How Many Pay Cheques to Retirement?
How many pay cheques do you have left before you retire? To find out, multiply your number of working years left before you retire, by how often you receive your pay cheque; for example 27 years x 12 months = 324 pay cheques. My personal number was my wake-up call and may be for you too.
How Many Pay Cheques Do You Need in Retirement?
In determining how many pay cheques you will need during retirement, consider several factors, such as: future medical expenses; preferred retirement lifestyle; and life expectancy. If you expect to enjoy many retirement years, for example, 25 years, then your retirement savings should allow you to cover at least 300 retirement pay cheques (25 years x 12 months = 300 pay cheques).
Increasing Your Number of Pay Cheques
If you recognize that you will need additional income, challenge yourself to increase the number of pay cheques you have left, by:
1. Extending your retirement age; perhaps by an additional 5 years = 60 pay cheques (12 months x 5 years).
2. Earning more: You may not be able to immediately double the number of pay cheques for the year, but start by increasing by one paycheque and then continue increasing by as many as possible, by:
• earning from your talents and expertise;
• getting a second job or seeking a higher paying job;
• investing in rental property;
• investing in financial options that beat inflation, such as JMMB’s Optimum Capital and Income and Growth (unit trust) Funds which gave returns of 11.5% and 19.3% respectively over a 5 year period (January 2013 –January 2018)*; and
• investing the maximum allowable in your pension plan. The JMMB Retirement Solution, allows you to invest up to 20% of your gross income.
Remember, you will have one less pay cheque by month end. Are you ready for your retirement? Call 998-JMMB (5662) and JMMB will help you to maximize the number of pay cheques you have left, before you retire, so that you can be prepared to enjoy your retirement.
*Past performance of unit trust is not a guarantee on future performance.
Written by: Michelle Sinclair-Doyley, Manager, Client Financial Education, JMMB Group