Most financial services firms suggest people will need 80 per cent of their current income in retirement, but whether your goal is as high as 80 or as low as 50 per cent, you'll still need to invest a lot to achieve it.

And you'll need that high level of savings despite the fact that your house will likely be paid off and you'll no longer be contributing to your RRSPs

While low interest rates make it more attractive to borrow money, they're not much help when it comes to making your retirement savings grow.

Brian St. Denis recently took a ten-year hobby and made it his career, and now as a photographer working for himself, planning for the future is important.

"Certainly for me freelancing, I won't have a pension to rely on, and I need to start thinking long term."

So how much would St. Denis need to put away to retire? That depends on how much of his current income he wants in retirement.

For example, if he currently earns $50,000 per year, plans to retire in 35 years and wants to replace 80 per cent of his working income, then that would come to $40,000 per year.

With inflation, by 2046 that would actually be $112,000 per year, and he would need to have $1.4 million in the bank before he retires.

If he starts saving immediately, he'd have to set aside $1,036 a month, which seems quite steep.

However, St. Denis says "I'm finished school, I don't have a house so I don't have any major debt looming over me at the moment."

But does he really need that much money in retirement?

Lee Anne Davies, with RBC retirement strategies, says "Well the number gets talked about quite a bit. You hear it in all different sorts of marketing."

She believes the 'million dollar retirement' is attainable, but may not be necessary if you want a simpler retirement and have no debt.

So, if St. Denis instead decides he only needs 50 per cent of his working income in retirement, that's $25,000, which with inflation works out to $70,000 in 2046.

In order to retire he would need $890,000 in the bank, which if he starts saving now, works out to $647 per month.

That's a full one third less than what a 'million dollar retirement' might cost him.

Both scenarios assume St. Denis has no workplace pension, and is receiving 30 per cent of his income in retirement from CPP and Old Age Security. It also assumes the money will have to last him for 25 years.

Fortunately, he's already saving "Starting this year I've been adding money to an RRSP, been putting money into Tax Free Savings Accounts."

The same calculations are very different for someone with a workplace pension. Using the same numbers, someone with that benefit would only need to save $370 per month.

For more information or to do your own retirement calculations visit: http://www.fiscalagents.com/toolbox/cal/rrsp/retplanner.shtml

Coming up in part three: Do people think they can put away that level of savings for retirement?