# Retirement Contribution Question?



## BigMonkey (May 31, 2016)

Hello,

To those who are retired or near retirement. I was curious to know roughly what % of your pretax earnings did you save (including your employer contributions, your own, and your regular RRSP?) For example, if you had a employer who matched your contribution of 5% a year and you saved an 6% extra on the side. That would be 16% (5% + 5% + 6%) of your pretax dollars. 

In the end did you find your % contribution leave you with a good amount as you entered or are about to enter retirement? 
If you could do things differently, what would you do? Would your up % to have a little more now or reduce your % as your find your have more than you need now?


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## AltaRed (Jun 8, 2009)

It will be very different for different people depending on the curve of their earning power over circa 40 years. Those who did not save early, or did not have much in the way of earnings early, will be behind the 8 ball and will have to play catch up later presumably when their earning power has risen considerably. Rule of thumb is if someone puts away 10% of their earnings every year and invests it prudently, one can retire comfortably, or at least comfortably relative to their comparable standard of living pre-retirement. Those fortunate enough to rise to executive ranks or have a stock option plan (with stock that doesn't go the way of Nortel) might be able to save over 50% of their earnings (or more when they exercise their options). IOW, the responses are as different as there are people.


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## heyjude (May 16, 2009)

I did not have any employer contribution. I saved at least 20% of my pretax earnings every year. As my earnings rose, I tried to maintain a frugal lifestyle. No regrets.


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## carol palmer (Jul 12, 2016)

heyjude said:


> I did not have any employer contribution. I saved at least 20% of my pretax earnings every year. As my earnings rose, I tried to maintain a frugal lifestyle. No regrets.


Exactly same with my dad, he is very calculative and tries to save evrywhere he can


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## ian (Jun 18, 2016)

We always saved, but not necessarily in a retirement fund. When we were younger mortgage interest was considerably higher. I had a company pension that I did not have to fund and I maxed out our RRSP's. Additional saving went into eliminating our various mortgages as we relocated and acquired different homes. We shunned all forms of consumer debt.

Our income income increased substantially during the 15 years leading to retirement as did the percentage of income that we saved for retirement. Once our children were through their post secondary programs and out of the house our expenses dropped considerably.

So with us it was much more of a curve than a straight line. But for others, the straight line method may be best. I seem to recall reading somewhere that 12 percent was what was needed. Not certain if this percentage takes into account the lower investment return rates that are forecast for the next few years.


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## kcowan (Jul 1, 2010)

I saved 10% of gross and bought company stock for 15% off. Doing it again, I would take more equity in the portfolio and take some long shot risks. As it was, I got a few 10-baggers in the last 20 years as well as some stock to use as wallpaper.


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## ian (Jun 18, 2016)

I think the most important thing you can do is commence a structured program of savings/investment and if applicable, debt reduction. As the experts often say...pay yourself first.

As you income increases, expenses or debt level declines/eliminates, increase the level of savings/investment. Utilize all of the tax avoidance programs that are available to you.

The wild card is really the type of retirement that you envisage.


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## Karen (Jul 24, 2010)

I have never been as well off financially as I have been since I retired at age 63. I had never worked at a job that had a pension plan until I was in my early 40s, when I went to work for the federal government (and also when I was divorced). I had no savings to speak of either at that stage, but I did receive the marital home as my sole divorce settlement. Shortly after that, I made enough money from an employee stock option to pay off the mortgage on my house, and that meant I had enough income to start an RRSP and max it out every year until I retired, ending up with about $400,000 to put into my RRIF. When I started my government job, of course, I had a pension plan for the first time in my life. I later remarried twice and was widowed twice, but I have a small pension from each of my late husbands as well as my own public service pension, my RRIF income, my CPP, and a US social security pension. (One of my late husands was American, and I receive his Social Security pension as his spouse.)

So I don't really know what percentage of my income I was able to save during those last 23 years of my working life, but it was substantial, owing partly to having been able to get rid of my mortgage. I probably have more income than I need in retirement, but I have never regretted being frugal during my working years. There is no nicer feeling, as far I'm concerned, than being able to live my retirement years with absolutely no worries about running out money before I run out of life! And I loved having been able to help out my grandchildren with educational costs in several cases, and with setting up a small business in another, without risking running out of money myself.

So my advice would definitely be to err on the side of saving too much rather than risk saving too little.


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