Saturday, June 30, 2012

Retirement Income Objective

3:41 PM



Question:

I have inserted a retirement expense objective of $33K. The client is 63 years old and retired with only an RRSP portfolio to draw from.

For some reason, in the first year only, the objective is doubled to $66K and thus there is a large withdrawal from the registered portfolio.

How do I fix this issue?

Answer:

The first year of retirement may be only for a few months. So the objective would reflect employment income up to the month of retirement, and a portion of the $33,000 for the month remaining in the year. Also, when the retirement year is in the future, the objective of $33,000 is in terms of "today's dollars", which means it will be indexed between the current and retirement year.

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