Retirement Planning Basics — Building Your Future Income

Why retirement planning starts now

Retirement can last 20–30 years. The earlier you start saving, the more compound growth works in your favour. Waiting 10 years to start can cost you more than doubling your monthly contribution ever could recover.

How much do you need?

A common estimate: multiply your desired annual retirement income by 25. Want $50,000/year? Aim for $1.25 million. This comes from the 4% rule — the guideline that withdrawing 4% of savings annually is often sustainable for about 30 years. Use the Retirement Calculator to project your specific number.

The three buckets of retirement income

Most people's retirement income comes from three places: government pensions (Social Security, CPP), employer plans (401k, RRSP, pension), and personal savings (investments, savings accounts). Understanding all three lets you plan the gaps — not every retiree has all three.

Inflation quietly shrinks your nest egg

Inflation means $1 million in 25 years buys less than $1 million today. Your savings target should account for rising prices — especially in healthcare, which tends to inflate faster than the general rate. Build in a buffer.

Mini‑calculation: retirement income estimate

If you want $60,000/year in retirement, multiplying by 25 suggests a target of $1.5 million. Use the Retirement Calculator to see how contributions, returns, and time affect your path to that number.

Start small, increase consistently

Even saving 5% now and increasing by 1% each year puts you dramatically ahead of doing nothing. Small, consistent contributions plus time and compound growth are the combination that builds real retirement security.

// Glossary Highlights

4% rule — a guideline for sustainable withdrawal rates.
Compound growth — growth on top of growth.
Annuity — a product that converts savings into regular payments.
Inflation — rising prices over time.

// FAQ

Q: When should I start saving for retirement?
A: As early as possible. Even small contributions made consistently over time benefit from compound growth.

Q: Is the 4% rule guaranteed?
A: No. It’s a guideline based on historical data. Your actual safe withdrawal rate depends on market returns, inflation, and personal circumstances.

// Key Takeaways

Starting early dramatically reduces the pressure later.
The 4% rule is a helpful planning anchor, not a guarantee.
Inflation must be factored into long‑term targets.
Small, consistent increases in savings add up over decades.

// Next Steps

Run your numbers with the Retirement Calculator. Then explore how investing supports your plan using the Investment Growth Calculator.