What do you fear about retirement?

Oct 23, 2009

How Much Retirement Income Do Retirees Need to Retire Comfortably?


Conventional wisdom in the financial industry says that people need about 80 percent of their pre-retirement income to be comfortable after retiring. Some financial advisors are now raising this to 90 percent, even 110 percent of pre-retirement income.


In my opinion, this is ridiculous. In my book How to Retire Happy, Wild, and Free, I give eight reasons why, generally speaking, people should get by with 65 percent of pre-retirement income.


In fact, highly respected Canadian actuary Malcolm Hamilton says the true number is closer to 50 per cent.


Hamilton points out that the investment industry has a vested interest in telling people that they need a high retirement income because the retirement income and most of them seem quite satisfied with their financial circumstances after they retire," Mr. Hamilton says.

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