4 Ways to Calculate What You Can Spend in Retirement

Are you wondering how much you can spend in retirement? If so, you’re not alone. In our latest video, we tackle this crucial question and provide 4 ways to calculate what you can spend in retirement.


The First Step

The first step in planning your retirement is understanding the Triangle Concept. This involves identifying when you want to retire, assessing your income sources and assets, and projecting a rate of return on your investments.


Option 1: The 4% Rule

One popular but cautious method is the 4% rule, which determines a “safe” annual withdrawal from your retirement portfolio. However, this rule has limitations, overlooking factors like investment strategy and taxes. We rate this option a 1 out of 10.


Option 2: Excel

For a more tailored approach, you can create your financial plan using tools like Excel. Although this requires time and attention to detail, a well-executed plan can be a 7 out of 10. However, errors in calculations or overlooking variables like taxes can lead you astray, making it a riskier option.


Option 3: Advanced Calculator

An alternative is using an advanced calculator, which provides a middle-ground solution. It may lack the customization of professional planning software but can handle the basics. Here is a link to an advanced calculator. We rate this option a 6 out of 10.


Option 4: CFP

Finally, the most comprehensive choice is consulting a Certified Financial Planner (CFP). A CFP has access to top-notch planning software, offering extensive customization and accounting for all variables, including taxes and inflation. However, not all CFPs are the same. Finding a specialist in your specific financial needs is crucial. We rate this option a 10 out of 10 with the right planner, but a 5 out of 10 if the CFP lacks expertise in your area.


In conclusion, planning for retirement involves careful consideration of various factors. While there are different methods to determine your retirement spending, consulting with a Certified Financial Planner specializing in your specific needs is likely the most reliable option.


A Personalized Approach to Retirement Planning

To take control of your retirement finances and optimize your tax savings, click here to access our retirement withdrawal questionnaire. It takes just five minutes, and you’ll receive a personalized video from me with strategies tailored to your unique situation.

Marc Sabourin is a Winnipeg-based Financial Advisor and Retirement Specialist with Harbourfront Wealth Management. His specialty is working with pre-retirees and retirees who are looking for retirement, investment, & tax advice. 

Disclaimer: The views expressed are those of Marc Sabourin, Certified Financial Planner, and Investment Advisor, and not necessarily those of Harbourfront Wealth Management Inc., a member of the Canadian Investor Protection Fund

20 Retirement Tips

When entering retirement or having recently retired, these 20 tips should be considered. A thorough retirement plan will touch on all 20.

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