(NC) -Two is better than one when saving for retirement, according to research by Russell Investments Canada.
"Single retirees can have a very financially healthy retirement, with the right planning and advice. But it certainly helps to be working in tandem with a partner when saving for your golden years," says Fred Pinto, a managing director at Russell Investments Canada.
Pinto uses Russell's "Retirement Rule of $20" to show how couples can save together towards a financially secure retirement. The Rule of $20 states that for every dollar of annual income that you expect to need during your retirement, you need to have saved $20 by the time you retire, without inflation indexing. For example, a couple heading into retirement with $400,000 of registered savings can expect it to generate $20,000 a year in retirement income.
"Combine that with an estimated $25,000 of Canada Pension Plan, or CPP, and Old Age Security, or OAS, and this couple is looking at a yearly retirement income of approximately $45,000," says Pinto."For those who fall short of a $400,000 portfolio, you're going to require $20,000 of income from your own savings a year to maintain close to that $45,000 in annual income. This is where couples can combine their registered retirement savings, tax-free savings accounts and non-registered accounts in order to produce a viable income source in retirement."
More information about the $20 Rule can be found at www.myfinanciallyhealthyretirement.com.
