A generation ago, having a million dollars in the bank was the gold standard for financial security.
Today, with employer-sponsored defined benefit (DB) pensions becoming increasingly rare for younger workers, you may need at least that much stashed away in an Registered Retirement Savings Plan (RRSP) to have any chance of the retirement you want.
After all, even if you can generate a consistent 5 per cent annual return on your investments, a $1 million RRSP would generate just $50,000 a year in income, and that will be taxed once you start withdrawing it (either in the form of a Registered Retirement Income Fund or RRIF, or via voluntary withdrawals from your RRSP).
The good news is that if you’re just starting out your career and have begun to embark on a consistent program of saving and investing, getting to a million or beyond before you end your working years is not as hard as it sounds. And there is more than one way to get there.