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By Stefania Di Verdi on June 19, 2012
Estimated reading time: 1 minute

Retirement revamp

By Stefania Di Verdi on June 19, 2012
Estimated reading time: 1 minute

If you're hell-bent on retiring at 62, you'll need to set aside roughly 24% of pay. A tall order for most nowadays.

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Fred Vetesse, chief actuary at Morneau Shepell, makes an interesting case in his latest report. If you’re hell-bent on retiring at age 62, you’ll need to set aside 24% of pay. A tall order for anyone nowadays. And that’s for a modest nest egg equivalent to 50% of final year’s pay. “Maybe we are looking at this problem the wrong way,” Vetesse says. “Rather than saving more so that we can keep retiring early, we may be better off saving the same percentage as we do now, or even less, and reconciling ourselves to retiring later.” The economy would probably benefit too, he argues.
It turns out the 1% may actually have something in common with the 99%. The rich actually lost money in 2011, according to the World Wealth Report from Capgemini and RBC Wealth Management. The combined wealth of the globe’s high net-worth individuals (HNWIs) shrank 1.7% in 2011, to $42 trillion US from $42.7 trillion US a year ago. It’s the first decline since 2008 when global wealth fell 19.5%.
A new poll by TD Canada Trust suggests young people are eager to take advantage of credit card benefits to rack up points towards travel and other purchases (60%), build their credit rating (59%), track spending (36%) or manage cash flow (28%). The problem is many are engaging in some bad, not to mention counter-productive, behaviours. Half of 18-24 year-olds surveyed are not paying their credit card balance in full at the end of the month with 40% only making the minimum monthly payment. At 19.99% interest, paying only the minimum monthly payment on a $2,000 balance will take seven years to pay off and cost $4,000. Here’s a friendly reminder from the bank:

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