How to get what you need in retirement

This infographic provides an example of a 25 year old whose salary when hired is $40,000. It is estimated that when she retires at age 60 she'll be earning $95,000. If we take what experts estimate you'll need to live comfortably in retirement (70% of salary at retirement per annum) she'll need $66,000 a year. If we assume she'll live for 20 years in retirement, she'll need to have a total income of $1,360,000 at her retirement date. See what a difference a workplace pension plan makes!

The first column shows how to get what you need in retirement if you don’t have a workplace pension plan. The Canada Pension Plan will provide approximately $575,000 and Old Age Security will provide roughly $230,000. She will need to save an additional $555,000 through RRSPs, TFSAs or other methods.

The second column shows how to get what you need in retirement if you have a workplace pension plan. The Canada Pension Plan will provide approximately $575,000 and Old Age Security will provide roughly $230,000. Her workplace defined contribution (DC) pension plan will have an estimated $430,000 based on 10% of salary contribution per year (5% from employer and 5% from employee) and a 2.5% salary increase per year. She therefore only needs to save an additional $125,000 through RRSPs, TFSAs or other methods.