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Planning for Retirement

Marcus and Ling

Marcus and Ling are married with no children. Marcus is 43 years old and Ling is 41 years old - both are seriously considering their twilight years and want to ensure that they can maintain their lifestyle and pursue interests, such as travelling, when they retire.

Marcus and Ling have tried to prepare as best they can for retirement: Both contribute to their RRSPs and maintain individual investment portfolios. So far, Marcus's RRSPs total $375,000, whereas Ling's RRSPs amount to $50,000. They both contribute $7,000 into their RRSPs every year and both have non-registered accounts. Marcus is a more active trader; his account totals $85,000 in taxable assets. Ling has $25,000 in her non-registered account.

Retirement Calculator

They would like to retire in 22 years with an annual after-tax retirement income of $50,000 (in today's dollars). To determine if this is possible, Marcus and Ling input their financial information in the
Retirement Calculator.

According to the findings of the Retirement Calculator, Marcus and Ling will face a retirement income shortfall, given their current situation. To help meet their goal, Marcus and Ling will have to increase their annual savings to non-registered accounts by $13,000. They should, of course, look to maximizing RRSP contributions first and rerun the Retirement calculator to see the effect on non-registered annual savings. Other "what-if" scenarios include reducing their retirement income needs or postponing retirement.

Next Steps

Marcus and Ling can consider a spousal RRSP or income splitting strategies, or use the Asset Allocation tool to determine the most effective investment plan for them based on their risk profile. They can also visit our Education Centre to see what other strategies may be suited for their investment plans. Marcus and Ling should also review and update their strategy periodically, which would include re-running all relevant Calculators.

The information contained herein is considered accurate at the time of posting. CIBC, CIBC World Markets Inc. and CIBC Investor Services Inc. reserve the right to change any of it without prior notice. It is for general information purposes only. Clients are advised to seek advice regarding their particular circumstances from their personal tax advisors.

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