How to access your personal retirement savings number

Everyone's retirement looks different. Travelling, starting a business or indulging in new hobbies could swell your retirement spending.

A healthy lifestyle, along with advances in medicine, can also have an impact — potentially leading to a longer life expectancy. The average life expectancy for Canadian men is currently 81,  according to the World Health Organization (WHO) Opens in a new window.. And for women, it's 85. Living longer could mean spending more time in retirement than you'd originally planned, and your savings must be able to keep pace. A major illness, on the other hand, could cause you to accelerate your spending in retirement if you need to tap a larger share of your savings for medical expenses.

Creating a potential retirement budget could help set an appropriate savings guideline once you've defined your retirement vision. This budget should account for day-to-day expenses like food, costs that may increase in retirement, such as health care, and new expenses, such as travel.

It might be easiest to begin with a monthly budget, then use that to create an annual budget. Your advisor can help.

Once you establish your estimated retirement expenses, the next step is determining how much income you'll need in retirement to meet your budget.

Using the $756,000 figure from the CIBC poll as an example, you could withdraw $5,000 per month for 21 years, assuming a 7 per cent annual return. If your projected monthly spending in retirement is $10,000, you'd need to set a higher savings goal or adjust your expenses.

As you begin to contemplate your ideal savings number, a retirement calculator can help. These calculators use your current age, planned retirement age, estimated years in retirement and income to generate a savings number.

You should also account for any major lifestyle changes, such as spending more time travelling or starting a business, that could increase the amount of income you'll need. Having the numbers laid out in black and white with a retirement calculator can give you the perspective you need to better shape your savings plan.

Inflation can affect your purchasing power in retirement. When prices rise, your dollars don't stretch as far. On average, Canada's consumer price index rises by 2 per cent each year Opens in a new window.. If you have 30 years until retirement, your savings number needs to account for future price increases.

Of course, that number doesn't take into account any supplemental savings you may have from the Canada Pension Plan Opens in a new window. or Old Age Security Opens in a new window.. As you work towards your retirement savings number, remember to factor those benefits into the equation.

If you're ready to determine your retirement savings target, stay focused and keep it simple. Consider your desired retirement lifestyle, how your current savings rate aligns with future income needs and how things like changing health and inflation may impact your financial outlook to arrive at your ideal savings goal. One last tip: talk to an advisor about your retirement savings plan and the necessary steps to help you make your retirement dream a reality.