The reality behind common retirement myths

(NC) There’s no one-size-fits all approach to financial planning, particularly when it comes to retirement. Proper retirement planning should be personalized to set up a retiree for a comfortable and long-lasting financial future. To complicate an already complex topic, there are many myths around retirement planning that make it even harder for Canadians to understand how, when and what they need for their golden years.

“Canadians need confidence that their money will endure, and that retired life will be everything they dreamed of,” said Christine Van Cauwenberghe, head of financial planning at IG Wealth Management. “This requires a holistic plan, dependable advice from a financial advisor, and some myth-busting to meet retirement goals.”

Here are three of the most common retirement myths and the reality behind them.

Myth #1: RRSPs are a complete retirement plan
An investment plan is not a retirement plan. A Registered Retirement Savings Plan, known as an RRSP, is a tax-efficient strategy, but it is just one piece of the puzzle. Most Canadians rely on several income sources during retirement, including company pensions and dividends from non-registered investments. A real, comprehensive retirement plan will also include estate planning, life insurance and ways to reduce tax.

Myth #2: $1 million is enough to retire
While it’s handy to have a magic number, the million-dollar myth doesn’t account for varying lifestyle factors. A commonly used percentage for annual retirement withdrawals is four per cent; however, when combined with other sources of retirement income, this could be a miscalculation for some. Will you retire early? What retirement lifestyle will you lead? There are dozens of questions that complicate this myth.

Myth #3: Your cost of living will be lower in retirement
With fewer commuting costs and potentially no mortgage payments, retirement may seem affordable. In truth, many financial advisors suggest retirees plan to have as much as 80 per cent of their working income. Many retirees plan to travel, still have debt or a need to financially support adult children.

Find more information on retirement planning at or speak with an advisor.

Media Attachments Related Posts Terms of Use

All News Canada content is provided free of charge. Any source/sponsor of the information must also be identified as presented. For articles, credit of usage must be attributed to News Canada with "(NC)" at the beginning of an article or "" or "– News Canada" at the end. Images are only to be used with corresponding editorial copy. Usage of News Canada content constitutes your acceptance of these terms and an agreement between you and News Canada.

Disclaimer: Comments and opinions in News Canada content are those of their respective contributors only. The views expressed do not necessarily represent the views of News Canada Inc., its management or employees. News Canada Inc. is not responsible, and disclaims any and all liability, for the content of comments provided by contributors.