What will your pension look like?

With Baby Boomers and other soon-to-be-retirees, retirement advisors frequently offer suggestions for how clients can calculate how much money they think they will need to continue their desired lifestyle after they have stopped working.

And while there are different calculations being suggested for Baby Boomers, many experts advise people planning for their retirement to take a holistic approach, and consider their current lifestyle versus planned retirement lifestyle, and what role, if any, travel or part-time work will play in the future.

Writing recently in the Globe & Mail newspaper, Canadian economist Michael Wolfson argued that despite changes in lifestyle habits and sometimes even location, most people maintain a fairly consistent spending and consumption pattern even after they retire, and one of the consequences of this is that lower-income and higher-income individuals are affected in different ways.

For example, those who earn less during their working years are often hurt by the loss of that income in retirement, and they may struggle to avoid poverty, while wealthier people, while they may not be at risk for poverty, will not maintain their standard of living.

What do you think? Do you think government pension plans should aim to fully replace working income, or act merely as a supplement for the retirees’ own savings and investments?