This calculator is designed to help you prepare for retirement by giving you some idea of what your financial future might look like. Please note that all calculations and estimates are for illustrative purposes only and are not a guarantee. Your actual retirement income, the age for which your savings are projected to last and the estimated contribution percentage may be higher or lower depending upon the actual performance of your investments. Please note as well that this retirement calculator does not take into account the tax treatment of your savings nor the taxes that may be owed on amounts paid to you. It is recommended that you consider speaking to a tax advisor.
When forecasting your retirement income, be sure to consider the additional income you may receive from other sources, including but not limited to government-administered plans such as the Canada Pension Plan (CPP), Old Age Security (OAS) and the Guaranteed Income Supplement (GIS). If you need assistance finding these numbers, feel free to speak to an Open Access Client Relations Representative at 1-(866) 625-4777.
Please remember that there are many factors that come into play in calculating the monthly income you can or may wish to draw during your retirement, such as life expectancy, investment returns, and inflation. You’ll notice that some of the questions are about events that will take place in the future, in some cases a long time in the future. This means that the numbers turned out by this calculator, while insightful, are for illustrative purposes only and may not be accurate. Neither Open Access nor any of its employees or representatives are providing legal, tax, or financial advice.
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Age:*
SAVINGS AND CONTRIBUTIONS:
Current Savings:*
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Current Annual Earnings (pre-tax):*
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Expected Annual Salary Increases:*
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Expected Retirement Age:*
If you are already retired, please enter your current age.
Expected Investment Return (net of fees):*
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Below is an illustrative list of average net-returns for varying investment types. These range from very aggressive investment strategies consisting primarily of equities to very conservative strategies consisting primarily of fixed income. Note that the returns are not reflective of Open Access’ historical portfolio returns but are based on illustrative examples of different investment types. As always, keep in mind that past performance is not reflective of future performance.
It is important to note that the higher your equity exposure, the more volatile your portfolio will be. And so while aggressive investment strategies (i.e. CAP 8/9) can produce strong investment returns over the long term, market fluctuations have the potential to severely impact the size of your savings in the short-term. This may be particularly notable if you may need to use the savings in the near future, for example if you are approaching retirement.
Please note that the comparisons to the Open Access CAP portfolios are for informational purposes only in order to provide an illustration of the different potential investment returns based on investment types. The underlying asset composition and investment philosophy of the investments listed above should not be viewed as identical to Open Access’ strategies.
(1) Net returns are based on an average of the 5 year, 10 year, and 15 year returns as of May 31, 2019.
(2) Morningstar’s Canada OE Global Equity
(3) Canada OE Global Equity Balanced
(4) Canada OE Global Neutral Balanced
(5) Canada OE Global Fixed Income Balanced
(6) Canada OE Global Fixed Income
Expected Inflation:*
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As prices increase, the purchasing power of your retirement dollars decreases. Over time this can have a dramatic effect on your standard of living during retirement. In the period from 1926 to 2018, the average annual increase in the Consumer Price Index (CPI) has been 2.99%. However, during these years the increase in the CPI reached an annual high of 14.43% and a low of minus 10.23%. So it is volatile and can have a serious negative impact on one’s retirement years if one has not adjusted for inflation. Just consider the effect of a 3.00% per annum increase in CPI over an extended period. The person who retires at age 65 on a pension of $4,000 per month, by the time they reach age 95, would need a pension of about $9,800 per month just to purchase the same things they purchased when they first retired.
Our recommendation is that you use the average annual inflation rate of 3.00%, and that you re-run the retirement calculator every couple of years as you approach retirement.
ENTER TWO OF THE FOLLOWING:
Desired Monthly Retirement Income (pre-tax):
$
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This is the amount you can expect to draw from your fund based on provided values and assumptions.
Your desired monthly retirement income should be entered in today’s dollars as the calculator will consider the inflation rate you entered above and produce an estimate as of your projected retirement date in today’s dollars. Similarly, if you are looking to obtain an estimate of the monthly retirement income, the calculator will produce an estimated value based on today’s dollars.
Note that the Monthly Retirement Income does not include CPP and OAS payments.
Estimated Life Expectancy (yrs):
The money in your fund is projected to last until this age based on provided values and assumptions.
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To determine how much capital you may need in retirement, you should forecast how long you are going to live. As you would expect, the longer you live the more savings you will require, as you certainly do not want to run out of money during your lifetime.
While it is not possible to determine how long you will live with accuracy, you may want to consider various factors such as how long your parents/grandparents lived, your overall health, diet, fitness, etc. There are many online sources you may consult that attempt to forecast life expectancy based on these and other factors, but such sources should be looked at for guidance only.
Annual Contributions to your Retirement Fund: (as a % of your pre-tax annual earnings)
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This is the contribution % that would need to be made to your retirement fund to achieve the desired retirement income based on provided values and assumptions.
The Open Access Limited Retirement Calculator estimates your retirement savings over time based on the accuracy and completeness of the information you enter and on the future accuracy of certain assumptions. The results are intended for illustrative purposes only and not a guarantee. Neither Open Access nor any of its employees or representatives are providing legal, tax, or financial advice. Your actual retirement income, the age for which your savings are projected to last and the estimated contribution percentage may be higher or lower depending upon the actual performance of your investments.
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Summary
As we progress through life, our circumstances and the world around us changes; that is why it is a good idea to do an annual check-up on the Retirement Calculator. As you get closer to your retirement date it is important to verify the assumptions you have used for investment returns, inflation, and life expectancy. And most important of all is the size of your retirement savings as it will have the greatest impact on your financial well-being during retirement.
Assumptions:
All contribution and payout amounts are in pre-tax dollars
Registered Retirement Savings Plan (RRSP) contribution maximum limits and Registered Retirement Income Fund (RRIF) withdrawal minimums are ignored
Any OAS and CPP benefits that you may be eligible for are not considered in the income amounts
