Do I have enough to retire? What will my financial future look like? These are some of the most commonly asked questions in financial planning, and with all the uncertainty going on in the world due to the COVID-19 pandemic, it has become more prevalent in the past few months.

Anxiety and stress levels have increased significantly—particularly concerning finances. For pre-retiree women in Canada, this question can be even more complicated.


Understanding the rules


Even before COVID-19, Canadian women were at a significant financial disadvantage to their male counterparts. Women lagged men in savings.

The reasons are complex, but it’s partly because women live longer (79 years for men vs. 83 years for women, according to Statistics Canada), earn less (87 cents to every dollar a man makes), and experience more career disruptions (on average, working 10 years less than men).

Dreams and aspirations are great, but the primary concern for most women is making sure that their money is going to last.

Over the years, you may have read or heard about certain rules of thumb to follow, including some of the more popular ones like:


70% Replacement Ratio: Based on the “replacement ratio” rule of thumb, you will need 70% of your pre-retirement income to maintain your lifestyle after retirement.

4% Rule: You can withdraw 4% per year from your investments and increase it every year by inflation.

Age Rule: You are getting older, so you should invest more conservatively based on the “Age Rule.” You should invest 100 minus your age in stocks.

Sequence of returns: You should invest conservatively because you can’t afford to take a loss. You could run out of money because of the “sequence of returns.” If you have investment losses, there is a chance the investments will not recover.

Cash buffer: You should keep cash on hand equal to 2 years’ worth of income from your investments to draw on when your investments are down.

The problem with these rules of thumb is that they have been handed down from one generation to the next and are not necessarily reflective of the world today. More importantly, they are not reflective of your personal situation.


In order to find the solution that's right for your personal situation, Family Wealth Advisor, Christopher Jardine, CFP®, put together this handy 8-step checklist to help you find the right answers to your financial questions.

Your 8-Step Financial Future Checklist


A good way to start is by using the following 8-step checklist to create a picture of your financial wellbeing. A spreadsheet is ideal, but a scrap piece of paper and a calculator will work too.

  1. Monthly Expenses:

Establish current monthly expenses by creating three buckets:

      • Non-discretionary fixed monthly expenses. These are expenses that are non-negotiable and must be paid. Think along the lines of housing costs, food, hydro, medical, etc.

      • Discretionary fixed monthly expenses. These are expenses that compliment your current lifestyle but could be cut back on or reduced if needed. Think along the lines of clothing, that 400 channel cable subscription you pay for but only watch 5 channels, magazine subscriptions, etc.

      • Leisure expenses. This is your play money, going out for lunch or dinner with friends, social activities, vacations, etc.

  1. Projected Budgets:

    • From these buckets, it is important to consider how these may evolve over time. In 5 or 10 years, will you still have that car loan? Will you still vacation as much? As with everything in life, financial needs change and creating projected budgets ahead of time allows you to plan effectively.

  2. Sources of Income:

    • Now that your expenses have been established, what are your sources of income? How much will you receive in CPP and OAS? Do you have an employer pension? Is it indexed for inflation? How much do you have in personal savings? Do you receive rental income?

  3. Impact of inflation:

    • When putting together your sources of income, it is very important to consider the impact of inflation (2-3% per year is a good ballpark figure to use). Costs are likely to rise each year, and the impact of these increases over time can be quite large.

  4. Expected Return:

    • Calculating your income from personal savings is the tricky part. The last 10 years have seen exponential investment returns for most investors. It is unlikely this will be the same for the next 10 years. In order to come up with an expected return, we would suggest the following strategy:

      1. You need to understand how your portfolio is invested. In its simplest form, how much do you have in stocks vs fixed income?

      2. Adjusting for lower return expectations, we would suggest you use a 3% annual return for fixed income and 6% for stocks.

      3. As an example, if your portfolio is 50% fixed income and 50% stocks, an assumed annual return of 4.5% is reasonable.

  5. Investment Savings:

    • By now, you will have established how much your investments are worth, an assumed inflation rate, and an assumed return. You also need to consider how long you will live. Unless you have a history of longevity in your family, we suggest using age 90 or 95. Try our easy-to-use and understand Retirement Savings Calculator to help you find how your finances will stand up in retirement.

  6. Expected Taxes:

    • At this point, you should now have a clear picture of your expenses and your expected long-term income.  Now,  you must make an assumption on how much tax you will pay. EY’s 2020 Tax Calculators are great resources but please note that this is a very basic estimate and does not take into consideration any applicable deductions and credits.

  7. Evaluate:

    • Add up your total income and then subtract expected taxes and expenses. If your income exceeds your expenses, then you’re off to a good start.


There are, however, other factors to consider when evaluating your financial health.  That is why it is important to talk to your Family Wealth Advisor who can help you conduct a more holistic assessment of your financial health and work with you to create a plan that will help you achieve your goals.

Ready to take control of your financial future? Request a holistic assessment of your financial health from Chris and get started today.



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© Bellwether Investment Management Inc. 2023. This communication is intended for residents of the provinces in which we are registered and is not meant to be a solicitation to any persons not resident in those provinces. Any opinions expressed in this article are just that, and are not guarantees of any future performance or returns. Some of the information contained in this article has been drawn from sources believed to be reliable but due to the fact that it is provided by a third party, it cannot be guaranteed to be accurate or complete. Bellwether Investment Management Inc., Bellwether Estate and Insurance Services Inc. and Bellwether Family Wealth cannot provide tax advice and therefore we recommend that you consult your tax advisor for further assistance with your tax planning and the preparation of your tax return. The report is prepared for general informational purposes only and the securities mentioned in this report should not be construed as a recommendation for any specific securities.

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