When planning for retirement, it is important to estimate where your sources of income are coming from. You would also need to determine how much you expect to spend. Take a look ath list below, try to estimate how much you would get and need.
Sources of Income (assuming age 65 and above and maximum benefit as of July 1, 2017):
Canadian Pension Plan (CPP) per month:1,114
Old Age Security (OAS): 584
Total CPP and OAS 1,700
Guaranteed Income Supplement (GIS) if applicable: 524.85 maximum
Defined Benefit (DB) Pension Plan if applicable
Dividend or interest income from investment portfolio
Part-time work if applicable
Monthly Expenses for 1 assuming frugal lifestyle:
Housing, transportation, food, clothing, and misc (basic lifestyle): (1,700)
Add: another $800 for travel, dining and other lifestyle needs
If your sources of income exceeds your expenses, congratulations!
If your only sources of income consist of CPP and OAS (total $1,700), you may be able to still afford a minimalistic lifestyle (Expenses = $1,700). I know I can live like a King! In addition, there are other social benefits that one can qualify at that income level, which would include GIS, hydro rebate, Ontario Trillium drugs and healthcare benefits and others.
This just goes to show that you should not just blindly be led to believe that you need $1 million dollars in the bank to be able to afford to retire. But of course, we want to retire and travel the world, and live in luxury! This is when the extra planning and savings during your working years will pay off in the latter years.
Saving an extra $100 per month for 40 years assuming a 5% annual return would provide $150,000. The same $150,000 when used to buy an annuity from a life insurance company would provide a monthly income of almost $700.
Alternatively, find a job with the government (local, provincial or federal), work for 30 years, and you can qualify for at least a $4,000 a month pension for life! In order to receive $4,000 a month at retirement, one would have to save almost $800,000 lifetime and use the amount to buy an annuity to generate the same $4,000 income. I know what I will do. Hope you do as well. Problem solved! And good luck getting the public servant job unless you know someone internally.