Malcolm Hamilton podcasts: Are we saving too much?

Audio: Malcolm Hamilton on how much Canadians are saving for retirement.



Online only.


Hamilton and Chevreau
I recently sat down with Mercer principal and actuary Malcolm Hamilton to talk about financial independence and how it relates to retirement. As most MoneySense readers may be aware, Malcolm is perhaps Canada’s most articulate expert on pensions and retirement and is often quoted in the magazine and other media outlets.

Over the coming weeks, we’ll be posting in this space short audio clips from the interview. The first one below deals with the eternal question of whether Canadians are saving enough for a comfortable retirement or indeed whether some may be saving too much.

For years, Canadians have been told they’ll need to replace roughly 70% of their pre-retirement income in order to maintain their standard of living long after they’ve left the working world. But recently, some experts have begun to challenge that conventional wisdom.

Q: Are Canadians saving too much for retirement?

A: Press play to hear Hamilton’s response:


3 comments on “Malcolm Hamilton podcasts: Are we saving too much?

  1. The investment industry likes the 70% number as the amount of pre-retirement income needed in retirement to maintain a person's lifestyle, but from my experience and As Mr. Hamilton states, a retirement percentage of approximately 50% is more the norm. In fact, Morneau Shepell states the planning number should be closer to 43% (… ).

    The difference between 70% and 43% is massive. Canadians using the 70% figure in their retirement plans may be working toward an impossible goal.

    For example, a couple earning $100,000 in pre-retirement income, using the 70% figure will need to accumulate $1,150,000 (after pensions and assuming a 4.0% investment rate of return). But, if the actual number is only 43%, then that same couple will only need to accumulate $475,000 for a secure retirement.

    That is a massive $675,000 difference. (… )

    So if the actual percentage is 50% or 43%, many Canadians are actually closer to a financially secure retirement than they realize.


    • The problem with the above comments is everyone is different.
      50% maybe a good number if you remain healthy in retirement and don't need long term care or have children who can look after you 24/7. Also assuming you keep your car for 15 years or don't travel much.

      If you like going long distances with a half a tank of gas and no more retirement can be the same how many times do you want to retire?

      The link George's site contains a lot of guesses about returns there is very little about taxes and the assumed 3.25 wage increase is very questionable. Inflation at 2%? How about property taxes as one example has that gone up over the last 10 years by only 2%?

      When Jets fly, do they take off on a half a tank? No because it is better to have more fuel it one runs into bad weather (like market returns in 2008) etc. What about a spare tire…why not save gas and get rid of it?

      When you retire is it better to have more money… or to run out of money in retirement? 70% is not a big number to try to achieve.


  2. Geriatric care will likely become more and more costly as retirement homes and long term care centres are flooded with baby boomers. Today's cost may not accurately represent the cost in 10-15 years time.


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