I'm trying to figure out exactly how much we need to save now in order to retire when we plan to. How does one project these things?
The plan is that we won't have debt. The mortgage will be paid off in a few years, and after that it's all about saving and using cash. $$$ We're not about to be going out and financing fancy cars or anything, so that's not a concern.
The point is that the financial planner thinks we need to match our current income. But, why? We could be living off of 60% of our income now if not for mortgage and other debts. As far as that goes, DH will get a 60% pension when he retires.
That's not to say that I don't want to save at all. I just want to know how much we'll actually need and save accordingly. I'd like to be able to enjoy our money more and save for the kids' futures- beyond RESPs. But when I sit down with the numbers it all gets so incredibly confusing.
Plus, this RRSP thing I don't get. I know it is a tax deduction now, but we'll have to pay tax on it eventually. If we're matching our current income with the combination of RRSPs and pension won't our income tax bracket still be that same? So, where are we benefiting from the RRSPs? Bah! It's too confusing.