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portfolio strategy

Could you be persuaded to spend as much time planning your retirement as you did organizing your last vacation?

In the hope that your answer is yes, the Portfolio Strategy column presents this Retirement Readiness Worksheet.

Make your way through it and you'll end up with either a sense of confidence that your finances are ready for retirement, or that you need to take things in hand by saving more, rethinking your retirement age, changing your investment approach or consulting a financial planner for help.

Let's look at some key retirement planning questions, and the online resources that will help you find answers.

How long might I live?

Website: Living to 100 life expectancy calculator

This site was set up to promote a book of the same name, and you have to supply your e-mail address to get your results. The payoff is one of the most detailed life expectancy assessments you'll find online. There are questions about such things as stress, family medical history, oral care, use of sunscreen and consumption of red meat, processed food and more.

A shorter but still useful lifespan calculator is offered by the U.S. insurance company Northwestern Mutual. You'll like the way this calculator keeps updating your expected lifespan as you work your way through the questions it asks.

What's a reasonable rate of return for my retirement investments?

Website: PWL Capital's market statistics page

This money management firm reliably publishes monthly updates on all the benchmark stock and bond indexes of interest to mainstream investors. Use the 20- or 30-year data to create a gauge for your RRSP (see sidebar). Remember to deduct investment and any advice fees from these returns.

What's a realistic estimate of inflation?

Website: The Bank of Canada's inflation calculator

The database goes back to 1914 and shows an average annual inflation rate of 3.1 per cent. Be cautious using the five- , 10- and 20-year numbers, which show inflation running below 2 per cent. Inflation will snap back, eventually. Curious how inflation will reduce your purchasing over the years? Check out this inflation calculator offered on

What can I expect from all my sources of retirement income?

Website: Canadian Retirement Income Calculator

A great example of your tax dollars at work: This has to be one of the best online resources the federal government has produced. This calculator takes you through Old Age Security, the Canada Pension Plan, any company pension plans you're part of and your own retirement savings and then projects an annual retirement income as a percentage of your current income. A weakness is that there's no option to add your own life expectancy. It appears that a default lifespan number based on your birth date is used. This calculator is also useful for assessing the benefits of delaying CPP and OAS benefits after age 65.

How can I zero in on my RRSP's financial health?


This easy-to-use calculator asks you to provide details on your RRSP, investment return expectations and projected lifespans, then shows how much annual income you would expect. You can easily adjust numbers like your retirement age to check out different outcomes.

How will my income needs change in retirement?


This is a simple single-page form that lets you compare current and postretirement spending on all major household expenses. It's a basic assumption in retirement planning that you'll spend less than in your working years. Here, you get a sense of how much less.

How much should I be saving?

Website: Fiscal Agents

This calculator asks you to do an inventory of your retirement savings and then add your target retirement income. If there's any shortfall, you'll find out here how much extra you need to save. Note: Have the latest statement on your company pension benefits handy.

How long will my money last?

Website: Ben Barkow's retirement cash flow calculator: This is a previous column I wrote to introduce a retirement cash flow spreadsheet created by Dr. Barkow, a behavioural psychologist. Plug in your estimates of inflation and investment returns and it shows you on a year by year basis how your savings will hold up. offers an online calculator that lets you make a simple side-by-side comparison to see how long your money would last using two different scenarios.

What's my tax rate now, and what might it be in retirement?

Website: calculator

This is a a very detailed calculator that looks a lot like an income tax return. Add all the required numbers and you'll find the dollar amount of tax you're now paying and your average tax rate based on taxable income.

When you're done, use the retirement income estimate you got from the Canada Retirement Income Calculator and see what your average tax rate in retirement will be. A lower tax rate in retirement than in your working years suggests you'll get good value from contributing to an RRSP as opposed to a TFSA.

For a more streamlined estimate of your current and projected future tax rates, try the Ernst & Young tax calculator . E&Y also offers a calculator to see how much of a tax break you'll get by making an RRSP contribution.

Would I be better off paying down debt than saving for retirement?

Website:, RRSP vs. Mortgage calculator

The age-old question is getting asked a lot these days by people who have bought houses in today's pricey market and are feeling smothered by their mortgages. The age-old compromise answer is to invest in an RRSP, then use your tax refund to pay down your mortgage.

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