currently you are 35 years old and have $10,000 in your retirement account. you expect you can achieve a rate of return of 10% on this fund. you work at a ffantastic employer who offers both a defined contribution and a defined benefit pension plan. with respect to your defined contribution you are going to begin saving at the end of this month. you plan to put $250 per month and your employer will match this contribution. you estimate you will achieve a 9% return until retirement.

for your defined pension plan it counts the top three years of salary and the pension formula is based on 1.5% to a maxium of 30 years of service. for the purpose of the exercise assume you will have 30 years of service. the last 5 years of income (which is also your best years) are:

$125,000 $131,000 $136,000 $198,000 $120,000

you plan to apply for CPP pension and OAS. you are not married and have been in canada for 30 years after your 18th birthday before you retire.

your hope is to retire at the age of 65 and once you retire you expect a more conservative return on your investments of 6% and you expect to live to be 87 years of age.

what is the total amount you will need at retirement to fund the $10,000/month retirement?