Charting Retirement is a weekly snapshot of retirement-related data.
Most Canadians believe that a retiree’s income needs tend to increase with inflation. Academic studies from Germany, Sweden, Britain and the United States indicate this is not true. Actual income needs do rise with inflation until age 70 but rise more slowly in one’s 70s and 80s. Once a retiree reaches age 90 or so, income needs once again rise with inflation. In the chart, inflation is assumed to be 5 per cent a year for 2023 and 2024 and then 2.2 per cent a year in future years.
(Source: The author’s book, Retirement Income for Life.)
Frederick Vettese is former chief actuary of Morneau Shepell and author of Retirement Income for Life.