Counting on the government, is that realistic?

Counting on the government, is that realistic?

For most taxpayers, government retirement plans will cover less than half of their retirement needs. Don’t believe it?

See for yourself…

Frank is a 40-year-old who has never contributed to an RRSP. He works for a private company; his gross annual income is $50,000; and he’s convinced that when he hits 65, his government annuities will be enough for a comfortable retirement.

To maintain his lifestyle, he’ll need at least $35,000 per year, which is 70% of his current gross income. In today’s dollars, the government annuities to which he’s entitled will only pay him $16,000 a year! Bye-bye beautiful retirement projects… in order to meet his financial needs, he will need $19,000 a year from personal savings – some 120% of the amount he’s getting from the government. Someone’s going to be in for a very unpleasant surprise unless those RRSP contributions are made!

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