I've been sitting on this post for a few weeks now, worrying that it's too long, and the point I'm trying to make is going to be lost in all the words, so I'll make it really simple for those of you who won't get through 2000+ words:

The markets are going to do what the markets are going to do, there is no portfolio on earth that will keep your portfolio going up when everyone else's are going down every single time, so stop worrying about what the market will do in your lifetime and start focusing on what you can control: your spending, your savings, and your expectations.

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If I told you that the day you were born is the most significant number in your investing life, and that it has more to do with the path your investments will follow than your asset allocation, your annual savings rate, or the management fees you're paying, you'd think I'd developed a fascination with astrology and had to consult a star chart before rebalancing, wouldn't you?

It's true (though not the astrology part). The particular sequence of market returns that you'll enjoy (but not necessarily participate in, more on that later) throughout your lifetime starts when you're born, ends when you die, is entirely outside of your control, and, if you're not careful, will heavily influence when you start investing, how you'll do it, and your outlook on life when you turn those investments into income."

Sequence of returns", for those of you not interested in reading retirement income research on a daily basis, simply means the order in which your portfolio performs: a portfolio that has a good year followed by a bad year will be very different than a portfolio that has a bad year followed by a good year.

Sequence of Returns as a Highway

Think of your personal sequence of returns as the only highway you can take to get to your destination. If you plan on living off of your savings in retirement and have a finite ability to save, you're on the highway.

I recently had the pleasure of driving down to Toronto twice in two weeks. On both trips I left at the same time and drove the same route: Highway 11 to 400 to 401 West to the Don Valley Parkway and into the heart of the city, but I arrived at very different times and experienced very different driving conditions along the way.

If you've ever driven toward Toronto (or any major city) first thing in the morning, you'll be familiar with what I experienced. I had a little bit of control over when I left (early), but zero control over when everyone else left (late, apparently), how they drove when they got on the highway (meh), whether construction had closed any lanes (it had), and whether it was snowing (once) or not (once).

The first trip was fast until I hit the city, and then much slower as I made my way across and down into the heart of the city. The second trip started slow and never really sped up from there, and I'm fairly certain that the entire province of Ontario and most of Manitoba had decided to drive into Toronto that morning with me.

Stress in the Driver's Seat and What You Can Control

Now, if you're the type who likes to drive but gets stressed out by traffic, the first trip wouldn't have been too bad. You would have faced the increased traffic at the end of the trip with equanimity, knowing that the light traffic at the beginning had given you plenty of time to get where you needed to go. It would have been to easy make good decisions at a relatively leisurely pace.

The second trip, on the other hand, would have started off bad and gotten worse from there. The slow start, heavy traffic, and bad weather would have stressed you out, and as your appointed arrival time got closer, the pressure would have increased, you would have driven faster (when you could) and left less room between you and the car in front of you.

The amount of time you gave yourself to make decisions would have probably gotten shorter, and the resulting decisions consequently worse.

Without stretching the metaphor too far, your market returns may start slow, speed up in the middle, grind forward inch by inch, and stop completely for a while before shooting forward quickly and then slowing down again with no concern for where you are in life. You have control over when you start and how you behave once you're in the market, but not the speed with which it travels.

And here is where the metaphor ends, because - of course - there's plenty of reliable information available about the future to a motorist: turn on most radio stations and they'll tell you if the road you're on has a few lanes closed, or is moving quickly, or if you should take another route entirely. Except for the fact that markets generally go up in aggregate, there's no such thing as reliable future information for investors to act on both consistently and profitably, and anybody who tells you different is selling something.

At the beginning of this piece, I cautioned you to be careful about letting your sequence of returns influence your behaviour in the markets, and this is where I want to focus: despite the fact that the market itself cannot be controlled, you can control your own behaviour.

When Sequence of Returns Matters

Early on in your savings and investing life, the sequence of market returns assigned to you by the accident of your birthday aren't much of a big deal, provided you can keep your head level and your costs low. For you, my advice is to embrace complacency, watch your fees, and keep on saving.

Later on in life, however, when the time comes for your investments to fulfil their purpose and provide you with income, the effect that your particular sequence of market returns has becomes a very big deal indeed. Anyone that has to withdraw a certain amount of money from their portfolio by selling invested assets (no matter what the price of those assets happens to be that day) is exposed to sequence of returns risk in a very big and important way.

You might be ready - so ready - to retire just as the market takes a nosedive and stays there for a while. Your neighbour, someone a few years younger or older than you, who earned the same amount, saved the same amount, and wants roughly the same kind of retirement as you do might be ready to retire just as markets start shooting upwards.

You, with that disappointing sequence of returns the market and your birthday handed you might stick to your asset allocation, delay retirement, reduce your spending, and be more or less fine. Or you might get desperate, start taking bigger and bigger risks, scrabble for higher yields, pay for guarantees you don't really understand, and generally drive your portfolio irresponsibly in the hopes of getting a few inches closer to your goal without seeing the hazards you're exposing yourself to.

Your neighbour might be lulled into thinking that his incredibly favourable sequence of returns was the result of his own special skill, take stupid risks, spend without thinking, and end up in much the same position as you but with no idea how he got there. Or he might realize that his sequence of returns was a fortunate turn of events, retire a little earlier, gradually increase his spending, and (drum roll please)...be more or less fine.

Unsatisfactorily - perversely, even - the only time you could actually quantify the "success" of either path (provided you believe that a "successful" retirement is one in which you end up having spent the most amount of money) is when it's too late to do anything at all about it. As in, when you're both dead.

Participating in Market Returns vs. Driving Like a Lunatic

This, incidentally, is one of the reasons we can talk about and mostly agree on reasonable expectations for future market returns on average over the next ten years while being completely unable to do the same thing for the return you personally will earn over the next ten years. 

While in an ideal world, you and your neighbour both keep your head, invest regularly through thick and thin, and rebalance on schedule, it's entirely likely that - here in the real world - at least one of you will lose your head, stop investing when markets are down, throw your money into the ring again when markets have been up for a year, and stop rebalancing entirely because the thought of selling a winner to buy a loser gives you hives.

How to Worry Less About Your Sequence of Returns (Spoiler Alert: It Involves Sacrifice)

If the only thing you take away from this piece is that you need to have realistic expectations in order to avoid bad decisions in moments of panic or over confidence, that's great. If it has convinced you to fold your hands, shrug your shoulders, and invest in a low cost, well-diversified, and balanced portfolio of stocks and bonds that you add to regularly, rebalance annually, decrease the stock side gradually, and forget about for the rest of the year, well...that's great too. 

Bad behaviour is much easier to avoid if you truly believe that - outside of setting up a good infrastructure - there is nothing you or especially the expensive money manager with the big promises can do to change the outcome of your investments.

But what I'd really like to accomplish with this piece is to lay the foundation for you to truly understand the five possible actions that you can take as you approach retirement and look for ways to avoid the worst that sequence of return risk can do to you. They are easy to type, and sound almost cavalierly pat when said out loud, but are simultaneously the most difficult and astonishingly simple actions you can take:

1. Save more now,

2. Spend less now and in retirement,

3. Work longer (which just another way of saying "save more and spend less"),

4. Increase the amount of guaranteed income you'll have in retirement, or

5. Some combination of all four.

"Save more now" you're already pretty familiar with, I'm sure, and you're likely even more familiar with "spend less now and in retirement", since it's often the easiest solution to offer and understand.

Each involves sacrifice. For example, a very smart person could have realized by now that a clever way to avoid sequence of return risk is to save enough so that you can live on only the dividends and interest that the portfolio spins out, bypassing the need to sell anything in order to live comfortably. That very smart person likely worked very, very hard to increase her income and saved enormous amounts of it. That very smart person will spend none of her capital and will have very fortunate heirs.

"Work longer" might be impossible to follow through on, depending on your health and whether there's work to be had, so for most people a more reasonable recommendation might be to "plan on considering the possibility of working longer than you'd like, but don't rely on it".

"Increase the amount of guaranteed income you'll have in retirement" is an almost universally applicable piece of retirement planning advice, and although it comes with its own sacrifices, it's one you should pay attention to. Every dollar that you get from guaranteed income - that is, Old Age Security, the Canada Pension Plan, and/or a defined benefit pension plan, and/or an annuity - is one less dollar you have to withdraw from your investments when markets are down.

Of course, the kind of guaranteed income you buy over your lifetime of work like CPP or a pension, or all at once like an annuity is purchased at the expense of having one less dollar available to be invested as markets go up.

The sacrifice involved in increasing your guaranteed income is of the "woulda, coulda, shoulda" variety, as in "if I had only known that I would get a really favourable sequence of returns in retirement, I wouldn't have bought that annuity", or "if only I had know that I would get a very bad sequence of returns in retirement, I would have bought an annuity instead", or "if I had only known that I'd die at age 70, I wouldn't have cared" and - again - is quantifiable only when it is too late to make a difference.

Maximizing your guaranteed income can seem expensive, which is why most of us can only afford to increase a few slices of our retirement income rather than the whole pie. It's also why the solution for most regular people worried about sequence of returns risk could be pretty easily summarized as "save a little more, spend a little less, work a little longer, and use some of your savings to buy an annuity."

Oh, and exercise those contentment muscles.

(You'll note that "increase your stock allocation in order to juice your returns if you're close to retirement and feel like you haven't saved enough" isn't one of the possible solutions.

Read Wade Pfau's recent piece Stocks for Retirement for some good argument and counterargument on that front.)

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Further Reading:

How Your Birthdate Can Impact Your Financial Affairs and Retirement Mark Goodfield

Sequence of Returns Risk: What's That Mean? Dirk Cotton

Retirement Ruin and the Sequence of Returns, Moshe Milevsky

You Can't Control When You're Born: Revisiting Sequence of Returns Risk, Wade Pfau 

The point: scoff if you like, but we have a public pension system in Canada that will likely make up a good portion of your retirement income, and its existence should be factored into your plans.

I hear it all the time - in banking, in financial planning, and now online in the personal finance blogging community: "CPP won't even exist by the time I retire." 

To that I say: bull hockey.

Now, I'll grant you that it might look different. It might start later, and it might pay less in inflation-adjusted dollars. I'll even grant you that building your entire plan around maximizing only your Canada Pension Plan, Old Age Security, Guaranteed Income Supplement, and the various provincial income programs isn't a great idea.

But the idea that some day the Chief Actuary of Canada will pick up the red phone on his desk and report that the CPP Account and the CPP Investment Fund will run dry in fifteen years so let's just cancel the program is ludicrous.

Here's an example from a related (but non-contributory) program: the age of eligibility for the Old Age Security pension changed this year because Canadians - on balance - are living longer, healthier lives (hooray!) and this is putting a strain on the ability of the federal government to pay out $6,600 a year to everyone over 65 earning less than $70,954 a year. Solution: increase the age of eligibility to 67.

Did the change happen overnight? Did 64 year-olds all across Canada wake up one morning two years further from receiving OAS than they were when they went to bed? Of course not.

In fact, anyone with eleven or fewer years to retirement wasn't impacted at all by the change. The only people who saw their age of eligibility extended by two years in an instant were those with fifteen or more years until they would have started collecting anyway, meaning that if they were relying on receiving $6,600 a year for their quality of life in retirement, they had 15 years to save the $13,200 necessary to make up for it.

Can our government change? Certainly. Might we as a nation ever be in the situation where - either out of perceived necessity or a burgeoning dictatorship - our government amends or disregards the rules under which the CPP Act can be changed? Sure. The social programs we know today might disappear entirely, but - if I may be so bold - if that's the case you'll have bigger problems than your pension entitlements.

The only time that leaving your public pension benefits out of your retirement calculations is a good idea is if it actually spurs you on to save the replacement value privately, and those savings don't negatively impact the quality of life now.

If you're just doing it to be fashionably cynical? Cut it out.   

The point: planning for your retirement isn't just about your investments, although you can be forgiven for thinking it is. It involves exactly the same activities as planning for tomorrow, next week, and next month: active budgeting, debt elimination, robust savings, and - above all - flexibility.

You've figured out what you want out of life. You've got a handle on how much you spend, and what you need to cover your minimum expenses. You're reasonably certain of your retirement income from public and private pensions, and you've worked out how much you should save toward your long term goal of quitting your job and traveling the world. Or staying at your job until you die because you love it that much. Or whatever.

Now what?

Now, my friend, it's time to put all of this information to work for you.I'm going to take a moment to make the argument that we in the financial planning industry have made the mistake of conflating "investment advice" with "financial planning", and I'll bet that you've had the same experience that I've had: you've gone to see an advisor, thinking you'll come out of the meeting with a clearer idea of what your future might look like, and some immediate actions you can take to get closer to it.

Instead, you've left the meeting with some net worth printouts, a market forecast report that regurgitates what the resident market experts think is going to happen in the next six months, and a new mutual fund, and - when pressed to explain how that forecast or those funds in particular will help you achieve your goals - you're a little fuzzy on the details.How you invest will impact how fast and how reliably your money will grow. But - and here's the kicker - no one can guarantee either the speed or the volatility of your returns, and those future returns - plus inflation, and your health - are the pieces of your retirement puzzle that you have the least control over.

Since you don't have a crystal ball that will tell you how efficiently your money will grow or if you'll experience some financial catastrophe or when exactly you'll die, the only sensible course of action is to make the best choices in the areas you do control.

What you have control over is how much money you make, how much of it you spend, how much of it you save, and how much debt you're in. Any one of those things can impact your bottom line at retirement more powerfully than those things you can't control.

Think back to the fun you had with retirement calculators yesterday. Now, because I have no idea what your ultimate goals are, what follows isn't going to be specific to you, except by sheer coincidence, but the thought process will be the same.

Bare Bones

Imagine the bare-bones scenario: work until you're eligible for your private pension, draw your OAS and CPP entitlements, and cover the rest of your necessary expenses with your savings. The calculators will all have given you slightly (sometimes wildly) different numbers to save to make up the difference: can you save that much? That's the benchmark.

Best Case Scenario

If you're already saving that much, or can pretty easily find that money in your budget, then you can set your sights higher - actually, lower - what if you take early retirement at 60, collect your reduced CPP and wait until 67 for OAS? How much more would you have to save then?

Even Better Than Best

If that's easy to accomplish, go lower. How much money would you need to save to be financially independent at 55? 50? Years before you're eligible to collect a dime from anyone else? That calculation is a bit trickier, because it's got more moving parts: you need a sum that will generate enough income on its own, and that will last long enough to adequately supplement your pension when you do take it.

Uh-Oh. Belt-Tightening Time

What if the amount you need to save even to retire at age 67, or 70, or even 75 is out of reach? Remember what you can control: how much money you make, how much of it you spend, how much of it you save, and how much debt you're in.

Change any one of these moving targets, and it affects the other three, so if you want to be able to save more money, revisit step 3 of your budget work in this post and start cutting your spending, ruthlessly if you have to. There are creative ways to save money too. For instance, if you have a car, it might be worth trying to reduce the amount you pay for your car insurance. A retired friend of mine managed to find a more affordable policy using a no money down car insurance deal. Furthermore, there are also ways to save money on your phone packages. By shopping around online and comparing your options you may find that you are eligible for a better deal at a reduced rate.

Above all, I am utterly convinced that if you find yourself unable to save enough for a bare-bones, necessities-only retirement then any amount of tampering with your investments won't make a difference. Your only course of action is to address the reasons you can't save, and one of only two ways to figure out why you can't save is to examine your spending.

I know. Here we are, back where we started, talking about the most unsexy part of personal finance: budgets. Even the word is ugly, which is why we financial planners (the ones who actually talk about spending, that is) like to tart it up by calling it a "spending plan".

But here's the truth: if you have the kind of income most regular Canadians do, and the kind of mortgage payments and debt loads, then unless you can ruthlessly control your spending you will only save for a comfortable retirement by going into debt. It won't look like you're putting your RRSP or TFSA contributions on your credit card or line of credit, but that's what the net effect will be.

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Finally. The end of the retirement planning series. If you're new to the series, you can find the preceding posts here:

• Avoiding the Useless Retirement Plan, Step One (figuring out what you mean by "retirement")

• Numbers, Numbers, Numbers (how to calculate exactly what you'll spend in retirement by figuring it out today)

• Incoming (how to predict your retirement income from public and private pensions)

• Fun With Retirement Calculators (how to make the best use of a faulty tool)

The point: retirement calculators are only as good as the information you put in them and the underlying assumptions of the calculator itself, and are useful only to model the future, not predict it.

The lure of the retirement calculator is that it will tell you your future; you'll punch in your age, how much money you're saving, and when you want to retire, and when you hit the calculate button, the computer will say "Winner! Gagnant!", and you'll realize you don't have to save anymore.

Maybe that's just me. See, I play with retirement calculators pretty often. What I've observed in my years of tinkering with even the best ones is this: garbage in, garbage out. (Welcome to the world's Most Obvious Awards.)

Remember last February, when you went to the bank to make a contribution to your RRSP? You sat down with someone in an office and did some retirement planning, and you left with a printout from the retirement calculator and an RRSP contribution receipt?

Which one of those pieces of paper did you keep?I know, it's a silly question. You kept both. You kept the receipt for your taxes and dutifully filed away the printout. I bet if you looked in your filing cabinet right now you'd find it, tucked in with all the other paper flotsam you feel like you should keep but don't really know what to do with.

You kept it because you have a deep desire to understand what is likely to happen in the future and to be able to plan for it. You want to be able to make your next financial choice (and the next one, and the ones after that) knowing as much as you can about the possible outcomes of that choice.

Here's the bad news: the advisor you sat down with when you contributed to your RRSP last February used a retirement calculator exactly like the one you can use yourself online, and there's only a very slim chance that the retirement income he forecasted for you was right.

To be fair, realistically forecasting your future income from government benefits, private pensions, and personal savings is complicated, as is predicting how much you'll be able to save, what taxes you'll pay, what inflation will be, and when you'll actually stop working - if you do.

To be really fair, the further away you are from that future, the harder it gets to predict.

To be really, really fair, if you don't know how to do it, or don't acknowledge the basic faultiness of the whole concept of "calculating" your retirement, then you can't call it retirement planning.Look, for a lot of people, saving money is enough. They put money in an RRSP or TFSA (or both) and don't spend a lot of time trying to predict the future. Frankly, they'll probably be fine. As they get closer to the age when public pensions kick in, they'll adjust their expectations to match their increasingly accurate (because it's closer) future. That's what humans do.

But what if you have big dreams? Or you recognize that "just saving" is a risky course of action, and want to identify and mitigate those risks? What if you want to make the best financial choices you can with the best information available to you? "Just saving" isn't going to cut it for you, and so you plan.

That printout isn't going to guide your financial choices because you don't really understand what went into creating it. Now, please understand, what follows isn't going to guide your financial choices, either. It can only get you familiar with the concepts and assumptions of the standard retirement planning process.

The Facts:

The easiest and best place to start with retirement planning - and most things in life - is with the facts. Your age, how much you have in long-term savings, and the minimum amount of money you need to pay your necessary expenses (which is usually expressed as a percentage of your current after-tax income).

The (Educated) Guesses:

When we talk about things like inflation rate, rate of return, likely income from guaranteed sources, and length of retirement, we're already in crystal ball and tea leaves territory. These are the things we can't predict with precise accuracy and have no control over. Yes, we can talk about historical numbers and statistical probabilities, but no one really knows what's going to happen. You don't know how long your retirement will last because (newsflash) you don't know when you're going to die.

By default, then, conservative folks will use the highest reasonable numbers for inflation (like 3%), lowest for rate of return on a balanced portfolio* (5%), and longest for "length of retirement" (95 or even 100). This number will scare you, and it's supposed to. It's meant to express the amount of money you need to have in the worst case scenario.

The Variables:

How much you save and when you retire are two things you do have control over, which is why they're the first numbers to get played with. Most people are looking to retirement calculations to either A) verify that they're saving enough, B) tell them how much they should be saving, or C) figure out when they can retire, or quit their job forever (not necessarily the same thing, as +Jon Chevreau would say.)

The Tools:

There are some excellent free retirement calculators out there, for the purposes of this exercise. Rob Carrick wrote a great roundup in 2011, and I agree with his assessment that by far the best one to use is The Canadian Retirement Calculator from Service Canada, although it has its weaknesses: it doesn't take into account the Child Rearing Dropout Provision and gets increasingly wonky if you start trying to calculate earlier than 65 retirement numbers.

The Optional Tools for Real Money Nerds:

Even though Darrow Kirkpatrick's roundup is for Americans, you can still play around with them (the calculators, not the Americans) if you're feeling confident. My particular favourite to use in conjunction with Service Canada's calculator is the Vanguard Retirement Nest Egg Calculator, which - given the size of your savings when you retire, your asset allocation between stocks, bonds, and , the number of years you think you'll live, and the amount of income you'll need after public and private pensions - will run 5000 historical market scenarios and give you the probability of your nest egg lasting until you die, no matter what the markets do.

The Process:

Start easy. Use conservative numbers and an easy to calculate retirement age of 65**. Figure out first what kind of income you'll have if you continue to save exactly as you are now, and your existing savings continue to grow at conservative rates.

If that number doesn't satisfy you, start tinkering. Decrease the amount of income you'll need (you might work a part time job in retirement), increase your savings rate, or push back your retirement age. You can calculate different things for different points of your life, ensuring you have enough money for these different things.

For fun, figure out how much you should save in order to semi-retire at 50 and work for less pay doing something you've always wanted to do.You'll be tempted to increase the rate of return and decrease the rate of inflation - I know I always am. If my portfolio earns 15% net of fees and inflation is 1% in the next 15 years, I'll only have to save another $25 a month to see myself retired at 49, reading books on my porch. (A girl can dream.)

The Weakness:

Once you start playing around with the numbers, you'll get the creeping feeling that you don't know anything and it's impossible to tell the future. That creeping feeling is right. Retirement calculators aren't solving a complex equation that will exactly predict your circumstances provided you just put the right information in. They're all just models, potential futures that probably won't happen the way you expect anyway.

That doesn't mean that you shouldn't go through the exercise with gusto, because unless you want to "just save", having a plan - even one that has an overwhelming statistical probability of not working exactly as you envisioned - is essential in order to make informed financial choices throughout your life.

If it doesn't inspire you to think more deeply about your own retirement assumptions, then at the very least, it should help you evaluate if the salesperson you're sitting across from knows what he or she is talking about the next time hunting RRSP season rolls around.

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Whew! We're almost done with this series - and good thing, too, because I want to write about mutual fund fees, or embedded commissions, or anything other than retirement, really.If you're just starting with me, you can read the rest of the series here:

• RRSPs: Hunting Season (what banks and brokers are really offering at RRSP season)

• Avoiding the Useless Retirement Plan, Step One (figuring out what you mean by "retirement")

• Numbers, Numbers, Numbers (how to calculate exactly what you'll spend in retirement by figuring it out today)

• Incoming (how to predict your retirement income from public and private pensions)

• Effective Retirement Planning is About Spending, Not Saving (And Sit Up Straight) (what to do if you can't save enough)

My next (and last) post of the series will help you work out an action plan for the three possible outcomes of Fun With Retirement Calcuators: you aren't saving enough, you're in great shape, or you don't know what the hell you're doing.

*I'm sure you've heard the term "balanced portfolio" before, especially if someone ever geeked out over an Andex Chart in front of you. Generally speaking, it's financial short form for a portfolio that has the classic 60%/40% split between equities and fixed income (held directly or as mutual funds or ETFs)

**Most Canadian calculators still default to retirement at age 65, which will gradually change to 67 as changes to Old Age Security are gradually introduced.

The point: Retirement planning using general assumptions about your future income is just retirement guessing. And - surprise - it's useless. This is why we're doing this retirement series.

Seriously? Three posts into a retirement series and we haven't even answered the question "how much do I need to retire?"

To reiterate (again): we're approaching retirement planning without assumptions, and trying to avoid useless numbers in favour of real ones. Heck, we're even questioning what we mean when we say "retirement". (For another good assumption-busting post, take a look at Jon Chevreau's take on findependence vs. retirement.)

Because you've already done the work in part two to analyze your current spending and project those expenses into the future, you know how much income you'll need. Now we're looking at where it's going to come from.

To that end, here's a retirement calculator, already helpfully filled in with all the information you need to know about your Canada Pension Plan and Old Age Security entitlements:

That guy looks pretty relaxed, right? I mean, for a guy with no savings and no company pension, he just opened up his laptop and found out he'll get $18,702.84 a year from the government when he retires. Sweet!

Put that guy in a suit with a name-tag, replace his slightly confused expression with a confident smile, stick him behind a desk, and he's now qualified to offer retirement planning, thanks to the magic of computers! Hooray!

The Bad News

It's pretty unlikely that you're going to qualify for the maximum amount of CPP. The average benefit paid to retirees at 65 (for now) is $6,415.80 per year, substantially less than the calculator's default of $12,150.

Any "advisor" who gets to this part of a retirement plan and forecasts your government benefits using the default maximum values, or by allowing you to guess at your pension eligibility, isn't worth talking to. In short: he doesn't know what he's talking about.He was given a three hour course on how to use a retirement calculator and set loose on an unsuspecting population to clutter up their filing cabinets with "planning" garbage. Oh, yeah, and to convince you to contribute more to your RRSP.

Are you shocked? Skeptical of my abilities to peer into your private meeting? Let's take a (very)short quiz to see if he knew what he was talking about:

1. Did he ask you for your record of CPP contributions?

2. Did he ask you for a copy of your most recent pension statement?

If the answer to either of these questions is "No", then I'm right, he's wrong, and you've got a useless retirement plan.

And now for the good news

You already have access to precise information about your public and private pension income forecasts based on your past contributions and years of service.

Canada Pension Plan

You can find your Statement of CPP contributions online in your My Service Canada Account. (If you don't already have an account, get one. There's no good reason to not have immediate access to your own information online.)

Here's an example of the amazing things you can learn: based on the actual amount of money you've contributed, and your actual eligible earnings since you turned 18, you can even get an estimate of what your pension would be if you were 65 (or 60, or 70) today.

Old Age Security

OAS is easier and more difficult at the same time. It's easy if you were born earlier than 1958 or later than 1962 and have or will have lived in Canada for 40 years after you turned 18. Both groups of people will receive the maximum amount, which right now is $6552.84. Those born earlier than 1958 will get it when they're 65, and those born later than 1962 will get it when they're 67.

Anyone born in 1957 through to the end of 1962, but live in Canada for 40 years after age 18 will still get the maximum amount, but will have to wait a little later to get it. You can find your exact eligibility date here.

Private Pension

More good news: if you have a defined benefit or contribution plan through your employer, you get a statement every year. That statement tells you exactly when you're eligible to retire and with how much. (What it doesn't tell you, unfortunately, is how underfunded your pension plan might be. That's a post for another day.)

Real numbers are so much fun, aren't they?

Now what?

Now you're armed with some information specific to you: what you want your retirement to look like, how much annual income you think you'll need to cover your expenses, how much CPP and OAS you'll get depending on when you choose to take them, and how much income you should get from your private pension if you have one.

Which means it's almost time for fun with retirement calculators!

This is part four of a six part series on realistic retirement planning. If you're just starting with me, you can read the rest of the series here:

RRSPs: Hunting Season (what banks and brokers are really offering at RRSP season)

Avoiding the Useless Retirement Plan, Step One (figuring out what you mean by "retirement")

Numbers, Numbers, Numbers (how to calculate exactly what you'll spend in retirement by figuring it out today

)Fun With Retirement Calculators (how to get the best use out of a faulty tool)

Effective Retirement Planning is About Spending, Not Saving (And Sit Up Straight) (what to do if you can't save enough)