CHARTING YOUR COURSE TO RETIREMENT

To illustrate how to use the chart, Wiginton, 42, uses himself as an example:

We plan to retire when I am 60 years old and live to be 95. 1. We will travel regularly, sail a boat, volunteer in my community and spend time with my family. 2. This will cost us about $100,000 a year. 3. We currently spend $156,000 a year. 4. We will no longer be paying for a mortgage, life insurance, daycare or retirement saving. This will reduce our spending by $80,000 ($18,000 mortgage, $25,000 life insurance, $12,000 day care, $25,000 retirement savings). We will increase our spending by $15,000 for travel and $15,000 for boat operations. 5. Once we are over 80 we will reduce the travel and boating signif- icantly. (This should offset the increase in cost of living for our entire retirement period.) 6. We will have gross income of $70,000 coming from company pension, CPP, OAS. After tax this would be about $60,000. 7. $100,000 - $60,000 = $40,000 8. Live for 35 years in retirement 9. Table says I need to save $746,000 (based on a 4-per-cent average annual rate of return)