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Retirement Planner

  Before You Begin

How much should I save? Will I have enough for retirement? How should I invest my money? These questions will become increasingly important, as we get closer to retirement.

Company pensions make it possible to save in an effective manner, but you need to understand how to invest your money and how much to contribute to live comfortably for the rest of your life.

Deciding on the lifestyle you wish to have during retirement is the most important step of this process. Everything you will do to carry out your action plan will go toward achieving the financial goals required to live the retirement lifestyle you want.

Experts in financial planning believe that you will need 70% to 90% of your pre-retirement income during retirement in order to maintain your lifestyle. This is because during retirement your living expenses may be lower: the mortgage is often paid, children have completed their education and left the home and there are no longer work-related expenses. However, you will need to factor in the impact of inflation and health related expenses which may increase over time.

If you are married, both partners should complete the Retirement Planner in order to reflect total household income.

Documents Required

Below is a list of some of the documents that may be useful in helping you complete the Retirement Planner. In many cases, using approximations should be adequate for the purpose of completing the retirement planner.

  • Annual employment earnings
  • Recent financial statements of all investments earmarked for retirement
  • Statement of employer defined benefit pension plan (if applicable)
  • Pension statement (if applicable)

Personal Information

Current Age  
 years

Gender
    

Retirement Age  
 years

 

Length of Retirement  
years

Annual Earnings  
$ 

Annual Expected Earnings Increase 
 %

  Background Information

Planning retirement is also planning your wealth. And it's never too early to be wealthy! By having a formal financial plan in place and saving regularly, you are much more likely to achieve your financial goals.

Your plan will be built around your personal situation: when you wish to retire, your earnings, existing investments, monthly savings, investor profile and personal goals.

The calculation results will clearly identify any shortfall you may have toward your retirement goals and the corrective action you can take, such as saving additional amounts to increase your chances of attaining your goals.

Complete the information on each tab and click the Update Results button when you have provided all of the required information to see your action plan.

My Assets

Current Account Balances

Company Pension Plan   
$ 

Individual Pension Plan 
$ 

Monthly Scheduled Savings

Company Pension Plan   
$ 

Individual Pension Plan 
$ 

Future Lump Sum

Amount  
$ 

Year anticipated

  Background Information

In order to plan your future, you need to know where you are today. Enter your current account balances for all company and individual pension plans and monthly scheduled savings to these accounts.

You can also include other assets that you expect to receive in the future, such as a lump-sum payment or inheritance.

My Future Income

Social Insurance Pension

  

$ 

Other Company Pension

Monthly Amount  
$ 

Commencing at Age
 years

Other future Income

Monthly Amount   
$ 

Starting in Year 

Ending in Year

  Background Information

Enter the monthly amount you expect to receive from the Bermuda Social Insurance Pension.

If you are in a defined benefit pension plan, enter the expected monthly amount and the age on which you plan to start receiving the pension. You can also include other income you expect to receive during retirement, such as a part-time or contractual income, or rental income.

My Future Lifestyle

Select Your Annual Retirement Income Goal

 

 
 % 

 $  

Select How You Will Use Your Account Balance at Retirement

 


  Annuity Payment Options

Annual withdrawals throughout retirement

With this option, your account will remain invested and you will receive payments directly from the account. The maximum drawdown rate is determined by the Pension Commission. The payments will be variable based on investment returns and your age. In the event of death, the balance of the account is payable to your beneficiary.

Life annuity with no guarantee

A fixed pension is payable to you for as long as you live. Nothing further is payable after your death.

Life annuity with five (or ten) years guaranteed

A fixed pension is payable for as long as you live, but if you die before receiving payments for five (or ten) years, the pension is payable to your beneficiary for the remainder of the guarantee period.

Life annuity with cash refund

A fixed pension is payable for as long as you live. Upon your death, you beneficiary will receive the difference, if any, between the total monthly payments made to you and the initial amount paid to purchase the annuity.

  Background Information

If you want to know how much you'll need to achieve financial security, you must first decide on the lifestyle you want. You can select either the suggested income based on 75% of final income, a percentage of your choice or an annual amount of income that you will require at retirement.

My Investor Profile

Select fund: 

Guaranteed Fund



  Background Information

The Investment Questionnaire suggests the most appropriate fund based on your time horizon, investment experience and risk tolerance.

Investment Questionnaire – Complete the questionnaire to learn which Argus Select Fund is most appropriate for your time horizon and risk tolerance.

The expected investment return used in the calculations will be based on the Argus Select Fund selected here. The calculations use a higher expected rate of return for a fund with a higher proportion in equities. But if investments underperform expectations in the future, you may end up with lower retirement assets than with a more conservative investment strategy.

My Action Plan

Am I on Track?

You must click the Update Results button on the left side to update the calculations.
Your projected assets and savings at retirement are not going to be enough to provide the income required for your retirement lifestyle.

Required vs. Projected Assets at Retirement

  More on Assets at Retirement

Required assets is the amount you will need at retirement to meet your lifestyle income goal from your retirement age to the end of your life expectancy. Projected assets are an estimate of the amount of assets you will have at retirement. These include your current assets today, plus monthly contributions continuing until retirement, plus investment income assuming the rate of return for your selected investor profile.

The shortfall of assets is the difference between what you need to provide for your retirement lifestyle and the estimate of what you will have at retirement based on your assets and future savings.

Additional Savings to Reach Lifestyle Income Goal

This table shows your current monthly savings and total savings required to reach your lifestyle income goal. The additional savings to reach your goal is the amount that together with your existing assets, scheduled monthly savings and future investment returns will be sufficient to achieve your selected retirement income goal.

Current monthly savings $0  
Total savings required to reach income goal $3,776  
Additional savings required to reach income goal    $3,776  

  Retirement Income Goal vs. Projected Income

This chart compares income expected to be available each year of retirement to your lifestyle income goal, assuming you earn investment returns expected for your investor profile selection. The chart covers the first year of retirement to the end of the life expectancy. You can see see how long your money is expected to last in the future.

  Projected Retirement Assets

This chart shows an illustration of your assets between now and the end of the projection period. Assuming you invest in accordance with your investor profile in the future, the chart shows what would happen if your assets earn the expected investment return each year, no more, no less. Your assets will have a lower value if investments underperform expectations and a higher value if you get very good investment returns.

  Modifying Your Action Plan

If you find that it is unlikely that you will reach your lifestyle goal, you could vary one or more of the key variables of your plan:

  • Include in your plan part-time or contractual income for a few years at the beginning of retirement. This will make it possible to take lower withdrawals in the first years of retirement while earning compounded rates of returns on these unused assets over that period.
  • Reduce your retirement lifestyle goal amount. Even a small downward adjustment can make a big difference over the long term.
  • Retire a few years later. Your assets will be compounded for a few more years and you will not incur expenses that are normally covered by employment, such as health care and other insurance.
  • Save more toward retirement. It is often possible to spend less and save more for the future. These added funds will earn investment income and will compound over time.
  • Use other assets. Consider using other assets that you were not planning to use as a source of retirement income.