click here.
Estimating annuity income
To give you a rough idea of how much income might be generated if you used your savings to buy an annuity, we’ve created a simple table. (An annuity is a contract with an insurance company; in return for a set amount of money, the insurance company agrees to pay you an income stream for a set term.) The annuity amounts shown below are estimates for illustrative purposes only. They are based on standard annuity rates as of March 2013 and assume payments will begin in April 2013. As the table shows, the annual annuity income provided will vary based on a number of factors, including the amount annuitized, age at retirement, gender, marital status, and guaranteed term.
Remember, the table below is provided for illustrative purposes only, so you’ll have a better idea of how much money you’ll need to retire comfortably.
So how much money is enough? Most retirement planning experts suggest that you’ll need to replace between 50% and 70% of your employment income at retirement. This rule of thumb is based on the thinking that by the time you retire you’ll be pretty much debt free and won’t have work-related costs for clothes, tools, and transportation.
In reality, however, you may need more or less money, depending on your retirement lifestyle. So don’t take your eye off the ball. Monitor your savings regularly and plan for a financially secure retirement.