Retirement Nestegg Calculator
Do you know how much it takes to create a secure retirement? Use this calculator to help determine what size your retirement nestegg should be.
By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.
Definitions
Current age: Your current age.
Age at retirement: Age at which you plan to retire. This calculator assumes that the year you retire, you do not make any contributions to your retirement savings. For example, if you retire at age 65, your last contribution occurs when you are actually age 64. This calculator also assumes that you make your entire contribution at the end of each year.
Gross annual income: Your total household income. If you are married, this should include your spouse's income.
Current retirement savings: Total amount that you currently have saved toward your retirement. Include all sources of retirement savings such as RRSPs and Annuities.
Rate of return before retirement: This is the annual rate of return you expect from your retirement savings and investments. This should also be an after-tax rate of return if the majority of your retirement savings is not in a tax-deferred account. The actual rate of return is largely dependent on the type of investments you select. For example, the total return including dividends of the S&P/TSX Composite Index for the 10 year period from December 31, 2010 through December 31, 2020 was 5.9% (source spindices.com). Savings accounts at a bank or credit union may pay as little as 2% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
Rate of return during retirement: This is the annual rate of return you expect from your investments during retirement. This should also be an after-tax rate of return if the majority of your retirement savings is not in a tax-deferred account. This rate is often lower than the return earned before retirement due to more conservative investment choices to help insure a steady flow of income. The actual rate of return is largely dependent on the type of investments you select. For example, the total return including dividends of the S&P/TSX Composite Index for the 10 year period from December 31, 2010 through December 31, 2020 was 5.9% (source spindices.com). Savings accounts at a bank or credit union may pay as little as 2% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
Expected income increase: Annual percent increase you expect in your household income.
Years of retirement income: Total number of years you expect to use your retirement income.
Pre-retirement income desired in retirement: The percentage of your pre-retirement household income you think you will need in retirement. This amount is based on the household income earned during the year immediately before your retirement. You can change this amount to be as low as 40% and as high as 160%.
Expected rate of inflation: What you expect for the average long-term inflation rate.