Like seeing a woman with way too much makeup on, the results produced by many online RRSP calculators freak me out.
Have you ever seen the math these calculators tell you? It can be rather shocking not to mention depressing. Here’s my example. I’m currently trying to contribute about $200 per month in my RRSP. I think that’s pretty decent.
Using this online calculator, making the following assumptions:
I get the following results:
I’ll need $1.4 million for an annual income of $48,500 in future dollars to meet my retirement objective?
There is no way I can afford an extra $700 per month right now to meet my long-term RRSP objective. I’d rather be out of mortgage debt. I’d rather pay off my line of credit. I’d rather put some money into dividend-paying stocks like Bank of Nova Scotia and Fortis.
This math leads me to ask the following questions:
1) Based on my monthly RRSP contributions, should I be concerned?
2) Are my assumptions realistic?
3) What should I take away from these results?
Like most other 30-somethings, I’ve got plenty of bills to pay and a life to live. It’s not possible nor realistic nor fun to save or invest everything. These calculators freak me out!
How about you?
I look forward to your comments!