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Canadians Cut Their Retirement Savings Goal By More Than $200,000: RBC Poll

Stocks in this article: RY

TORONTO, Feb. 6, 2013 /CNW/ - Almost half (46 per cent) of retired Canadians and only one-in-four (23 per cent) Canadians who are not yet retired have determined the amount of money they will need for a comfortable retirement, according to the 23rd Annual RBC RRSP Poll. Those who are not yet retired have significantly reduced their retirement savings goal by more than $200,000 to an average of $564,000 in 2012 from $778,000 in 2011. Prior to retirement, retirees estimated that they would only need an average of $347,000.

The gender gap has significantly narrowed between men's and women's retirement savings goals, from a difference of $280,000 in 2011 down to $86,000 in 2012. Men had an average retirement goal of $732,000 in 2011, which fell 42 per cent to $424,000 in 2012, while women had an average retirement goal of $452,000 in 2011, which increased 13 per cent to $510,000 in 2012.

"When looking at your percentage of pre-retirement income needed in retirement, some say 75 per cent, some say 85 per cent and some even say 110 per cent - we say everyone is different," said Jason Round, head, Financial Planning Support, RBC Financial Planning. "While it's important to have a retirement savings goal, there isn't one number that's right for everyone. Your goals and dreams for retirement deserve a plan that's personalized to you and takes into account many other relevant factors."

The RBC poll also found that Canadians have had a relatively consistent view of how they are doing with their retirement savings over the past four years. More than half of Canadians (53 per cent in 2012) say they are at or ahead of where they should be in terms of retirement savings.

Round notes that using a rule of thumb approach in planning can be useful in getting started when retirement is many years away but, as retirement nears, averages are less helpful. There comes a point when you need to dig a little deeper and create a plan for you based on you and the reality you will face in retirement. For example, consider the following factors that will shape your retirement:

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