My parents are in a retirement home in Ont, It has been costing them 6 thousand a month. Now my father has to move to a nursing home and therefore their cost of staying in two separate places will increase to 7 thousand per month. So not sure why all the financial people say it costs less to live the older you get?
Personally, i don't think these numbers take into account old age living expenses like nursing homes, since its an unknowable factor, you could live your whole life in your own home or you could end up in a nursing home or possibly pass early. To me most of these numbers act like we are going to be vacationing abroad 6 months a year, while that is true for some, its not like that for everyone, so i think this just helps break down this false idea you need to be a millionaire to retire.
@@Myr3390 If you don't mind living on the street you can retire with no savings at all. It depends on how comfortable you want to be. Regardless, you need 30x what your current annual expediture is saved to maintain the same standard of living if you retire at 65. Fail to do that and you will fall short and be struggling to survive in your last years. And by saved, I mean cash available, excluding the value of your home if you intend to live in it.
Wow, that's way too expensive. They clearly did life wrong. If you want to take advantage of the system. You retire early. Like, well before 65. So you only need money to get you to 65. Then the government looks after you when you turn 65. In Ontario at 65 with no income the government gives you $1900 per month for existing. You can get into low income (affordable) housing which they will take 30% ($570) per month and leave you with $1330 to do as you please. Affordable housing is basically the same thing as a retirement home without the meal plan and group activities. It's like living in an apartment on your own. At 65 living in Ontario you will get very little CPP, and some OAP, but the lovely government will automatically top you up (regardless of how much CPP or OAP you get) with a supplement to the minimum standard which is $1900 as of Oct 2024.(adjusted from 1700 because of the new minimum wage). 6-7k a month is just wasting money they saved up all their lives to live in a retirement home. Which is basically just an apartment with similar aged people around you that has planned activities to do with other old people. If that's worth working your ass off until you're 65 then go for it. Personally, If I was your parents, I would have gone into affordable housing and just gave my kids the retirement money. Or bought a Ferrari and went on crazy trips. Basically just blow it all. If you don't think you can live off $1330 per month while having housing completely paid for, you're delusional and probably lived a very entitled life. I could still have internet, a TV, some kind of gaming device, a mobility scooter (make sure it's faster than your other old buddies scooters). Eat out for breakfast with my old buddy scooter gang. After your 65+ what's better in life than that. And up to 65 you should be out enjoying the world while you're still physically able and can actually remember the places and people you meet. After 65 your health starts declining to the point where you're not going to do all the things you were saving for when you retired. So my point is. Retire early. Do those things. Then let the government take care of your old ass. Just don't forget to join a scooter gang so you're not lonely.
@@shperax did you forget what was found out during the 'vid' years, government does NOT take care of old people! I would not want to live the way the government "takes care" of you in old age!
When my Mom passed away at age 96 she was still in her own home and required no financial assistance from anyone. My Dad had retired at 56 on far less as an equivalent to today than 1.7 million. They spent years living comfortably, eating and living well and taking numerous cruises and vacations. For the last 10-15 years of her life she required far less money than previously because her ways of spending it diminished considerably. When she passed her estate was more valuable than ever, having grown consistently through good management. People need to get professional advice about their specific financial situations rather than relying on media articles.
A couple of years before retirement my Wife was very concerned about having enough to do so and was considering having to work part-time to make ends meet. We consulted a professional financial planner to have a look at our financial situation and we discovered that we were in a very good position to retire without supplemental income and would likely be good for the rest of our lives with proper management. Everyone should get professional help with these things unless they’re well trained themselves.
Fantastic video. It drives me crazy to see attention-grabbing headlines with nothing behind the curtain. You are very good at explaining what's really going on. I saw this headline and shook my head. Thanks for jumping all over this.
I’m retiring next year at 56 with 300k. But I’m relocating to Mexico for one year, then moving to Asia. There’s no way I could retire in Canada unless I work for another 10 years. Life’s too short to be a GenX Canadian retiree 😁
@@WhistleMaster Sad, but true. Everything keeps going up but salaries. Most people are lucky if they see a 2% increase. Everything is increasing faster then our salaries.
Many people decide to retire abroad not not necessarily because cost of living is expensive in Canada but Canadian winter sucks. We are so blessed to have a healthcare system that won’t empty our bank account. It’s not perfect but pretty good. There are many Canadians living on CPP, OAS and perhaps with little other savings. Of cause they need to make some adjustments like moving to a smaller community and other cost saving tips you can find easily these days. You can’t dine out daily and visiting casinos often. Just my 2 cents.
@@rickwilson5611 I'm originally from Thailand, with that amount of money you have you could comfortably live in Thailand, just don't stay in big cities though.
First thing you need to do is calculate what your monthly expenses will be in retirement. Then consider your anticipated income (Savings, CPP, OAS, etc.) and what things you might want to do in retirement. From there you can get a better picture of how much money you will actually need.
$1.7 mil to retire is high for the majority of Canada. I can see it for those who live in parts of Ontario, BC, etc as it's quite expensive to live there. With $1.7 mil invested in dividend paying stocks at 5%, that's ~85k per year to live off. That's 7k per month before taxes. With dividends being taxed lower than normal income, taxes would be less on that as well. This is looking at folks under 65 who aren't collecting OAS or CPP. Depending on the province they live in, they could lower their taxes even more since some provinces allow higher dividend income before being taxed. The main thing is to make sure they have no debt before retiring. Many could probably retire early with 500k to 800k depending on their province. There's a few ETFs out there that include covered call strategies, which pay 8% to 14% in monthly income. The distributions are a mix of dividends, capital gains, and return of capital though. Best to keep these in a TFSA to avoid the tax headache. If I was debt free today and had a chance to retire, I'd probably need $4k monthly after tax to be safe (always want a buffer for extra income incase something happens).
@@alanj9978 Yearly taxes depend on how much is pulled from RRSP each year. If you can keep yourself in a lower tax bracket, then you pay less tax. To help avoid paying higher taxes on forced RRIF withdrawls, usually you want to withdraw fund up to the top of your current tax bracket. Then you take that extra cash and hold in a TFSA etc.
@gerardacronin334 lol...they need more than that actually. Well, not if you die a few years after retirement of course, but if you are around for another 30 or 40 years, 1.7 million is not going to be enough since at advanced age care costs skyrocket. You will run low when you need it the most.
@gerardacronin334 An acceptable standard of living is being able to do everything most people want to do. Simply surviving is not an acceptable standard of living. I think a lot of people get those two things mixed up.
@@Tugela60Dang, then. I will only need 30k/yr in retirement to be satisfied, which means I can retire much much earlier than people who need 90k. With 500k in investments I'll be covered, and I'm half way there. I should hit that before I'm 50 and while living in Victoria.
I think the lesson to take from the BMO survey is that every company that publicizes something may have a vested interest. In the BMO example, it is clearly in the financial services interest to have people save and invest more than needed to generate more fee revenue for them. Kudos to Parallel Wealth for presenting this information and presenting an alternate, facts-based viewpoint
@Ed Prior You’re correct. For every dollar you invested with them. On the bank side of things. They can lend out 9 bucks. On the MF companies. For those ignorant people. They get them into lower ROR and then used their money to invested into higher ROR portfolio.
After several divorces I cannot afford to retire here in Canada with inflation high and CPP not keeping up to the higher cost of living can’t afford to retire especially working in healthcare care in Alberta and no raise in the last 6 going 7 years , so I must keep working to keep a roof over my head ! 😢
I saw the same BMO article and thought it was kinda ridiculous. My wife and I have lived by the motto of “Do the best you can” in regards to saving and investing. Buy used cars, enjoy dinner at home with exceptions and pay yourself first. In 5 yrs when I retire I’ll be getting a financial plan and will adjust my lifestyle up/down based on what Adam recommends! Have a plan and understand retirement is cheaper than raising a family… it’s not really difficult!
Avoid the U.S. stock market like the plague. If you're 60 the odds of the U.S. stock market falling 80+ percent back down to fair market value in your lifetime is almost a certainty.
I really wish they would make it more clear in the article that the number is simple what your average joe thinks they will need. Not experts, not advisors, not people really knowlegable about financial issues. It's very misleading. The reality is that the average person is fairly ignorant about finances and investments. When I saw this article the other day I had a feeling you would be addressing it!
The important point that needs to be mentioned is that the "no go" stage can actually be the most expensive if long term care is required. In a good facility it can be over 100k annually.
Median household income in Canada is about 70K. If you had the same in retirement, you’d be happy. The house is paid for, so you use that former monthly expense to travel. Max CPP and OAS at 65 is about 20K each spouse, total 40K. Shortfall is 30K. Half a million invested at 6% gives you 30K. Verdict, you each need 250K invested. Do-able.
Yeah...he must be talking about the small percentage of rich people...everyone I know is in the same boat as what you just mentioned...$70000 and under before tax when working.
The amount of people I know (mostly middle age men living in Canada) that have just a part-time job(s) making minimum wage, are under employed during what should be their highest wage years, on disability, have little to no benefits provided by their employer and /or other issues that apply is is extremely high. This is why most people I know just ignore these retirement numbers.... Just look at all the elderly cleaning offices at night or are working at Mc Donald's and Tim Hortons is the future for many. Good video btw - just needed to add this to the discussion.
Bang on. Boomers take a lot of flack for screwing the economy, but a bunch of them for screwed or made poor choices as well. You can't afford to live on cpp and OAS unless you own housing outright. And you're screwed if you need a care home.
Do this: Open an account with a discount broker. Start with a TFSA account and high yield dividend income ETFS (HYLD, DFN, HMAX, etc). For every $1000 of etfs you will earn easily $8 to $11 dollars per month. Now that the TFSA contibution limit is $88,0000 that means you can earn $700 and up tax per month tax free!. It is a simple example but effective. The same goes for the RRSP account or just a regular cash account at a brokerage.
We don't usually discuss base costs. I'm not saying $1.7M is the right figure for everyone, what I am asking is does $90K provide an income to meet your expenses and goals? Does drawing $65K in real dollars meet the needs of an 86 year old aging in place or needing a retirement facility in the geography you live within? At the risk of being besieged by the masses, $1.7M doesn't look like a crazy figure (based on where I live...in Ontario).
@calpine4438 65k won't be enough by the time you reach 86, not to maintain the same standard of living. A much greater proportion of your income will go to supplemental support services. When you are 66 those extra costs will be zero for most people, but as they age the cost will go up and by the time they are 86 it will consume most of that 65k, meaning that to maintain the same standard of living you are going to need a significantly higher income in todays dollars.
You do need about 1M net worth in Canada to retire comfortably from 65 to 85. It is true. Whether that NET 1M is a combination of Real Assets and Liquid that's what you need.
Yup! Big topic....(apologies for the pun) Very glad you showed one of your higher end earning clients. Variety is important. A lot to realize in these sorts of presentations. 👍💯
The only chance you have is delay CPP to 70 and take OAS at 65 or you lose all your OAS in a clawback. If you haven't parked money offshore the only other way is putting virtually everything into something that doesn't produce income.
It is if that is the only money you have but we saved and you never want to turn down money available to you so in case you die before then you have just gifted the government your CPP and OAS ...bad move!
Saw this yesterday as well. Complete and utter nonsense. 2/3 of Canadians would be on the street in retirement. Whoever even remotely believes this, do not worry. You can retire on half that.
@@dantonliam Have you priced out anything lately? $125k for a pickup truck. $250 to go out for dinner with the family. $2.5million for a modest cottage in Muskoka.
@@ayela562 You're welcome to eat all the cat food you want. I do need those things to have a successful retirement. Having a pickup truck, going out to dinner with family and a nice cottage in Muskoka isn't asking for much.
I would suggest a two point survey next time .. how much money Canadians think they need to retire, AND, how much they think they need to save per month to get it
I’m worried about retirement planning and I want to ensure a comfortable future. I’ve worked hard my entire life and I want to enjoy the fruits of my labor without financial stress. I’m really concerned about whether I’ve saved enough and invested wisely.
Right on Adam. Those of us in the know already realise that this article was complete BS. However....maybe it will kick start some folks into actually getting serious about financial planning and their futures.
It's hard to save when every last dime goes to taxes. I make a good living and I have no debt, but my mortgage. There is nothing left over after you pay the mortgage, food, electricity, etc.
$1.7M for a COUPLE it makes sense($850k each). 30 years worth of retirement = $57k/yr(Pre-Tax) That is not a ridiculous amount, especially considering what you can purchase with $57k today vs $57k in 30 years. Now, how you get to $57k/yr (including CPP,etc.) is a different story.
It makes sense that if people don't know how much they will need in retirement, and that they think they will need 1.7 million, that they don't feel prepared for retirement. Unless you enter retirement with the same debt load and expenses as you have in your 30s and 40s, you definitely do not need 1.7 million. Your physical health will play a big part in this as well. Start taking care of your finances and your body in your 30s and 40s (or earlier) and you can stay in your paid off home well into old age.
Im 42 my retirement planning started in my early 30s. I was very clear with my wife that ibwanted a reiltirement nest egg first before a house so that compunding will do most of the work. In my TFSA alone i prohect that by the time i retire the nest egg (no added contributions) will be in that range. Add to the fact income will be tax free the equivalent in gross will be more than sufficient. Until then im focused on paying off the mortgage and funding the kid's university. That said i dont "need" that much to retire. It just goves me the money i need to live the lifestyle i want and still leave something for the kid.
I was going to retire this month , but with the current market, my current value of my RRSP gone down a lot. Changed my mind and continue to work past 65. Still not sure how needed to retire.
Will both retire at 55. Estimate about $6MM with DB pensions at retirement. We plan to travel extensively and live abroad parts of the year, health/emergency evac coverage is not cheap. I'd rather have more and donate it to charity, than not have enough.
I feel the same way. Our target is $5MM at 55. Good jobs but not amazing jobs, just living within means and saving/investing. Plan to leave at least what I have at retirement age to the next generation.
At retirement one has paid off the mortgage so how does one spend $85K? I live just fine on my CPP/OAS in Toronto with a few dollars from my RIF for travel and other indulgences each year. Don’t think I could spend $85K until I moved into a home where it costs $6-7K a month for lodging/food. And in my planning it will be my condo sale proceeds that will cover that expense for my final 10 years or so.
I recently retired in Europe. For the last 2 years, I've been travelling to Canada and bringing back thousands of Euros in my pocket. Is there an episode that explains how to get the best exchange rates into my European bank account?
Love this content. Would love for you to do some videos on early retirement. Ie, FIRE. A lot of the numbers you use are for 60,65 yo folks. Would be great to see what retiring at 45 or 50 is like. Thanks!
It depends if you have a pension or not. In general you need to look at the type of lifestyle you want and where you want to live. That will tell you what amount of cash you need when you’re no longer making a wage. For those with a full pension that lasts until you die, you get a bigger safety net than someone who has defined contribution plans where all you have is what you saved plus what the government is willing to give. So for the easiest calculation it’s looking at your current situation and how much money you need to spend every year to get by than multiplying it by how many years you want to be retired before you die. If you don’t figure that out carefully you could outlive your savings.
In Canada you need likely 80k a year to live comfortably go on some cruises or vacations during your retirement and for the later years you will need a minimum of 50k for in home assistance as you age out. I agree most people won't make it to 95 plus, but, when it comes to retirement you want to make sure you have the income to ride you to that age regardless if you make it or not because at 85 to 90 you don't want to be questioning if your finances are going to make it last those final years and put a burden on your family if your family is even willing. Over all more is always better because what you don't use just gets passed down any way.
4% of $1.7M is $68K a year; that sounds about right if you plan on living 30-40 years in retirement. $1.7M might actually be light if you live in Toronto or Vancity.
Great Video as usual. How would your hours factor into this calculation, if its value was $800K today and you move into a retirement home at 80 years old. And assuming you have the 1.7M that is the topic of this discussion. Do you account for liquidating your home to pay for the retirement lodging? On a coffee break:)
Don't worry about medical care...The government will take care of you ;) At least here in Quebec. But be prepared to be parked in a small room until the end....
Being able to retire comfortably is not just how much money do you need. It is realiant on several factors. What retirement incomes do you have. 1. Pensions 2. RRSPs 3. Savings 4. Investments Next 1. How Much Debt will you have when you retire, this includes mortgages and Loans. 2. How Much do you spend to maintain your lifestyle. Do you have a extravigant Lifestyle or a Frugal one. I was able to retire at age 55 after 38 years in the Canadian Military and I can without a doubt, tell you that my pension IS NOT 1.7 Million dollars. I retired Debt Free and even though I now have a Small Mortgage it is not a burden. Financial retirement is not how much you make, it is how much you spend.
100% agree. Greedy at 20, greedy at 75. Even if you have 2 millions when you retire, if you have lived life in a cheap way, you will not change in your 70s and all the saving goes to someone else. It is how you spend and not how much you make, you are right.
With what inflation has done in the past couple of years, how on earth can one ACCURATELY determine what you need if you were hoping to retire 10 to 20 years from now?
@yarrdayarrdayarrda Because you have investments, and those should be more or less keeping pace with inflation. The amount you have now, divided by the number of years you could reasonably be expected to live, is what your budget is. Which has to be increased taking inflation into account each year. For example roughly speaking, if you are 65 today, and anticipate living to 100, you will need a net worth of around 3.5 million to have an effective income of 100k a year in todays money. The net worth can be reduced if your annual living expenses are lower, or if you are going to be dieing sooner (for example, at 80 or 90 instead of 100). It is pretty easy to calculate roughly how much you need to retire at any particular time in your life using those basic parameters as your input. How long do you expect you will need to provide income for? How much do you need to live (in todays money) on? How much do you have saved if all your assets were disposed of? Keep in mind you need to have some room for contingency to account for added expense at exteme old age and variability in the state of the economy.
One thing I’m seeing in the tech industry is a lot of older employees that just refuse to retire even though they have enough saved and are already collecting CPP. I have no idea why. These people are over 70 and still working a stressful job. I’m sure that’s not good for your health. Personally I would love to retire as early as possible but that is very difficult. Years ago there was a study by Boeing that discovered that people live much longer if they retire at 55 rather than 65. It’s 10 years less stress on your life so it makes perfect sense. I feel like many people are lowering their life expectancy by needlessly working way too long.
I could see this If the 1.7 million was savings only. If say, the money was invested in a rental property where you are drawing an income and, at the same time, maintaining your capital, you get by with less. You could also work part time.
Great video Adam. Does this into account the possibility of needing more $$ later for things like extra care - or housing (ie: old age home/apartment). The costs on those in ON are near $8-9K/month (this is all in! - lodging, food etc.)?
Good, realistic presentation. All these doom and gloom articles seem to come out during RRSP season and are authored by some financial institution lol.
Assuming OAS will always exist is dangerous. There's been a tremendous amount of pushback against it recently - or at least calls to make it wealth tested instead of income tested.
This is people who still don't recognise the extent of their sense of entitlement. I live very well on less than $25,000 a year. Nice apartment, nice little Honda FIT, eat healthily, take 1 trip a year. Still able to put aside a couple hundred a year. I'm 75, meds-free, and live a life of gratitude.
Considering my wife’s sister has lived of a single minimum wage salary $35k/yr for a family in a small town for a number of years means not everyone needs $70k+ a year to live.
Why do you consider this 'an entitlement'. If people invested in themselves by getting a worthwhile education while in their 20's, should they not be able to enjoy the rewards? My spouse and I have have 5 degrees between us, worked full time while getting degrees in Engineering, Architecture and MBA with no student debt. The degrees weren't handed to us, we worked for them. Our career paths haven't been handed to us, we climbed the ladder. If we want to retire on $250K/yr, why shouldn't we be able to? I can guarantee we'll leave more to charity than most posters here that are judging the 'entitled'. I also suspect we'll pay more in taxes than what some people earn in a lifetime.
It is very nice that you are satisfied with your life. But isn't it sad that we work hard all our life and then have to live on minimal income in retirement? Not being able to afford doing finally something nice? While others, like our politicians have high incomes for a few years and then they can already retire and live a luxury life? I hope God makes that up in eternity! That's why I am ok with it. Just because Jesus told us that the treasures on earth mean nothing. Love to you ❤
You need - low debt - low personal commitments - become mortgage free - drive no car - rental income from your residence / as far as investment income - Banks / telecom / electrical utilities - you will then stand a better chance without living in a cash crunch - (Yes) it still takes a million dollars of investable assets to generate at least $50,000 of dividend income
40s is THE best time to invest in your retirement, I would say if you haven't started its even a little late. You can use the 72 rule to illustrate this . If you think your investment will generate an average of 3% it would take 24 years to double your money (72/3). that means you would be 68 years old... Cheers, a
Best advice. Find something to do under the table(side hustle) and keep the federal government out of your wallet. They took 48% of my paychecks and when I needed healthcare, it was'nt there. I averaged 100k a year for 30 years, with my best year close to 200. I was ashamed of myself for making 200. Why? Because I paid 100 in income tax. I bought the RRSP'S and GIC'S, they make things look good, in the end they will get your money and so will the bank(in fee's).
@@louismeloche3857 Actually Louis there are a few flaws in that way of thinking. I am not going to mention them all but for example CAD pension plan takes the best (I think) 12 years of your life income to determine what your pension will be. If you made 20 years of declared 100k$/yr you get your calculation at 100k/yr, but if you did 20yr undeclared 100k$/yr say 50k declared 50k not declared well you just cut your CAD pension cheques in half. There are also other benefits in the tax free investments you can make with declared income and other advantages. I will agree there is a bit of 'wiggle room' between declared and not declared, there are also risks associated with it. AND THIS IS WHY: You need someone like Adam at WS. Cheers.
My honest opinion. If you have a house that is paid off , you only need about half a million above that . Together with OAS & CPP , you can live off the interest on half a million . The budget would be tighter if you're renting , a little more than that would be better .
What about if you own a home, and are still paying a mortgage and upkeep? what a bout owning a car? The majority of us are not going to be able to sock away 750k in RRSP's.
I want this guy managing my money. I have one of the best pensions in Ontario and I’m watching people that have retired from this line of work taking on other jobs cause there’s not enough money in the pension to keep yourself from being broke should something happen like needing to buy a vehicle or bigger maintenance on your house you weren’t expecting. Pension is $60,000.00 a year. Retirement age is 55.
I’m actually still a bit confused. Are you saying a married couple needs around $750k+$100k or are you saying as a married couple each of you needs $750k+$100k? (Approx)
So, I expect BMO is assuming that BMO will be providing the financial services for your rrif and capital investing. They will charge 0.9% of your gross value every year. That's a minimum. Don't count on OAS or CPP. OAS can be entirely clawed back.
Here’s what I have witnessed from friends/relatives who have and are retired. They don’t know because they don’t talk to someone who’s qualified and can run the retirement calculations. Then understanding what this means together with an update annually. Knowing your own cost of living plus one time purchases over time. It’s not difficult, just seek out the correct knowledgeable professionals to assist you
I think the secret sauce is to have $10 more per month than you need in perpetuity. Pensions, dividends, business income, rental income, side hustle. Don't need any particular large chunk of cash just income forever.
I'd love to have a million dollars but I don't and I'm doing fine. My mortgage and car are paid off and I live a modest life style. Old age and Canada pension help a lot.
I have a nice indexed pension that I got at a pretty young age, so I only save for splurging money, for later on... I'm not rich, but I used my work earnings to DO interesting things, instead of saving money and NOT doing anything.
As a Canadian millennial , I have come to terms that I will never retire. Once I realized that, my whole mentality changed when it came to making money as well as my career path. Now I am doing something that I love and don’t mind doing it for the rest of my life.
You seem to be omitting long term care costs at end of life. This can hit over 100K each annually for a nice private place. What do you recommend here?
So these numbers are just for the top 1%, right? I easily live on less than $2000/mo. What are Dave and Ruth doing in retirement? Driving Maseratis and Wintering in Monte Carlo?
I’ll be watching for you to produce the video about Canadians that have worked in the USA and subsequently transfer their employer 401k’s to RRSP’s in Canada. I was assessed a 30% withholding and have not found a way to recover that loss. What will be the video name/title? I don’t want to miss that one.
The reasons most people don't think they will retire between 60-69 are that they are clueless or have a defined benefit pension with a magic number. Most people assume you just work and one day you retire and live a wonderful life without saving or planning.
This is all well and good if you have a home. Housing is out of reach for most people. Tag on another $3500 per month in housing costs to your calculations.
Retired last week! Just turned 60. $5000 a month + $850,000 earning 5% in RRSP + $730 per month of CPP and I am still worried... This runaway inflation is killing us...
So on average they would have had jobs that paid them monthly a lot of money. IF a person invested $1,200.00 per month....for 40 yrs they would have just over 500,000.00 for RRSP. I know that is without any return, but in the reality most Canadians would not even have that much of savings. I served 24 yrs in the CAF (RCN) and saved as much as I can and I am nearing retirement age and only have 200K in RRSP, 75K in Tax Free but I have no where these numbers. Where did I go wrong?
Hi Adam...Question...why are the taxes so low?...I see they are between 9-11% but I believe they would be at least 12% in Ontario...also does CRA move these tax brackets up by the same inflation % as the CPP payments?...otherwise you can quickly get into the 22% tax bracket by the 4th year...thanks for all your valuable advice Adam!
@@tracylawther7384 Yes. They do. Most people should realize a return when they file, but unlike money we “owe” the government at tax time, this return does not come with interest on our money that the government took unnecessarily. ;-)
The average cananadian income is a little over 61k, and they're probably just struggling to survive. There isn't any chance that most Canadians could earn enough to properly prepare for retirement. I bet if you did a pole, asking about retirement savings, many would't even have 20k.
If you do not take cpp or Canadian pension- OAS - at - until - 71 years old - what is the benefit - if any??? You collect both oas and cpp at age 71 years old - instead of age 70 - what or could happen - then ?? any answers would be much appreciated - Thank you - Sincerely - WILLIAM AND WILMA GREENWOOD
Both CPP and OAS stop increasing at age 70 (other than increasing with inflation and the YMPE), so if you wait until 71, you've just lost an entire year of income from both for no advantage. There's no benefit to waiting until 71.
1.7million divided by 25 years is $68,000/year. That's what I see. I think that is probably what most people will need, especially if you still have a mortgage payment. Where does the 68k come from? Cpp and oas might get you 1500-2000/ month. So a couple may get 48k per year from the government of your lucky. The question is where does the other 20k per year come from? If you had saved 500k in rrsp. That should cover the difference. But that is still a massive number that I would say most don't have.
People retiring early might also have mortgages going. Maybe that’s why they think they need so much more money to retire. And todays mortgages are so high.
Based on my current lifestyle and expenses, I can retire on $200k if I also own my own home. However, I'm aiming more for $500k-$600k just to ensure a more conformable retirement and have more breathing room
My parents are in a retirement home in Ont, It has been costing them 6 thousand a month. Now my father has to move to a nursing home and therefore their cost of staying in two separate places will increase to 7 thousand per month. So not sure why all the financial people say it costs less to live the older you get?
@@ruthwall4455 They are talking about independent living. When you are in some sort of facility or have a caregiver, the bills go up very quickly.
Personally, i don't think these numbers take into account old age living expenses like nursing homes, since its an unknowable factor, you could live your whole life in your own home or you could end up in a nursing home or possibly pass early. To me most of these numbers act like we are going to be vacationing abroad 6 months a year, while that is true for some, its not like that for everyone, so i think this just helps break down this false idea you need to be a millionaire to retire.
@@Myr3390 If you don't mind living on the street you can retire with no savings at all. It depends on how comfortable you want to be.
Regardless, you need 30x what your current annual expediture is saved to maintain the same standard of living if you retire at 65. Fail to do that and you will fall short and be struggling to survive in your last years. And by saved, I mean cash available, excluding the value of your home if you intend to live in it.
Wow, that's way too expensive. They clearly did life wrong. If you want to take advantage of the system. You retire early. Like, well before 65. So you only need money to get you to 65. Then the government looks after you when you turn 65. In Ontario at 65 with no income the government gives you $1900 per month for existing. You can get into low income (affordable) housing which they will take 30% ($570) per month and leave you with $1330 to do as you please. Affordable housing is basically the same thing as a retirement home without the meal plan and group activities. It's like living in an apartment on your own. At 65 living in Ontario you will get very little CPP, and some OAP, but the lovely government will automatically top you up (regardless of how much CPP or OAP you get) with a supplement to the minimum standard which is $1900 as of Oct 2024.(adjusted from 1700 because of the new minimum wage). 6-7k a month is just wasting money they saved up all their lives to live in a retirement home. Which is basically just an apartment with similar aged people around you that has planned activities to do with other old people. If that's worth working your ass off until you're 65 then go for it. Personally, If I was your parents, I would have gone into affordable housing and just gave my kids the retirement money. Or bought a Ferrari and went on crazy trips. Basically just blow it all. If you don't think you can live off $1330 per month while having housing completely paid for, you're delusional and probably lived a very entitled life. I could still have internet, a TV, some kind of gaming device, a mobility scooter (make sure it's faster than your other old buddies scooters). Eat out for breakfast with my old buddy scooter gang. After your 65+ what's better in life than that. And up to 65 you should be out enjoying the world while you're still physically able and can actually remember the places and people you meet. After 65 your health starts declining to the point where you're not going to do all the things you were saving for when you retired. So my point is. Retire early. Do those things. Then let the government take care of your old ass. Just don't forget to join a scooter gang so you're not lonely.
@@shperax did you forget what was found out during the 'vid' years, government does NOT take care of old people! I would not want to live the way the government "takes care" of you in old age!
When my Mom passed away at age 96 she was still in her own home and required no financial assistance from anyone. My Dad had retired at 56 on far less as an equivalent to today than 1.7 million. They spent years living comfortably, eating and living well and taking numerous cruises and vacations. For the last 10-15 years of her life she required far less money than previously because her ways of spending it diminished considerably. When she passed her estate was more valuable than ever, having grown consistently through good management. People need to get professional advice about their specific financial situations rather than relying on media articles.
A couple of years before retirement my Wife was very concerned about having enough to do so and was considering having to work part-time to make ends meet. We consulted a professional financial planner to have a look at our financial situation and we discovered that we were in a very good position to retire without supplemental income and would likely be good for the rest of our lives with proper management. Everyone should get professional help with these things unless they’re well trained themselves.
Thanks for sharing Robert
So true.
Fantastic video. It drives me crazy to see attention-grabbing headlines with nothing behind the curtain. You are very good at explaining what's really going on. I saw this headline and shook my head. Thanks for jumping all over this.
Glad it was helpful!
@@ParallelWealth It’s was indeed.
Oops. It was indeed.
That’s CBC for you… it’s all they do. So sick of media in this country!!!
I’m retiring next year at 56 with 300k. But I’m relocating to Mexico for one year, then moving to Asia. There’s no way I could retire in Canada unless I work for another 10 years. Life’s too short to be a GenX Canadian retiree 😁
This so sad!!
@@WhistleMaster Sad, but true. Everything keeps going up but salaries. Most people are lucky if they see a 2% increase. Everything is increasing faster then our salaries.
what country if you dont mind me asking most ask for 500k bank transfer
Many people decide to retire abroad not not necessarily because cost of living is expensive in Canada but Canadian winter sucks. We are so blessed to have a healthcare system that won’t empty our bank account. It’s not perfect but pretty good.
There are many Canadians living on CPP, OAS and perhaps with little other savings. Of cause they need to make some adjustments like moving to a smaller community and other cost saving tips you can find easily these days. You can’t dine out daily and visiting casinos often. Just my 2 cents.
@@rickwilson5611 I'm originally from Thailand, with that amount of money you have you could comfortably live in Thailand, just don't stay in big cities though.
First thing you need to do is calculate what your monthly expenses will be in retirement. Then consider your anticipated income (Savings, CPP, OAS, etc.) and what things you might want to do in retirement. From there you can get a better picture of how much money you will actually need.
$1.7 mil to retire is high for the majority of Canada. I can see it for those who live in parts of Ontario, BC, etc as it's quite expensive to live there. With $1.7 mil invested in dividend paying stocks at 5%, that's ~85k per year to live off. That's 7k per month before taxes. With dividends being taxed lower than normal income, taxes would be less on that as well. This is looking at folks under 65 who aren't collecting OAS or CPP. Depending on the province they live in, they could lower their taxes even more since some provinces allow higher dividend income before being taxed. The main thing is to make sure they have no debt before retiring. Many could probably retire early with 500k to 800k depending on their province. There's a few ETFs out there that include covered call strategies, which pay 8% to 14% in monthly income. The distributions are a mix of dividends, capital gains, and return of capital though. Best to keep these in a TFSA to avoid the tax headache. If I was debt free today and had a chance to retire, I'd probably need $4k monthly after tax to be safe (always want a buffer for extra income incase something happens).
Almost no one has 1.7 outside RRSPs, so you do have to account for full income tax on a large amount of that.
@@alanj9978 Yearly taxes depend on how much is pulled from RRSP each year. If you can keep yourself in a lower tax bracket, then you pay less tax. To help avoid paying higher taxes on forced RRIF withdrawls, usually you want to withdraw fund up to the top of your current tax bracket. Then you take that extra cash and hold in a TFSA etc.
That's only lower for Canadian stocks.... so does that mean you want to GAMBLE everything on 5 BIG BANKS ?
Just because people THINK they need $1.7 million does not mean that they are right.
TRUE!!!!!!!!
@gerardacronin334 lol...they need more than that actually. Well, not if you die a few years after retirement of course, but if you are around for another 30 or 40 years, 1.7 million is not going to be enough since at advanced age care costs skyrocket. You will run low when you need it the most.
@@Tugela60 It all depends on what you consider an acceptable standard of living.
@gerardacronin334 An acceptable standard of living is being able to do everything most people want to do. Simply surviving is not an acceptable standard of living. I think a lot of people get those two things mixed up.
@@Tugela60Dang, then. I will only need 30k/yr in retirement to be satisfied, which means I can retire much much earlier than people who need 90k. With 500k in investments I'll be covered, and I'm half way there. I should hit that before I'm 50 and while living in Victoria.
I think the lesson to take from the BMO survey is that every company that publicizes something may have a vested interest. In the BMO example, it is clearly in the financial services interest to have people save and invest more than needed to generate more fee revenue for them.
Kudos to Parallel Wealth for presenting this information and presenting an alternate, facts-based viewpoint
Thanks Ed - and you make a very valid point here.
@@ParallelWealth Totally agree !! Remember Liberty 55 ???
@@ParallelWealth yup. Get people to invest in markets when they are about to tank..
@Ed Prior
You’re correct. For every dollar you invested with them. On the bank side of things. They can lend out 9 bucks. On the MF companies. For those ignorant people. They get them into lower ROR and then used their money to invested into higher ROR portfolio.
After several divorces I cannot afford to retire here in Canada with inflation high and CPP not keeping up to the higher cost of living can’t afford to retire especially working in healthcare care in Alberta and no raise in the last 6 going 7 years , so I must keep working to keep a roof over my head ! 😢
I saw the same BMO article and thought it was kinda ridiculous. My wife and I have lived by the motto of “Do the best you can” in regards to saving and investing. Buy used cars, enjoy dinner at home with exceptions and pay yourself first. In 5 yrs when I retire I’ll be getting a financial plan and will adjust my lifestyle up/down based on what Adam recommends! Have a plan and understand retirement is cheaper than raising a family… it’s not really difficult!
Avoid the U.S. stock market like the plague. If you're 60 the odds of the U.S. stock market falling 80+ percent back down to fair market value in your lifetime is almost a certainty.
I really wish they would make it more clear in the article that the number is simple what your average joe thinks they will need. Not experts, not advisors, not people really knowlegable about financial issues. It's very misleading. The reality is that the average person is fairly ignorant about finances and investments. When I saw this article the other day I had a feeling you would be addressing it!
It is a survey and if you have a bunch of Canadians living beyond their means taking it, it's going to skew the number higher.
Bang on. My 95 years old mother comfortably lives on about $CDN 26,000/yr in a nice geared-to-income residence in Oakville ON and SAVES money!
Living like a King on $2000/m in the Philippines. Age 60. Best move ever!
Great plan, I'm not far behind you
that's nice. LOL
yeah, but moving to a Third World nation and all the risks that entails isn't for everyone
Hopefully you won't need an old folks home anytime soon 👍
The important point that needs to be mentioned is that the "no go" stage can actually be the most expensive if long term care is required. In a good facility it can be over 100k annually.
Median household income in Canada is about 70K. If you had the same in retirement, you’d be happy. The house is paid for, so you use that former monthly expense to travel. Max CPP and OAS at 65 is about 20K each spouse, total 40K. Shortfall is 30K. Half a million invested at 6% gives you 30K. Verdict, you each need 250K invested. Do-able.
Yeah...he must be talking about the small percentage of rich people...everyone I know is in the same boat as what you just mentioned...$70000 and under before tax when working.
My retirement plan is to work until I’m mentally or physically unable to and hope I saved enough (not likely)
The amount of people I know (mostly middle age men living in Canada) that have just a part-time job(s) making minimum wage, are under employed during what should be their highest wage years, on disability, have little to no benefits provided by their employer and /or other issues that apply is is extremely high. This is why most people I know just ignore these retirement numbers.... Just look at all the elderly cleaning offices at night or are working at Mc Donald's and Tim Hortons is the future for many. Good video btw - just needed to add this to the discussion.
Bang on. Boomers take a lot of flack for screwing the economy, but a bunch of them for screwed or made poor choices as well. You can't afford to live on cpp and OAS unless you own housing outright. And you're screwed if you need a care home.
Do this: Open an account with a discount broker. Start with a TFSA account and high yield dividend income ETFS (HYLD, DFN, HMAX, etc). For every $1000 of etfs you will earn easily $8 to $11 dollars per month. Now that the TFSA contibution limit is $88,0000 that means you can earn $700 and up tax per month tax free!. It is a simple example but effective. The same goes for the RRSP account or just a regular cash account at a brokerage.
We don't usually discuss base costs. I'm not saying $1.7M is the right figure for everyone, what I am asking is does $90K provide an income to meet your expenses and goals? Does drawing $65K in real dollars meet the needs of an 86 year old aging in place or needing a retirement facility in the geography you live within? At the risk of being besieged by the masses, $1.7M doesn't look like a crazy figure (based on where I live...in Ontario).
@calpine4438 65k won't be enough by the time you reach 86, not to maintain the same standard of living. A much greater proportion of your income will go to supplemental support services. When you are 66 those extra costs will be zero for most people, but as they age the cost will go up and by the time they are 86 it will consume most of that 65k, meaning that to maintain the same standard of living you are going to need a significantly higher income in todays dollars.
You do need about 1M net worth in Canada to retire comfortably from 65 to 85. It is true. Whether that NET 1M is a combination of Real Assets and Liquid that's what you need.
Yup! Big topic....(apologies for the pun) Very glad you showed one of your higher end earning clients. Variety is important. A lot to realize in these sorts of presentations. 👍💯
EXCELLENT video Adam....I totally agree with you. Also, if you can delay OAS and CCP ( RRQ here in Quebec) to 67-70, this is a big plus in my opinion.
The only chance you have is delay CPP to 70 and take OAS at 65 or you lose all your OAS in a clawback. If you haven't parked money offshore the only other way is putting virtually everything into something that doesn't produce income.
It is if that is the only money you have but we saved and you never want to turn down money available to you so in case you die before then you have just gifted the government your CPP and OAS ...bad move!
@@lornamcneil8113 Life is full of risk taking and statistics !!! Proceed accordingly !!
If a couple has passed 60 it is overwhelmingly likely one of them will be over 90. Plan accordingly. @@lornamcneil8113
Quebec can pound sand. Blanchet at the trough acting like a spoiled child.
Saw this yesterday as well. Complete and utter nonsense. 2/3 of Canadians would be on the street in retirement. Whoever even remotely believes this, do not worry. You can retire on half that.
Yup. I don’t know who needs 90k a year to retire on. It’s ridiculous.
@@dantonliam Have you priced out anything lately? $125k for a pickup truck. $250 to go out for dinner with the family. $2.5million for a modest cottage in Muskoka.
I have half of that half
@@tlr-nut7275 your point ? Nobody NEEDS any of those things to retire.
@@ayela562 You're welcome to eat all the cat food you want. I do need those things to have a successful retirement. Having a pickup truck, going out to dinner with family and a nice cottage in Muskoka isn't asking for much.
if you have a defined pension plan plus you ge OAS & CCP. dont think you require it
I would suggest a two point survey next time .. how much money Canadians think they need to retire, AND, how much they think they need to save per month to get it
I’m worried about retirement planning and I want to ensure a comfortable future. I’ve worked hard my entire life and I want to enjoy the fruits of my labor without financial stress. I’m really concerned about whether I’ve saved enough and invested wisely.
Yes I have. But I don’t know who exactly to trust to provide the right advices and guidance for me.
Right on Adam. Those of us in the know already realise that this article was complete BS. However....maybe it will kick start some folks into actually getting serious about financial planning and their futures.
It's hard to save when every last dime goes to taxes. I make a good living and I have no debt, but my mortgage. There is nothing left over after you pay the mortgage, food, electricity, etc.
@@tidy House rich, mortgage poor?
$1.7M for a COUPLE it makes sense($850k each). 30 years worth of retirement = $57k/yr(Pre-Tax) That is not a ridiculous amount, especially considering what you can purchase with $57k today vs $57k in 30 years. Now, how you get to $57k/yr (including CPP,etc.) is a different story.
Did you watch the whole video? I break it all down to the dollar!
It makes sense that if people don't know how much they will need in retirement, and that they think they will need 1.7 million, that they don't feel prepared for retirement.
Unless you enter retirement with the same debt load and expenses as you have in your 30s and 40s, you definitely do not need 1.7 million.
Your physical health will play a big part in this as well.
Start taking care of your finances and your body in your 30s and 40s (or earlier) and you can stay in your paid off home well into old age.
Grest video Adam! Thanks for breaking it down like always.
Im 42 my retirement planning started in my early 30s. I was very clear with my wife that ibwanted a reiltirement nest egg first before a house so that compunding will do most of the work. In my TFSA alone i prohect that by the time i retire the nest egg (no added contributions) will be in that range. Add to the fact income will be tax free the equivalent in gross will be more than sufficient. Until then im focused on paying off the mortgage and funding the kid's university. That said i dont "need" that much to retire. It just goves me the money i need to live the lifestyle i want and still leave something for the kid.
I was going to retire this month , but with the current market, my current value of my RRSP gone down a lot. Changed my mind and continue to work past 65. Still not sure how needed to retire.
Yes - I saw this and disagreed immediately. These headlines serve no purpose..."context is everything" as they say....
Will both retire at 55. Estimate about $6MM with DB pensions at retirement. We plan to travel extensively and live abroad parts of the year, health/emergency evac coverage is not cheap. I'd rather have more and donate it to charity, than not have enough.
I feel the same way. Our target is $5MM at 55. Good jobs but not amazing jobs, just living within means and saving/investing. Plan to leave at least what I have at retirement age to the next generation.
Another great video Adam, keep them coming we are all eager to watch and learn! Thanks.
Thanks, will do!
At retirement one has paid off the mortgage so how does one spend $85K? I live just fine on my CPP/OAS in Toronto with a few dollars from my RIF for travel and other indulgences each year. Don’t think I could spend $85K until I moved into a home where it costs $6-7K a month for lodging/food. And in my planning it will be my condo sale proceeds that will cover that expense for my final 10 years or so.
I recently retired in Europe. For the last 2 years, I've been travelling to Canada and bringing back thousands of Euros in my pocket. Is there an episode that explains how to get the best exchange rates into my European bank account?
Love this content. Would love for you to do some videos on early retirement. Ie, FIRE.
A lot of the numbers you use are for 60,65 yo folks. Would be great to see what retiring at 45 or 50 is like. Thanks!
It depends if you have a pension or not. In general you need to look at the type of lifestyle you want and where you want to live. That will tell you what amount of cash you need when you’re no longer making a wage.
For those with a full pension that lasts until you die, you get a bigger safety net than someone who has defined contribution plans where all you have is what you saved plus what the government is willing to give.
So for the easiest calculation it’s looking at your current situation and how much money you need to spend every year to get by than multiplying it by how many years you want to be retired before you die. If you don’t figure that out carefully you could outlive your savings.
In Canada you need likely 80k a year to live comfortably go on some cruises or vacations during your retirement and for the later years you will need a minimum of 50k for in home assistance as you age out.
I agree most people won't make it to 95 plus, but, when it comes to retirement you want to make sure you have the income to ride you to that age regardless if you make it or not because at 85 to 90 you don't want to be questioning if your finances are going to make it last those final years and put a burden on your family if your family is even willing.
Over all more is always better because what you don't use just gets passed down any way.
I don’t really plan on retiring, don’t think I can but also love my job even though the pay isn’t keeping up with any price changes
Great video thank you
4% of $1.7M is $68K a year; that sounds about right if you plan on living 30-40 years in retirement. $1.7M might actually be light if you live in Toronto or Vancity.
Don't forget about inflation!
Great Video as usual. How would your hours factor into this calculation, if its value was $800K today and you move into a retirement home at 80 years old. And assuming you have the 1.7M that is the topic of this discussion. Do you account for liquidating your home to pay for the retirement lodging? On a coffee break:)
Awesome video! 😊
As you get older, your medical and care expenses go up. I’m confused as to why you would plan to have less as you get older.
Don't worry about medical care...The government will take care of you ;) At least here in Quebec. But be prepared to be parked in a small room until the end....
April, somewhat true...and assume you own a house. If no house, then plan would look a little different
@@1983dmd Government plan for your health is assisted suicide.
Being able to retire comfortably is not just how much money do you need.
It is realiant on several factors.
What retirement incomes do you have.
1. Pensions
2. RRSPs
3. Savings
4. Investments
Next
1. How Much Debt will you have when you retire, this includes mortgages and Loans.
2. How Much do you spend to maintain your lifestyle. Do you have a extravigant Lifestyle or a Frugal one.
I was able to retire at age 55 after 38 years in the Canadian Military and I can without a doubt, tell you that my pension IS NOT 1.7 Million dollars.
I retired Debt Free and even though I now have a Small Mortgage it is not a burden.
Financial retirement is not how much you make, it is how much you spend.
100% agree. Greedy at 20, greedy at 75. Even if you have 2 millions when you retire, if you have lived life in a cheap way, you will not change in your 70s and all the saving goes to someone else. It is how you spend and not how much you make, you are right.
Awesome video Adam
Thanks 👍
With what inflation has done in the past couple of years, how on earth can one ACCURATELY determine what you need if you were hoping to retire 10 to 20 years from now?
@yarrdayarrdayarrda Because you have investments, and those should be more or less keeping pace with inflation. The amount you have now, divided by the number of years you could reasonably be expected to live, is what your budget is. Which has to be increased taking inflation into account each year.
For example roughly speaking, if you are 65 today, and anticipate living to 100, you will need a net worth of around 3.5 million to have an effective income of 100k a year in todays money. The net worth can be reduced if your annual living expenses are lower, or if you are going to be dieing sooner (for example, at 80 or 90 instead of 100). It is pretty easy to calculate roughly how much you need to retire at any particular time in your life using those basic parameters as your input.
How long do you expect you will need to provide income for?
How much do you need to live (in todays money) on?
How much do you have saved if all your assets were disposed of?
Keep in mind you need to have some room for contingency to account for added expense at exteme old age and variability in the state of the economy.
Great info Adam. What would that look like for singles?
Essentially divide by 2, seeing that this couple had equal assets.
It is an accurate number for me personally.
Love it! Enjoy:)
Wonderful video as always!
Thanks Cynthia
Excellent video as always Adam. 🙏
Thanks Ash
One thing I’m seeing in the tech industry is a lot of older employees that just refuse to retire even though they have enough saved and are already collecting CPP. I have no idea why. These people are over 70 and still working a stressful job. I’m sure that’s not good for your health. Personally I would love to retire as early as possible but that is very difficult. Years ago there was a study by Boeing that discovered that people live much longer if they retire at 55 rather than 65. It’s 10 years less stress on your life so it makes perfect sense. I feel like many people are lowering their life expectancy by needlessly working way too long.
Lots of financial planners do this too.
I could see this If the 1.7 million was savings only. If say, the money was invested in a rental property where you are drawing an income and, at the same time, maintaining your capital, you get by with less. You could also work part time.
Great video Adam. Does this into account the possibility of needing more $$ later for things like extra care - or housing (ie: old age home/apartment). The costs on those in ON are near $8-9K/month (this is all in! - lodging, food etc.)?
Yes, absolutely assuming you own a home. If not, adjustments would be made.
Good, realistic presentation. All these doom and gloom articles seem to come out during RRSP season and are authored by some financial institution lol.
Assuming OAS will always exist is dangerous. There's been a tremendous amount of pushback against it recently - or at least calls to make it wealth tested instead of income tested.
This is people who still don't recognise the extent of their sense of entitlement. I live very well on less than $25,000 a year. Nice apartment, nice little Honda FIT, eat healthily, take 1 trip a year. Still able to put aside a couple hundred a year. I'm 75, meds-free, and live a life of gratitude.
And living where? Not in the GTA or GVR.
@@ParallelWealth yes in the GTA. Bathurst and Sheppard.
Considering my wife’s sister has lived of a single minimum wage salary $35k/yr for a family in a small town for a number of years means not everyone needs $70k+ a year to live.
Why do you consider this 'an entitlement'. If people invested in themselves by getting a worthwhile education while in their 20's, should they not be able to enjoy the rewards? My spouse and I have have 5 degrees between us, worked full time while getting degrees in Engineering, Architecture and MBA with no student debt. The degrees weren't handed to us, we worked for them. Our career paths haven't been handed to us, we climbed the ladder. If we want to retire on $250K/yr, why shouldn't we be able to? I can guarantee we'll leave more to charity than most posters here that are judging the 'entitled'. I also suspect we'll pay more in taxes than what some people earn in a lifetime.
It is very nice that you are satisfied with your life. But isn't it sad that we work hard all our life and then have to live on minimal income in retirement? Not being able to afford doing finally something nice? While others, like our politicians have high incomes for a few years and then they can already retire and live a luxury life? I hope God makes that up in eternity! That's why I am ok with it. Just because Jesus told us that the treasures on earth mean nothing. Love to you ❤
You need - low debt - low personal commitments - become mortgage free - drive no car - rental income from your residence / as far as investment income - Banks / telecom / electrical utilities - you will then stand a better chance without living in a cash crunch - (Yes) it still takes a million dollars of investable assets to generate at least $50,000 of dividend income
What return on investments did you use in this example?
Great video as always.
I’m getting more into these videos even though I’m only 44
Never too early!
40s is THE best time to invest in your retirement, I would say if you haven't started its even a little late.
You can use the 72 rule to illustrate this . If you think your investment will generate an average of 3% it would take 24 years to double your money (72/3). that means you would be 68 years old...
Cheers,
a
Wise decision...Time goes fast!!!
Best advice. Find something to do under the table(side hustle) and keep the federal government out of your wallet. They took 48% of my paychecks and when I needed healthcare, it was'nt there.
I averaged 100k a year for 30 years, with my best year close to 200. I was ashamed of myself for making 200. Why? Because I paid 100 in income tax. I bought the RRSP'S and GIC'S, they make things look good, in the end they will get your money and so will the bank(in fee's).
@@louismeloche3857 Actually Louis there are a few flaws in that way of thinking.
I am not going to mention them all but for example CAD pension plan takes the best (I think) 12 years of your life income to determine what your pension will be. If you made 20 years of declared 100k$/yr you get your calculation at 100k/yr, but if you did 20yr undeclared 100k$/yr say 50k declared 50k not declared well you just cut your CAD pension cheques in half.
There are also other benefits in the tax free investments you can make with declared income and other advantages.
I will agree there is a bit of 'wiggle room' between declared and not declared, there are also risks associated with it.
AND THIS IS WHY:
You need someone like Adam at WS.
Cheers.
Your videos are the best. Always.
I appreciate that!
Which begs the question... what's the motivation for BMO making outrageous claims like this?
My honest opinion. If you have a house that is paid off , you only need about half a million above that . Together with OAS & CPP , you can live off the interest on half a million . The budget would be tighter if you're renting , a little more than that would be better .
Depends on where you live and your lifestyle, but your numbers can be very doable.
What about if you own a home, and are still paying a mortgage and upkeep? what a bout owning a car? The majority of us are not going to be able to sock away 750k in RRSP's.
I want this guy managing my money. I have one of the best pensions in Ontario and I’m watching people that have retired from this line of work taking on other jobs cause there’s not enough money in the pension to keep yourself from being broke should something happen like needing to buy a vehicle or bigger maintenance on your house you weren’t expecting.
Pension is $60,000.00 a year. Retirement age is 55.
I’m actually still a bit confused. Are you saying a married couple needs around $750k+$100k or are you saying as a married couple each of you needs $750k+$100k?
(Approx)
Great video, very informative
The calculator you used is excellent, is this software program available for purchase for home use?
No it's not unfortunately.
So, I expect BMO is assuming that BMO will be providing the financial services for your rrif and capital investing. They will charge 0.9% of your gross value every year. That's a minimum. Don't count on OAS or CPP. OAS can be entirely clawed back.
Here’s what I have witnessed from friends/relatives who have and are retired. They don’t know because they don’t talk to someone who’s qualified and can run the retirement calculations. Then understanding what this means together with an update annually. Knowing your own cost of living plus one time purchases over time. It’s not difficult, just seek out the correct knowledgeable professionals to assist you
Great information. It would be nice to do a little backward calculation. From your example, if they have 1.7M, what earliest age can they retire?
Great idea, will work on something like this.
55 no problem
Yes, interested in the same, thank you!
I think the secret sauce is to have $10 more per month than you need in perpetuity. Pensions, dividends, business income, rental income, side hustle. Don't need any particular large chunk of cash just income forever.
I'd love to have a million dollars but I don't and I'm doing fine. My mortgage and car are paid off and I live a modest life style. Old age and Canada pension help a lot.
I have a nice indexed pension that I got at a pretty young age, so I only save for splurging money, for later on...
I'm not rich, but I used my work earnings to DO interesting things, instead of saving money and NOT doing anything.
As a Canadian millennial , I have come to terms that I will never retire. Once I realized that, my whole mentality changed when it came to making money as well as my career path. Now I am doing something that I love and don’t mind doing it for the rest of my life.
You seem to be omitting long term care costs at end of life. This can hit over 100K each annually for a nice private place. What do you recommend here?
For most it's your home. For the rest (small minority) it needs to be built in.
So these numbers are just for the top 1%, right? I easily live on less than $2000/mo. What are Dave and Ruth doing in retirement? Driving Maseratis and Wintering in Monte Carlo?
I’ll be watching for you to produce the video about Canadians that have worked in the USA and subsequently transfer their employer 401k’s to RRSP’s in Canada. I was assessed a 30% withholding and have not found a way to recover that loss. What will be the video name/title? I don’t want to miss that one.
I don't make anywhere close to $90000 a year when working...how many do? And I make $33 an hour.
The reasons most people don't think they will retire between 60-69 are that they are clueless or have a defined benefit pension with a magic number. Most people assume you just work and one day you retire and live a wonderful life without saving or planning.
This is all well and good if you have a home. Housing is out of reach for most people. Tag on another $3500 per month in housing costs to your calculations.
Why would he - by this point in time, most people own their house outright.
I have 3.8mil usd at 41 and I don't think its enough for retirement.. would be more comfortable in the 5-7mil range
Then keep saving away!!
I don’t see how you income tax is so low, unless it doesn’t include prov tax.
We've gone over the numbers, and we cannot afford to retire in Canada.
Can you please share the link for the calculator you showed in the video ?
Retired last week!
Just turned 60.
$5000 a month + $850,000 earning 5% in RRSP + $730 per month of CPP and I am still worried...
This runaway inflation is killing us...
@@simondumoulin2254 You don't have enough to retire before 65.
This number was what do they expect not what they need. Good to clear the fear factor.
So on average they would have had jobs that paid them monthly a lot of money. IF a person invested $1,200.00 per month....for 40 yrs they would have just over 500,000.00 for RRSP. I know that is without any return, but in the reality most Canadians would not even have that much of savings. I served 24 yrs in the CAF (RCN) and saved as much as I can and I am nearing retirement age and only have 200K in RRSP, 75K in Tax Free but I have no where these numbers. Where did I go wrong?
1.7 mill is silly : agreed. -- perhaps, those asked were thinking of retiring age 75 ... or year 2043.
Hi Adam...Question...why are the taxes so low?...I see they are between 9-11% but I believe they would be at least 12% in Ontario...also does CRA move these tax brackets up by the same inflation % as the CPP payments?...otherwise you can quickly get into the 22% tax bracket by the 4th year...thanks for all your valuable advice Adam!
Video coming soon on this.
Perfect...Thank you...as I also believe CRA withholds 30% tax on RRSP/RRIF withdrawals?
@@ParallelWealth ❤
@@tracylawther7384 Yes. They do. Most people should realize a return when they file, but unlike money we “owe” the government at tax time, this return does not come with interest on our money that the government took unnecessarily. ;-)
We are paying for retirement from our paycheck. Technically we shoupdnt require savings to retire. We already paid for that.
The average cananadian income is a little over 61k, and they're probably just struggling to survive. There isn't any chance that most Canadians could earn enough to properly prepare for retirement.
I bet if you did a pole, asking about retirement savings, many would't even have 20k.
If you do not take cpp or Canadian pension- OAS - at - until - 71 years old - what is the benefit - if any??? You collect both oas and cpp at age 71 years old - instead of age 70 - what or could happen - then ?? any answers would be much appreciated - Thank you - Sincerely - WILLIAM AND WILMA GREENWOOD
Both CPP and OAS stop increasing at age 70 (other than increasing with inflation and the YMPE), so if you wait until 71, you've just lost an entire year of income from both for no advantage. There's no benefit to waiting until 71.
The current FU number is US $ 2M due to inflation.
1.7million divided by 25 years is $68,000/year. That's what I see.
I think that is probably what most people will need, especially if you still have a mortgage payment. Where does the 68k come from? Cpp and oas might get you 1500-2000/ month. So a couple may get 48k per year from the government of your lucky.
The question is where does the other 20k per year come from?
If you had saved 500k in rrsp. That should cover the difference.
But that is still a massive number that I would say most don't have.
Growth, CPP and OAS.
People retiring early might also have mortgages going. Maybe that’s why they think they need so much more money to retire. And todays mortgages are so high.
Hi Adam
one thing that wasn't clear for me in the report: Was the $1.7M for an individual or a couple?
couple
In US one needs 4M+ to retire comfortably. 4M = 160K /yr at 4%. aggressive to 120K at 3% conservative. Living below 120k/yr is stressful.
You must live in New York or somewhere very expensive....also, your numbers don't draw down the principal.
@@ParallelWealth correct. If you start using principal, then that changes the game. What is the life expectancy you use for Men?
@lordabhi kingfisher 86. We recently did a video on LE with an actuary. Worth a look of you haven't already.
Based on my current lifestyle and expenses, I can retire on $200k if I also own my own home. However, I'm aiming more for $500k-$600k just to ensure a more conformable retirement and have more breathing room