I just came across this video, and at first I was a bit hesitant to watch it, but I'm glad I did. Two things stand out, the first is that it's a Canadian perspective, which isn't common. The second is that after seeing literally hundreds of these videos, this is the first one where I saw someone actually do real financial scenarios rather than just repeat the same bunch of worn out rules of thumb such as the 4% rule. I'm also really happy to see a spreadsheet that takes so many factors into account such as actual life expectancy, changes of spending, CPP and OAS. Again, most 'gurus' you see on RUclips do nothing more than repeat the same old worn rules of thumb, so this is refreshing.
Wow thanks. This is the best video. I was very discouraged 😞 with my retirement years because I was unable to save or have an equity close to a million dollars.
I am retired on about $125 G's, i have zero debt, house paid and have almost $5000 a month in pension. i don't even need to touch my savings and i am actually still saving. My income exceeds my monthly expenses.
OMG! ADAM! ⁉I am so Relieved you did this topic! I made a long comment to Tina and Norm mentioning your channel and pointing out that in my comment that there were ALOT of moving parts and what you plan to spend in retirement. I was uncomfortable listening to them and not seeing any numbers being crunched. AMEN Adam! Love the analytical number crunching for peace of mind. It is so critical to not mislead people on what they can retire on. Thanks so much for you time on this Adam!⭐ Awesome!💯👍
We find Tina and Norm delightful presenters. We both appreciate your deeper dive into the real numbers. What kind of Long Term Care might be available at 82 for so little? Who knows?
Long term care fees in Canada are based on your ability to pay. Do not be mislead by private companies who charge an arm and a leg, so you can have a piano player in the lobby!
Norm and Tina avoid talking about any real numbers, lest their own financial situation be fully revealed. They were extremely lucky and sold a home in the hyper-inflated GTA area, banked the proceeds, and now are apartment dwellers. Selling any home in that geography would have netted them far more than 300K. Future generations will have a hard time, repeating this once in a lifetime luck.
@@rozinant1237 Yes, it is unfair to the public to not reveal ones own financial situation with numbers and circumstances so viewers can have a better understanding of "reality." I was very concerned by their lack of realizing how misleading this could be to inexperienced people listening. They are a sweet couple but this topic was not in their lane, it was out of there depth, to even think they could suggest that retiring on 325,000 was realistic! I am so glad and appreciative that Adam has created his channel. Adam sets the record straight and gives options that if more people want clarity they can contact his team for their specific situation. Good to receive your comment. Cheers from East Canada.
One thing many people are failing to take into account is the value of their home, which can always be sold to cover expenses when the time comes to move to an assisted living facility or nursing home. Most people can count with at least $500k in the value of their home, which is usually outside whatever RRSP or TFSA funds they may have.
@@debbielockhart7762 A home can be a condo, or a townhouse. If you can’t afford to buy where you live, you may want to consider mover somewhere where housing is cheaper. That’s what I did.
If you own your home it’s easy. Too many people save too much for retirement, you can’t take it with you - If you live a simple life and your housing is covered you don’t really need much.
If you own home expenses probably $1000 month , car $500 to operate, groceries $400, insurances $400 , dental care and medical with out major issues $100, clothing $100 that's $2500 month on the conservative side for basis. $30000 per year . If you are renting in a major city your home expenses would be easy $2000. So you now need $3500 a month , and the income is based on cpp at 70. Well if your single good luck. Now take transit cut down on insurance cost, groceries, and your in the same boat without a house for expenses to be covered later in life, and an uncomfortable living now without convenience. If you have a spouse it's easier but not in the long term.
@@petert3412With no mortgage, our fixed expenses for the house maintenance, utilities, internet, food, insurance is < $1500 in Vancouver! We defer taxes and drive an EV so that saves a fair amount too
@@keepingitreal618on the death bed, a consistent biggest regret is I wish I had done this or that. Once you are in your 70s, your energy drops, it’s too late often. Pay off your home but enjoy much of your money, if you are 80 and the roof goes a reverse mortgage or heloc will easily deal with it out of your equity. Life’s too short to drive Corolla’s, and only vacation locally.
This. This video helped me a lot. I am thankful to see the numbers, to see a realistic timeline, where the numbers come from, and how it's spent. You have made a couple of videos that spoke directly to me (even if you didn't know it) and I really appreciate these realistic/my scenerio videos. Thank you Adam!
NOW ....put retirement money into perspective FOR ALL PUBLIC SECTOR WORKERS. Simply add $50,000+, annually, for every school teacher and every police ....and then work down from there with most EVERY remaining public sector worker getting $25,000 annually, on top of the CPP and OAS. Pretty sweet deal considering public sector workers are always crying .....looking for a "FAIR WAGE" every time their contracts run out......and that's ignoring the investment opportunities they have up to the "retirement" .....which they will exercise the second they are eligible for their full pensions and pension benefits. Why does anyone think taxes all across Canada, at FEDERAL, PROVINCIAL, AND CIVIC, ARE GOING UP??? Start factoring in these TAX INCREASES ...WHICH WILL BE PERMANENT .....and the PENSION INDEXING EVERY PUBLIC SECTOR ALSO GETS ......that hardly anyone else ever gets ......and this $250,000 WILL NOT BE EVEN CLOSE ENOUGH TO SURVIVE ON IN 10 YEARS!!!! SMOKE AND MIRRORS .....THANKS TO THE PUBLIC SECTOR ....WHO OWN 25% OF ALL THE JOBS ACROSS CANADA. .
They aren't realistic, they are 100% theoretical based on assumptions that can be off dramatically in reality. Change the inflation rate, rate of return or tax rate and you will see just how widely the results can vary. Change the pre-tax source of investment return and the results will swing ie. Capital gains vs dividends vs interest and so on.
Wife and I are going to give it a try. Managing your cost is very important. Zero debt, no mortgage and low property taxes is what we set up for ourselves.
Good luck! NOW ....put retirement money into perspective FOR ALL PUBLIC SECTOR WORKERS. Simply add $50,000+, annually, for every school teacher and every police ....and then work down from there with most EVERY remaining public sector worker getting $25,000 annually, on top of the CPP and OAS. Pretty sweet deal considering public sector workers are always crying .....looking for a "FAIR WAGE" every time their contracts run out......and that's ignoring the investment opportunities they have up to the "retirement" .....which they will exercise the second they are eligible for their full pensions and pension benefits. Why does anyone think taxes all across Canada, at FEDERAL, PROVINCIAL, AND CIVIC, ARE GOING UP??? Start factoring in these TAX INCREASES ...WHICH WILL BE PERMANENT .....and the PENSION INDEXING EVERY PUBLIC SECTOR ALSO GETS ......that hardly anyone else ever gets ......and this $250,000 WILL NOT BE EVEN CLOSE ENOUGH TO SURVIVE ON IN 10 YEARS!!!! SMOKE AND MIRRORS .....THANKS TO THE PUBLIC SECTOR ....WHO OWN 25% OF ALL THE JOBS ACROSS CANADA. .
Yes I love Tina and Norm! Yes you can, being single, Owning your home free and clear, having a work pension plus oas and cpp taken at 61 yoa. Its doable!
Having experienced putting my father in a home and having to add $$ to keep him in a decent room, having depleted RRSPs in your 80’s to put you in lower income bracket but still having TFSA money to draw on is gold. Thanks for this.
This was helpful, thanks. I think this is likely useful to more of your potential audience members than scenarios where savings are in the 7 figures and the people have 35+ years in a DB pension plans.
My step-daughter just graduated from uni, in financial management, and is starting into the personal wealth management stream in the NW USA. I sent her this as I think this is real world thinking that can apply to so many people. Thanks for the run down. Also, gives me hope of retirement! LOL
NOW ....put retirement money into perspective FOR ALL PUBLIC SECTOR WORKERS. Simply add $50,000+, annually, for every school teacher and every police ....and then work down from there with most EVERY remaining public sector worker getting $25,000 annually, on top of the CPP and OAS. Pretty sweet deal considering public sector workers are always crying .....looking for a "FAIR WAGE" every time their contracts run out......and that's ignoring the investment opportunities they have up to the "retirement" .....which they will exercise the second they are eligible for their full pensions and pension benefits. Why does anyone think taxes all across Canada, at FEDERAL, PROVINCIAL, AND CIVIC, ARE GOING UP??? Start factoring in these TAX INCREASES ...WHICH WILL BE PERMANENT .....and the PENSION INDEXING EVERY PUBLIC SECTOR ALSO GETS ......that hardly anyone else ever gets ......and this $250,000 WILL NOT BE EVEN CLOSE ENOUGH TO SURVIVE ON IN 10 YEARS!!!! SMOKE AND MIRRORS .....THANKS TO THE PUBLIC SECTOR ....WHO OWN 25% OF ALL THE JOBS ACROSS CANADA. .
I’ve been living off $2000 a month for most of my life. And I have a mortgage! Yes it can easily be done. You might not be jet setting around the world, but you should be able to live off $2000 a month. Even if you have to get rid of your car and take transit, so be it. Lots of seniors do that.
My Dad was ill for the last 3 years of his life, in his late 70's. The costs for medication, in home care and other health related expenses had them spending more in their later years, not less.
Yes he is not taking into account sickness, home care, or a nursing home. He is saying merrily spend and deplete the money you have. Personally I'll holding onto as much as I can because life will be expensive in the latter years and I don't want to spend them in a dive of a nursing home.
@@Misterwhistle Many people don't need to spend too much in heath care in later part of life. Long term care cost is very moderate in Canada, only about $2k a month.
It simply depends on your income versus costs. If your income stream in retirement is greater than your costs, then you are profitable, just like a business. The investments must be sufficient to cover unexpected costs, just like the capital available to a business during low sales. There is no magic number. Obviously, it helps if the number is higher, but if the income stream increases as much as costs, then a break-even scenario happens. Planning for potential cost increases is vital. But you can't possibly cover every single variable in life. We still must accept the risk of retirement or else work until we can't. Of course, a low stress part-time job in retirement helps, but that's just another income stream in the original equation.
Thanks for the content. You mentioned the pension income tax credit, which is the first time I have heard that term. Do you have any videos that explain it?
Yes, from last year. Just search on Pension Income Tax Credit. But he should do one just about it alone, because I still don't fully understand how and when we can or should use it.
Yes their income is sufficient. But they are living in Portugal = cheaper living in general. But I think it's a bit tight when you are living here in Canada. However, you plan is awesome. Thanx
I love the analysis. In the scenarios discussed, inflation and returns are steady, debt is paid off, and there is a moderate income which should cover basic living expenses so long as the clients don’t live too long. However, if sequence of returns is unfavourable in the early years of retirement, the plan might fail. These people need contingency plans. That might include selling their home, reverse mortgage, moving in with family, starting a RUclips channel, working at Walmart, or living in a van down by the river.
A van down by the river! I love your sense of humour and the Chris Farley reference. The van, or tiny house, is not an unattractive plan. Picasso said something about the key to life : living like a peasant with lots of money.
Great video. Of course if you want to be spendy you will need to save more but clearly one can have a perfectly respectable simple retirement under these conditions. I am glad you pointed out delaying cpp and doing a tiered go go / slow go/ and no go phase. (Tina and Norm encourage early cpp and also suggest saving half the dividends of a cdn dividend aristocrat portfolio which is likely way too conservative especially when the numbers are so tight to begin with). The only thing I wonder about is the adjustments one would need to make in the case of a married couple is what should/would happen if one passes away much earlier (from what I understand govt survivor benefits aren’t that great?)
I'm sick of spending money on clothes. I'm sick of going out for expensive dinners with friends. I'm sick of driving a fancy car to impress myself. I'm ready to move to a slow town and live like I don't know anyone.
My two favourite RUclips retirement channels have found each other! Tina and Norm are fabulous and very encouraging, like your channel. One strong point of disagreement would be that they encourage taking CPP early, largely because they believe governments worldwide are cutting losses by denying pensions to seniors until age 67, 68 and one better grab it soon as they can. I like your number analyses that say we should do the opposite. However, what they said in their last video, and you in this one regarding retiring on 250K or 300K, very much mirror my retirement plans. As I said to both you and them: I was long afraid I would end up bedsore-ridden in a cockroach infested common ward since I couldn't save a million dollars like the doom and gloomers say. My other guru, Fred Vetesse, correctly says most retired people can live comfortably on 45%-55% of their primary working years income. One (or two) CAN retire on 250K. I have been retired for eight months, and I can attest it is true.
SS in the US is in a much different state than CPP. When looking at CPP and the real data and stats, everything points to delaying it. If you take it early it more than likely psychological, which is fine - but can be costly.
@@ParallelWealth Oh yes, we are fortunate with our solid CPP. But back in 1995, it appeared that the CPP would indeed be going away, as the fund was down to $17B, compared to about $500B today. The gov't did something right. I agree everything points to delaying CPP at least, and even this knowledgeable couple suggests taking it early. Norm took it at 60 as he was retired at 55, and Tina delayed it until 65. The idea of delaying until 70 likely is kind of anathema to them. You, with the numbers, have the proof that delaying is right.
We have our retirement needs a few $100 less than we were working..We are doing OK..but we've lost a big pile in the market and to inflation..So stories could differ.. Having $250.000 in savings would really worry me..at today's inflation rate and prices
With $50,000 TFSA, use TFSA only to supplement income for 5 years until it’s gone. OAS and GIS combined today is $1,778.81 per month, $21, 345.72 this year, May 2024. TFSA needed is $11, 654. Leave RRSP alone for 5 years, it will total $255,256. The GIS alone is $12,785.64 for this year. Don’t even bother taking $2,000 for the pension income amount (line 31400 of income tax return). This is for this specific case only. Everyone is different. That would reduce your GIS by $996. You don't pay any taxes but with every extra dollar income you lose 49 cents of the GIS. When CPP kicks in at age 70, that RRIF ($255, 256) could supplement income $16, 604 annually until she is 100 years old. $35,332 per year take home money.
@ Parallel Wealth It would help lots if you could to a segment about corporate class account and ROC(Return Of Capital) account. How they work and associate tax issues. Looking forward on that. Much thanks.
Great as always. Do tell, how did you get to an effective tax rate of %5 ? Ontario/Fed tax rate under $46,000 is 20.05%, what is the math behind getting an effective tax rate on her $36K yearly average to approx the 5% figure you are using? Then how is it you are able to drive it down to 2% and 3% in the later years?
A couple things. 1. Personal exemption. So the first @$15k is tax free. So the 20% only applies to amounts above that. 2. Pension income tax credit Remember we live in a graduated tax system, so average and marginal tax rates will always vary unless you have a really large income
It is important to know what your expected expenses are going to be in retirement to get a better understanding of the true after tax spending. If you are going to pay off your mortgage before retirement then that is going to have a huge impact on your overall expenses. That may be a lot less than the initial 33K that is shown in this video. Personally, my partner and I will have our mortgage paid off in just over 3 years and we are 57 and 51. I plan on taking my retirement at 63 and my partner on her 58th birthday as she has a government DB pension that she can take full advantage of when she reaches 58. Also I am going to save 1% to 1.5% of the value of the house each year for repairs or upgrades. The other thing to consider is do you need 2 vehicles in retirement? Generally for the majority of the time you do not and when you do need transport because your partner is somewhere else, it will be much cheaper to get a taxi or uber, or better still walk or cycle if you ae still able to do so. The savings on gas, insurance and maintenance alone will be pretty substantial,
If you need some kicking around cash you get a part time job a day or 2 a week your out with people you can buy things and yes by the early 70s your not travelling is much or even care I always travelled when I was younger and now getting older many places in Mexico you can live on 1500-2000 month go for a couple months maybe get a roommate or just downsize I think it’s doable and i realized I’m not out to keep up with the Jones they are broke lol🇨🇦
I am very blessed I retired at age 50 from Canadian Miltary of 30years of service. My pension is above your second example of couple. I am building a house in Puerto Vallarta Mexico 🇲🇽 to live full time because my soon to be wife is Mexican. My financial portfolio should have just below $250,000 in it after my house is built. My girlfriend said our budget is to high for the house. I agree with her but it's to to be very nice and in one of the top neighborhood in PV. Than I said to her, "your pension from the Mexican Federal government is all most as much as mine" "how much do we REALLY need to live on". However nice to have some funds incase of emergency that is where my financial portfolio will come. She has five years till she retires age age 49 and I will be 55 still young. After I showed her this video I said "we will be in GO GO GO GO GO STAGE when you retire in 5yrs" she chuckle. GREAT VIDEO thank you
Thank you for sharing this topic and like most viewers I also watch Norm and Tina. I couldn’t figure out where they were getting the numbers from. Thank you and I have to find a good financial advisor to help us plan for retirement. Where are your offices in Ontario ?
Thank you for this. However I am disappointed how many of these financial examples on various RUclips channels assume that a person or couple has no mortgage or other debt. What is the national average on that? I know a lot of people over 60 who still have mortgages for many reasons such as the financial impact of divorce, job loss and periods of unemployment and now job loss due to the unusual breakdown of our employment and small businesses for the last few years of restrictions and forced business shutdowns. I would like to see more examples someone in this type of situation with, let’s say, a $250,000 mortgage or perhaps instead of a mortgage, 50,000 in credit card debt (let’s say from helping their adult children through the past few years) and working past 65 is not an option now? Would you do the $250,000 retirement number crunching under those 2 different scenarios?
The income numbers don't change... problem being is your living costs will go up as you have to pay debt. You would have to determine if you could live on the nominal income amounts Adam stated in his presentation. If those amount will not cover expenses you have two options - either generate more income (PT job, higher investment returns or put another way accept more risk, or cut expenses somehow).
More people of retirement age as should downsize their homes and get rid of these mortgages & live more simply as your home is your biggest expense. The smaller your living quarters, all other expenses go down like taxes, repairs, insurances, heatining & cooling costs, maintenence, etc....Sell the house, live more simply, use the house sale money & pay off all that credit card debt & tighten your belts. Keep working. I am 66 and still working, in the process of selling my 2600 sq. ft. home, and getting rid of that burden. I can't wait to find a smaller place to live....If money is no object, keep the house.
Aside from hiccups like new roofs , new HVAC and other large $$ issues like replacing a car I can see this working more so as a couple since most common shared costs are about the same as they would be for a single but anything costly coming down the road is going to toss a wrench in to the plan. BTW Norm and Tina are a very adorable couple.
I would recommend budgeting for these expenditures BEFORE retirement. If your mortgage is paid off before retirement, use the money that would normally go to the mortgage to pay for a roof (even if it isn't worn out) . If your HVAC is as old as the house, maybe think of upgrading earlier. You'll save money on heating/cooling costs as new equipment is more efficient. That efficiency will help offset the costs. Do this while you are still earning money. Or, look at downsizing your home to a condo. Car? Do you need a brand new car when you are retired? I don't think so. Replace the old one with a decent used car. Or lease a new car for lower payments. Most people in their 70s drive less than you think. Unless they are travelling in a motorhome!
Hi Adam, great video, can you explain what “temporary LIF income” is as the Quebec Govt explains it, I am having a hard time understanding it. We have defined contribution plans that are provincially regulated ?
Great video! We are a few years away from retirement and wondering how stopping contributions to CPP at 55-58 and planning to collect at 60 affects your CPP monthly pension? We know that it will be reduced because we are collecting early, but how does the age of retirement affect the amount you will be receiving? Thank you in advance 🙂
I retired the first time at 54. When you pull your CPP estimate the number is significantly higher than it will be in fact. The government doesn't include non contribution years. The general assumption is 8 years drop off, but if you retire early the zero income years will reduce the actual amount. It's not a huge some but I had my numbers pulled by Doug who Adam limes and my actual amount was lower all of $15 / month or 50 cents a day. If I start collecting at 60 I can get $45,000 in CPP payments by age 65. That's a 2 week holidays a year
Hi, great video !!! I'm just wondering how the effective tax rate is always around 4-5%. By looking at the tax tables, the effective tax rate (federal+Ontario) should be around 12% for a taxable income around 33k. Are there tax credits for seniors that I missed? Thanks!
follow up video ...what lifestyle does such a modest income provide? ( If I remember correctly, Norm and Tina are apartment renters, have a trailer in a park for the summer, and love an annual vacation in Portugal..all in all a pretty nice life)
… Hi Adam … for a 70 year old, where would you recommend putting $250,000. if it’s all coming from a divorce settlement and you have no retirement accounts? What type of accounts or investments? I am in the US. Thank you.
Hello Adam, thank you for this pack full video. I am wondering why you are using the RRSP first and not going all in with the TFSA? wouldn't it be better tax wise? also what about GIS? and again thank you
What I'm not clear on is the numbers you use are, as you say at around 5 minute mark, is $33k buy that's not the amount of income she will need to withdraw to have that amount to live on. Isn't that the more relevant calculation related to the longevity of the video title? In other words, she still has to pay tax on the various sources of income which means she will have to withdraw more than $33k a year
Super helpful, thank you! My situation is a bit different being a dual US/Canada citizen, with most of my income in the last 20 years being from an American source. So I won't be getting any CCP, but should be getting something reasonable from Social Security. I'm just hoping it's equivalent.
Excellent video. Thank you. We are 66YO retired educators visiting Poland and Estonia after helping a new school open in Lviv. We are seriously thinking of selling our Portland condo and moving to Europe. Is renting is a better option than owning a home for seniors? We always wanted to own, but now it seems that putting the cash in CDs is wiser than purchasing a home. Plus the healthcare is better here, like in France, than in the US. Your thoughts? Dean & Cindy
I think the idea is you spend less later. I don't know a lot of 80 year olds who are still traveling all over the place. Most spend their time pruning roses and staying at home. Of course there are exceptions, but for the most part they are homebodies.
When you say melt down the RRSP - is that withdrawing it or is that an annuity payment. There is a point in time (age 70)that we cannot withdraw the RRSP anymore - am I correct? That it should be moved into a RIFF. Is the meltdown - the RIFF payment already?
@@ParallelWealth I developed my own version using python for my own personal use but only covers Alberta so not as powerful but good enough. Great video, I think people will realise they can retire on a lot less than they thought.
What if you go by the average life expectancy of 77 years old and single. Pushing finances to their 80s and 100th birthday without any health problems is pushing it. The care facilities will take most of it anyway. So can you live off that? Depends on what care facilities they go to.
I am wondering why OAS is suddenly raised by almost 13% in 2033 ($9866 to $11123). Is this a miscalculation, perhaps? The average yearly raise is about 2.5% up until then, from what I gather from the sheet.
How was the volatility of investments modeled? Can a retiree keep withdrawing what was planned when market returns -11% and then 0% the year after and stay on track?
This is where a plan makes a big difference. Have 1-2 years of income in cash within your accounts. Markets play less to little factor then and allows you to ride out the markets in times like this. The strategy works well cause we have seen it first hand for 16 years with our clients.
There are about 43,000 American men living in the Philippines with many with no savings at all and a $900-1500 SS check. Supporting themselves very well and a Filipina wife/girlfriend. So obviously yes. 9,000 Canadian men doing the same.
Well, when they get even older & need major heart surgery, good luck finding the high quality of care that we have all over the USA. Otherwise, start saving your pennies for airfare home now that you will need down the road.
@@RG-hf4et Good luck finding Healthcare in the US without insurance . You also fail to realize healthcare outcomes in the US are not the best in the World .It is ranked 35th .
@@sarahann530 I will still bet on the USA any day for my healthcare....And why is it that senior Americans don't have healthcare? You can't get any cheaper than Medicare Advantage which barely costs anything!
I watch similar videos and they seem geared for people who aren’t receiving pensions from work. I inherited a sizeable amount of money and will have a good pension along with CPP and OAP. I would like to dip into the money I received to buy a bigger place. I’m 60 years old right now . I wonder what would be safe amount of money to take from my inheritance. I currently own with no mortgage.
Yes income would be lower due to only receiving one CPP payment. Typically people that don't pay into CPP build up assets elsewhere- hopefully this is the case!
Have you done a video on dividends? I can't figure out how they work - do I have to buy a minimum amount of stock from a company to qualify for a dividend? Do some stocks give dividends and not others, and if so how do I find this information out?
NOW ....put retirement money into perspective FOR ALL PUBLIC SECTOR WORKERS. Simply add $50,000+, annually, for every school teacher and every police ....and then work down from there with most EVERY remaining public sector worker getting $25,000 annually, on top of the CPP and OAS. Pretty sweet deal considering public sector workers are always crying .....looking for a "FAIR WAGE" every time their contracts run out......and that's ignoring the investment opportunities they have up to the "retirement" .....which they will exercise the second they are eligible for their full pensions and pension benefits. Why does anyone think taxes all across Canada, at FEDERAL, PROVINCIAL, AND CIVIC, ARE GOING UP??? Start factoring in these TAX INCREASES ...WHICH WILL BE PERMANENT .....and the PENSION INDEXING EVERY PUBLIC SECTOR ALSO GETS ......that hardly anyone else ever gets ......and this $250,000 WILL NOT BE EVEN CLOSE ENOUGH TO SURVIVE ON IN 10 YEARS!!!! SMOKE AND MIRRORS .....THANKS TO THE PUBLIC SECTOR ....WHO OWN 25% OF ALL THE JOBS ACROSS CANADA. .
Would it make sense for the single person in the first scenario to buy an annuity of say, $175 000, and be guaranteed a return for life of, I think, around $12 000/yr. (with inflation protection)? This would leave $50 000 in RRSP to deplete if needed,and then $50 000 in TFSA. Any thoughts on that?
@@kman0074 Thanks for input. I checked some rates as of today (for example BMO), and for a single male, $100 000 with a 10-year guarantee, taken at age 65 the payout on $100 000 is about $7200, so a around $14 000 on $200 000 annuity.
Adam, I love your analysis. Based on your information, went back to review my numbers. It confirmed that I'm on the right track. I can sleep better now. Your information is very down to earth, realistic, and you bring also some examples for better understanding. Please, keep it coming.
So Parrallel Wealth, I get the impression that $250,000 is only adequate for a single person rather than a couple? Is that a fair assessment? So a single person in Canada needs $250,00 to retire one I suppose. And if it's a couple probably double that - $500,000.
Plan it so by the time you retire most savings are in TFSA (assuming you are young enough now that TFSA will have lots of room). Then, delay taking your CPP until age 70 (since that counts as taxable income). You could then collect GIS on top of your OAS from 65-70. You can withdraw some additional funds from TFSA that is not counted as income. Then at 70 your CPP would be a larger amount. I'm going to try some variation of this.
Adam: Thanks for bringing math and realism to making sense of a modest but sustainable retirement. on 250K. This is a goal that many Canadians, even with average incomes in their working lives, can achieve. It's also a great baseline for those of us who, while hardly wealthy, have a DB pension and/or more than 250K in retirement savings. If a 250K retirement is feasible, then a 500K or more retirement looks even better. A question: is that software you use available to self-directed investors, or is it used primarily by financial professionals? I'd love to purchase it for my own planning as a DIY investor and 50-something professional. I watch Tina and Norm also, and appreciate their more narrative approach to living well in retirement.
@@ParallelWealth That's a pity, as the software looked pretty sweet. Perhaps there's something similar available to the average investor from a different source. If you have any recommendations of that kind, please list any financial planning software suitable to financial DIYers and that you think highly of. Indeed, a review or even just an introduction to a few good portfolio analysis and/or financial and retirement planning software options would make for a great PW video.
@@davidblack6413 I do not see anywhere on their website that restricts sales to advisors. In any case you can build something similar if you have decent spread sheet skills
I just came across this video, and at first I was a bit hesitant to watch it, but I'm glad I did. Two things stand out, the first is that it's a Canadian perspective, which isn't common. The second is that after seeing literally hundreds of these videos, this is the first one where I saw someone actually do real financial scenarios rather than just repeat the same bunch of worn out rules of thumb such as the 4% rule.
I'm also really happy to see a spreadsheet that takes so many factors into account such as actual life expectancy, changes of spending, CPP and OAS. Again, most 'gurus' you see on RUclips do nothing more than repeat the same old worn rules of thumb, so this is refreshing.
Thanks Cold Runner!
Wow thanks. This is the best video. I was very discouraged 😞 with my retirement years because I was unable to save or have an equity close to a million dollars.
I am retired on about $125 G's, i have zero debt, house paid and have almost $5000 a month in pension. i don't even need to touch my savings and i am actually still saving. My income exceeds my monthly expenses.
I live in my van and travel to warm climes and my retirement is great!
Thank you for showing a single persons perspective. This is a very good video, thank you.
Nice to see realistic numbers. Not everyone has a million dollars to retire on.
OMG! ADAM! ⁉I am so Relieved you did this topic! I made a long comment to Tina and Norm mentioning your channel and pointing out that in my comment that there were ALOT of moving parts and what you plan to spend in retirement. I was uncomfortable listening to them and not seeing any numbers being crunched. AMEN Adam! Love the analytical number crunching for peace of mind. It is so critical to not mislead people on what they can retire on. Thanks so much for you time on this Adam!⭐ Awesome!💯👍
We find Tina and Norm delightful presenters. We both appreciate your deeper dive into the real numbers. What kind of Long Term Care might be available at 82 for so little? Who knows?
Long term care fees in Canada are based on your ability to pay. Do not be mislead by private companies who charge an arm and a leg, so you can have a piano player in the lobby!
Norm and Tina avoid talking about any real numbers, lest their own financial situation be fully revealed. They were extremely lucky and sold a home in the hyper-inflated GTA area, banked the proceeds, and now are apartment dwellers. Selling any home in that geography would have netted them far more than 300K. Future generations will have a hard time, repeating this once in a lifetime luck.
@@rozinant1237 Yes, it is unfair to the public to not reveal ones own financial situation with numbers and circumstances so viewers can have a better understanding of "reality." I was very concerned by their lack of realizing how misleading this could be to inexperienced people listening. They are a sweet couple but this topic was not in their lane, it was out of there depth, to even think they could suggest that retiring on 325,000 was realistic! I am so glad and appreciative that Adam has created his channel. Adam sets the record straight and gives options that if more people want clarity they can contact his team for their specific situation. Good to receive your comment. Cheers from East Canada.
@@rozinant1237 Exactly! 💯
Zero debt is important. No mtg., no car payments, no visa balances.
👊
One thing many people are failing to take into account is the value of their home, which can always be sold to cover expenses when the time comes to move to an assisted living facility or nursing home. Most people can count with at least $500k in the value of their home, which is usually outside whatever RRSP or TFSA funds they may have.
Who can afford to buy a home these days? Average price where I live is over a million - and that is for a shithole.
@@debbielockhart7762 A home can be a condo, or a townhouse. If you can’t afford to buy where you live, you may want to consider mover somewhere where housing is cheaper. That’s what I did.
If you own your home it’s easy. Too many people save too much for retirement, you can’t take it with you - If you live a simple life and your housing is covered you don’t really need much.
If you own home expenses probably $1000 month , car $500 to operate, groceries $400, insurances $400 , dental care and medical with out major issues $100, clothing $100 that's $2500 month on the conservative side for basis. $30000 per year . If you are renting in a major city your home expenses would be easy $2000. So you now need $3500 a month , and the income is based on cpp at 70. Well if your single good luck. Now take transit cut down on insurance cost, groceries, and your in the same boat without a house for expenses to be covered later in life, and an uncomfortable living now without convenience. If you have a spouse it's easier but not in the long term.
@@petert3412With no mortgage, our fixed expenses for the house maintenance, utilities, internet, food, insurance is < $1500 in Vancouver! We defer taxes and drive an EV so that saves a fair amount too
If you own your own home in Ontario, chances are you have assets that far exceed $250k
$30000 roof replacement you hadn't planned for yeh right 😂😂😂😂
@@keepingitreal618on the death bed, a consistent biggest regret is I wish I had done this or that. Once you are in your 70s, your energy drops, it’s too late often. Pay off your home but enjoy much of your money, if you are 80 and the roof goes a reverse mortgage or heloc will easily deal with it out of your equity. Life’s too short to drive Corolla’s, and only vacation locally.
This. This video helped me a lot. I am thankful to see the numbers, to see a realistic timeline, where the numbers come from, and how it's spent. You have made a couple of videos that spoke directly to me (even if you didn't know it) and I really appreciate these realistic/my scenerio videos. Thank you Adam!
NOW ....put retirement money into perspective FOR ALL PUBLIC SECTOR WORKERS. Simply add $50,000+, annually, for every school teacher and every police ....and then work down from there with most EVERY remaining public sector worker getting $25,000 annually, on top of the CPP and OAS.
Pretty sweet deal considering public sector workers are always crying .....looking for a "FAIR WAGE" every time their contracts run out......and that's ignoring the investment opportunities they have up to the "retirement" .....which they will exercise the second they are eligible for their full pensions and pension benefits.
Why does anyone think taxes all across Canada, at FEDERAL, PROVINCIAL, AND CIVIC, ARE GOING UP??? Start factoring in these TAX INCREASES ...WHICH WILL BE PERMANENT .....and the PENSION INDEXING EVERY PUBLIC SECTOR ALSO GETS ......that hardly anyone else ever gets ......and this $250,000 WILL NOT BE EVEN CLOSE ENOUGH TO SURVIVE ON IN 10 YEARS!!!!
SMOKE AND MIRRORS .....THANKS TO THE PUBLIC SECTOR ....WHO OWN 25% OF ALL THE JOBS ACROSS CANADA.
.
They aren't realistic, they are 100% theoretical based on assumptions that can be off dramatically in reality. Change the inflation rate, rate of return or tax rate and you will see just how widely the results can vary. Change the pre-tax source of investment return and the results will swing ie. Capital gains vs dividends vs interest and so on.
Thanks for the shout out Adam have a wonderful weekend Cheers Norm and Tina 🌺
Thanks! Same to you both. Looking forward to your video tomorrow!
Wife and I are going to give it a try. Managing your cost is very important. Zero debt, no mortgage and low property taxes is what we set up for ourselves.
Good luck!
NOW ....put retirement money into perspective FOR ALL PUBLIC SECTOR WORKERS. Simply add $50,000+, annually, for every school teacher and every police ....and then work down from there with most EVERY remaining public sector worker getting $25,000 annually, on top of the CPP and OAS.
Pretty sweet deal considering public sector workers are always crying .....looking for a "FAIR WAGE" every time their contracts run out......and that's ignoring the investment opportunities they have up to the "retirement" .....which they will exercise the second they are eligible for their full pensions and pension benefits.
Why does anyone think taxes all across Canada, at FEDERAL, PROVINCIAL, AND CIVIC, ARE GOING UP??? Start factoring in these TAX INCREASES ...WHICH WILL BE PERMANENT .....and the PENSION INDEXING EVERY PUBLIC SECTOR ALSO GETS ......that hardly anyone else ever gets ......and this $250,000 WILL NOT BE EVEN CLOSE ENOUGH TO SURVIVE ON IN 10 YEARS!!!!
SMOKE AND MIRRORS .....THANKS TO THE PUBLIC SECTOR ....WHO OWN 25% OF ALL THE JOBS ACROSS CANADA.
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And don't forget to DOWNSIZE your living space. All of your other bills decrease - home insurance, heating, cooling, maintenence, etc.
@@taxicamel So, Taxicamel, get a job in the PUBLIC SECTOR, then "you'll have it made" also!
Thanks so much for sharing this especially with some lower numbers! Awesome video. Great information!! 💕
Yes I love Tina and Norm! Yes you can, being single,
Owning your home free and clear, having a work pension plus oas and cpp taken at 61 yoa. Its doable!
Having experienced putting my father in a home and having to add $$ to keep him in a decent room, having depleted RRSPs in your 80’s to put you in lower income bracket but still having TFSA money to draw on is gold. Thanks for this.
I love Tina and Norm, they have been really helpful for me.
Excellent topical information as always.
This was helpful, thanks. I think this is likely useful to more of your potential audience members than scenarios where savings are in the 7 figures and the people have 35+ years in a DB pension plans.
Definitely a big range of viewers here. We try to connect with everyone!
One of your best!!
Thanks Ghanesh!
Its really nice to hear a different perspective backed by number, Thanks Adam! I watch Tina and Norm too.
Thank you Adam. These more realistic numbers really help.
Happy to help!
My step-daughter just graduated from uni, in financial management, and is starting into the personal wealth management stream in the NW USA. I sent her this as I think this is real world thinking that can apply to so many people. Thanks for the run down. Also, gives me hope of retirement! LOL
Great video, Adam! Thank you. Really appreciate this. Keep them coming!
Thanks Karen. Have a good weekend.
Adam, love the channel. Thank you for all the work behind the scenes...the efforts we don't see. Awesome!
NOW ....put retirement money into perspective FOR ALL PUBLIC SECTOR WORKERS. Simply add $50,000+, annually, for every school teacher and every police ....and then work down from there with most EVERY remaining public sector worker getting $25,000 annually, on top of the CPP and OAS.
Pretty sweet deal considering public sector workers are always crying .....looking for a "FAIR WAGE" every time their contracts run out......and that's ignoring the investment opportunities they have up to the "retirement" .....which they will exercise the second they are eligible for their full pensions and pension benefits.
Why does anyone think taxes all across Canada, at FEDERAL, PROVINCIAL, AND CIVIC, ARE GOING UP??? Start factoring in these TAX INCREASES ...WHICH WILL BE PERMANENT .....and the PENSION INDEXING EVERY PUBLIC SECTOR ALSO GETS ......that hardly anyone else ever gets ......and this $250,000 WILL NOT BE EVEN CLOSE ENOUGH TO SURVIVE ON IN 10 YEARS!!!!
SMOKE AND MIRRORS .....THANKS TO THE PUBLIC SECTOR ....WHO OWN 25% OF ALL THE JOBS ACROSS CANADA.
.
Great job! Very informative. Thanks!
Thanks for watching!
I’ve been living off $2000 a month for most of my life. And I have a mortgage! Yes it can easily be done. You might not be jet setting around the world, but you should be able to live off $2000 a month. Even if you have to get rid of your car and take transit, so be it. Lots of seniors do that.
I love norm and Tina!!!
My Dad was ill for the last 3 years of his life, in his late 70's. The costs for medication, in home care and other health related expenses had them spending more in their later years, not less.
Yes he is not taking into account sickness, home care, or a nursing home. He is saying merrily spend and deplete the money you have. Personally I'll holding onto as much as I can because life will be expensive in the latter years and I don't want to spend them in a dive of a nursing home.
@@Misterwhistle Many people don't need to spend too much in heath care in later part of life. Long term care cost is very moderate in Canada, only about $2k a month.
@@dantse2012able it all depends on the quality of life you are willing not to have when spending only $2k per month.
It simply depends on your income versus costs. If your income stream in retirement is greater than your costs, then you are profitable, just like a business. The investments must be sufficient to cover unexpected costs, just like the capital available to a business during low sales. There is no magic number. Obviously, it helps if the number is higher, but if the income stream increases as much as costs, then a break-even scenario happens. Planning for potential cost increases is vital. But you can't possibly cover every single variable in life. We still must accept the risk of retirement or else work until we can't. Of course, a low stress part-time job in retirement helps, but that's just another income stream in the original equation.
Thank-You!!!
Great info and insight.
Thanks for the content. You mentioned the pension income tax credit, which is the first time I have heard that term. Do you have any videos that explain it?
Yes, from last year. Just search on Pension Income Tax Credit. But he should do one just about it alone, because I still don't fully understand how and when we can or should use it.
Will add to our list. Yes it's mentioned in a few different videos, but will carve one out specifically for this credit
Adam, very informative vedio. Thank you.
Great video thanks... we watch Tina an Norm also
Incredible stuff! I love the examples and the breakdowns!
Thanks!
Yes their income is sufficient. But they are living in Portugal = cheaper living in general. But I think it's a bit tight when you are living here in Canada. However, you plan is awesome. Thanx
@Karen Dunn 👍
They don't live in Portugal. They've vacationed there a few times.
I love the analysis. In the scenarios discussed, inflation and returns are steady, debt is paid off, and there is a moderate income which should cover basic living expenses so long as the clients don’t live too long. However, if sequence of returns is unfavourable in the early years of retirement, the plan might fail. These people need contingency plans. That might include selling their home, reverse mortgage, moving in with family, starting a RUclips channel, working at Walmart, or living in a van down by the river.
A van down by the river! I love your sense of humour and the Chris Farley reference. The van, or tiny house, is not an unattractive plan. Picasso said something about the key to life : living like a peasant with lots of money.
Starting a RUclips channel,lol.
Never get into a reverse mortgage! Sell the house if you must, IMHO!
Great analysis with numbers 😉
Great video. Of course if you want to be spendy you will need to save more but clearly one can have a perfectly respectable simple retirement under these conditions. I am glad you pointed out delaying cpp and doing a tiered go go / slow go/ and no go phase. (Tina and Norm encourage early cpp and also suggest saving half the dividends of a cdn dividend aristocrat portfolio which is likely way too conservative especially when the numbers are so tight to begin with).
The only thing I wonder about is the adjustments one would need to make in the case of a married couple is what should/would happen if one passes away much earlier (from what I understand govt survivor benefits aren’t that great?)
I'm sick of spending money on clothes. I'm sick of going out for expensive dinners with friends. I'm sick of driving a fancy car to impress myself. I'm ready to move to a slow town and live like I don't know anyone.
Like most people you are the source of your own problems.
Norm and Tina’s channel is great, as is yours!
My two favourite RUclips retirement channels have found each other! Tina and Norm are fabulous and very encouraging, like your channel. One strong point of disagreement would be that they encourage taking CPP early, largely because they believe governments worldwide are cutting losses by denying pensions to seniors until age 67, 68 and one better grab it soon as they can. I like your number analyses that say we should do the opposite. However, what they said in their last video, and you in this one regarding retiring on 250K or 300K, very much mirror my retirement plans. As I said to both you and them: I was long afraid I would end up bedsore-ridden in a cockroach infested common ward since I couldn't save a million dollars like the doom and gloomers say. My other guru, Fred Vetesse, correctly says most retired people can live comfortably on 45%-55% of their primary working years income. One (or two) CAN retire on 250K. I have been retired for eight months, and I can attest it is true.
SS in the US is in a much different state than CPP. When looking at CPP and the real data and stats, everything points to delaying it. If you take it early it more than likely psychological, which is fine - but can be costly.
@@ParallelWealth Oh yes, we are fortunate with our solid CPP. But back in 1995, it appeared that the CPP would indeed be going away, as the fund was down to $17B, compared to about $500B today. The gov't did something right. I agree everything points to delaying CPP at least, and even this knowledgeable couple suggests taking it early. Norm took it at 60 as he was retired at 55, and Tina delayed it until 65. The idea of delaying until 70 likely is kind of anathema to them. You, with the numbers, have the proof that delaying is right.
We have our retirement needs a few $100 less than we were working..We are doing OK..but we've lost a big pile in the market and to inflation..So stories could differ.. Having $250.000 in savings would really worry me..at today's inflation rate and prices
@@kimh I believe they both retired at the same time. Norm was 60 and Tina was 58.
Excellent advice - as always!
Thanks Sharon
Great video. thanks for the information.
Thanks Tony.
Great video Adam - from Adam in Alberta
With $50,000 TFSA, use TFSA only to supplement income for 5 years until it’s gone. OAS and GIS combined today is $1,778.81 per month, $21, 345.72 this year, May 2024. TFSA needed is $11, 654. Leave RRSP alone for 5 years, it will total $255,256. The GIS alone is $12,785.64 for this year.
Don’t even bother taking $2,000 for the pension income amount (line 31400 of income tax return). This is for this specific case only. Everyone is different. That would reduce your GIS by $996. You don't pay any taxes but with every extra dollar income you lose 49 cents of the GIS.
When CPP kicks in at age 70, that RRIF ($255, 256) could supplement income $16, 604 annually until she is 100 years old. $35,332 per year take home money.
@ Parallel Wealth
It would help lots if you could to a segment about corporate class account and ROC(Return Of Capital) account.
How they work and associate tax issues.
Looking forward on that. Much thanks.
Dropping taxable income and living off TFSA at 82... another epiphany moment!!
🤯
Whew lol. Love the examples and certainly let's me breathe a little easier.
Great as always. Do tell, how did you get to an effective tax rate of %5 ? Ontario/Fed tax rate under $46,000 is 20.05%, what is the math behind getting an effective tax rate on her $36K yearly average to approx the 5% figure you are using? Then how is it you are able to drive it down to 2% and 3% in the later years?
A couple things.
1. Personal exemption. So the first @$15k is tax free. So the 20% only applies to amounts above that.
2. Pension income tax credit
Remember we live in a graduated tax system, so average and marginal tax rates will always vary unless you have a really large income
@@ParallelWealth well done Adam!!
Well that tells us our income but very hard to live on that in any city in Canada
It is important to know what your expected expenses are going to be in retirement to get a better understanding of the true after tax spending. If you are going to pay off your mortgage before retirement then that is going to have a huge impact on your overall expenses. That may be a lot less than the initial 33K that is shown in this video. Personally, my partner and I will have our mortgage paid off in just over 3 years and we are 57 and 51. I plan on taking my retirement at 63 and my partner on her 58th birthday as she has a government DB pension that she can take full advantage of when she reaches 58.
Also I am going to save 1% to 1.5% of the value of the house each year for repairs or upgrades. The other thing to consider is do you need 2 vehicles in retirement? Generally for the majority of the time you do not and when you do need transport because your partner is somewhere else, it will be much cheaper to get a taxi or uber, or better still walk or cycle if you ae still able to do so. The savings on gas, insurance and maintenance alone will be pretty substantial,
If you need some kicking around cash you get a part time job a day or 2 a week your out with people you can buy things and yes by the early 70s your not travelling is much or even care I always travelled when I was younger and now getting older many places in Mexico you can live on 1500-2000 month go for a couple months maybe get a roommate or just downsize I think it’s doable and i realized I’m not out to keep up with the Jones they are broke lol🇨🇦
I am very blessed I retired at age 50 from Canadian Miltary of 30years of service. My pension is above your second example of couple. I am building a house in Puerto Vallarta Mexico 🇲🇽 to live full time because my soon to be wife is Mexican. My financial portfolio should have just below $250,000 in it after my house is built. My girlfriend said our budget is to high for the house. I agree with her but it's to to be very nice and in one of the top neighborhood in PV. Than I said to her, "your pension from the Mexican Federal government is all most as much as mine" "how much do we REALLY need to live on". However nice to have some funds incase of emergency that is where my financial portfolio will come. She has five years till she retires age age 49 and I will be 55 still young. After I showed her this video I said "we will be in GO GO GO GO GO STAGE when you retire in 5yrs" she chuckle.
GREAT VIDEO thank you
So, the reward for being a responsible earner/ saver is to subsidize others' care home expense?
Brilliant!!
Thank you for sharing this topic and like most viewers I also watch Norm and Tina. I couldn’t figure out where they were getting the numbers from. Thank you and I have to find a good financial advisor to help us plan for retirement. Where are your offices in Ontario ?
We work remotely and help Canadians across the Country. We have boots on the ground in BC and Ontario.
@@ParallelWealth Hi Adam, how much do you charge for a couple to do up their retirement portfolio?
Thank you for this. However I am disappointed how many of these financial examples on various RUclips channels assume that a person or couple has no mortgage or other debt. What is the national average on that? I know a lot of people over 60 who still have mortgages for many reasons such as the financial impact of divorce, job loss and periods of unemployment and now job loss due to the unusual breakdown of our employment and small businesses for the last few years of restrictions and forced business shutdowns. I would like to see more examples someone in this type of situation with, let’s say, a $250,000 mortgage or perhaps instead of a mortgage, 50,000 in credit card debt (let’s say from helping their adult children through the past few years) and working past 65 is not an option now? Would you do the $250,000 retirement number crunching under those 2 different scenarios?
The income numbers don't change... problem being is your living costs will go up as you have to pay debt. You would have to determine if you could live on the nominal income amounts Adam stated in his presentation. If those amount will not cover expenses you have two options - either generate more income (PT job, higher investment returns or put another way accept more risk, or cut expenses somehow).
More people of retirement age as should downsize their homes and get rid of these mortgages & live more simply as your home is your biggest expense. The smaller your living quarters, all other expenses go down like taxes, repairs, insurances, heatining & cooling costs, maintenence, etc....Sell the house, live more simply, use the house sale money & pay off all that credit card debt & tighten your belts. Keep working. I am 66 and still working, in the process of selling my 2600 sq. ft. home, and getting rid of that burden. I can't wait to find a smaller place to live....If money is no object, keep the house.
Aside from hiccups like new roofs , new HVAC and other large $$ issues like replacing a car I can see this working more so as a couple since most common shared costs are about the same as they would be for a single but anything costly coming down the road is going to toss a wrench in to the plan. BTW Norm and Tina are a very adorable couple.
Mark, they sure are. Love to see the growth of their channel - very well deserved.
I would recommend budgeting for these expenditures BEFORE retirement. If your mortgage is paid off before retirement, use the money that would normally go to the mortgage to pay for a roof (even if it isn't worn out) . If your HVAC is as old as the house, maybe think of upgrading earlier. You'll save money on heating/cooling costs as new equipment is more efficient. That efficiency will help offset the costs. Do this while you are still earning money. Or, look at downsizing your home to a condo.
Car? Do you need a brand new car when you are retired? I don't think so. Replace the old one with a decent used car. Or lease a new car for lower payments. Most people in their 70s drive less than you think. Unless they are travelling in a motorhome!
Hi Adam, great video, can you explain what “temporary LIF income” is as the Quebec Govt explains it, I am having a hard time understanding it. We have defined contribution plans that are provincially regulated ?
Great video!
We are a few years away from retirement and wondering how stopping contributions to CPP at 55-58 and planning to collect at 60 affects your CPP monthly pension?
We know that it will be reduced because we are collecting early, but how does the age of retirement affect the amount you will be receiving?
Thank you in advance 🙂
I retired the first time at 54. When you pull your CPP estimate the number is significantly higher than it will be in fact. The government doesn't include non contribution years. The general assumption is 8 years drop off, but if you retire early the zero income years will reduce the actual amount. It's not a huge some but I had my numbers pulled by Doug who Adam limes and my actual amount was lower all of $15 / month or 50 cents a day.
If I start collecting at 60 I can get $45,000 in CPP payments by age 65. That's a 2 week holidays a year
Hi, great video !!!
I'm just wondering how the effective tax rate is always around 4-5%.
By looking at the tax tables, the effective tax rate (federal+Ontario) should be around 12% for a taxable income around 33k.
Are there tax credits for seniors that I missed? Thanks!
Yes, correct. Credits get it much lower.
follow up video ...what lifestyle does such a modest income provide? ( If I remember correctly, Norm and Tina are apartment renters, have a trailer in a park for the summer, and love an annual vacation in Portugal..all in all a pretty nice life)
… Hi Adam … for a 70 year old, where would you recommend putting $250,000. if it’s all coming from a divorce settlement and you have no retirement accounts? What type of accounts or investments? I am in the US. Thank you.
Hello Adam, thank you for this pack full video. I am wondering why you are using the RRSP first and not going all in with the TFSA? wouldn't it be better tax wise? also what about GIS? and again thank you
If you did that you create a tax Rollercoaster. It will leave you paying more tax and less in your pocket. You want to level out your income tax.
When you say “can you retire with $250,000 “? Is this for husband and wife combined or $250,00 each?
Either or - will depend on your cashflow needs. But we have seen couples retire on this amount and be able to enjoy retirement.
What I'm not clear on is the numbers you use are, as you say at around 5 minute mark, is $33k buy that's not the amount of income she will need to withdraw to have that amount to live on.
Isn't that the more relevant calculation related to the longevity of the video title?
In other words, she still has to pay tax on the various sources of income which means she will have to withdraw more than $33k a year
We have her drawing more than $33k, look at the taxable income column. The $33k in Net, but the gross amount is calculated in the software.
Awesome video. Very good program. Can I purchase the retirement planning software?
Robert, unfortunately not - they only sell to registered advisors.
@@ParallelWealth I guess that makes sense.
i have rental properties that generate 5k/mo NET. my total investment 20+ yrs ago was less than 50k.
Is this advisable given the high rates of inflation that we are currently experiencing?
Super helpful, thank you! My situation is a bit different being a dual US/Canada citizen, with most of my income in the last 20 years being from an American source. So I won't be getting any CCP, but should be getting something reasonable from Social Security. I'm just hoping it's equivalent.
I will say the SS system is not in as good of a financial position as CPP, but hopefully will be there for you.
😀 the USA pays more.🤔
Excellent video. Thank you. We are 66YO retired educators visiting Poland and Estonia after helping a new school open in Lviv. We are seriously thinking of selling our Portland condo and moving to Europe. Is renting is a better option than owning a home for seniors? We always wanted to own, but now it seems that putting the cash in CDs is wiser than purchasing a home. Plus the healthcare is better here, like in France, than in the US. Your thoughts? Dean & Cindy
Can u talk about 71 Yeats, and what to do with rrsp, tsfa, when rrsp consists from various tsx stocks??? And there are some dividends??
Why would you take out less later? Wouldn't inflation cause the numbers to increase?
The numbers are inflation adjusted. We are tlaking real dollars, not nominal
I think the idea is you spend less later. I don't know a lot of 80 year olds who are still traveling all over the place. Most spend their time pruning roses and staying at home. Of course there are exceptions, but for the most part they are homebodies.
When you say melt down the RRSP - is that withdrawing it or is that an annuity payment. There is a point in time (age 70)that we cannot withdraw the RRSP anymore - am I correct? That it should be moved into a RIFF. Is the meltdown - the RIFF payment already?
is that software available to the public or financial planners only? Can you share details?
No public use unfortunately. It's called Snap Projections.
@@ParallelWealth I developed my own version using python for my own personal use but only covers Alberta so not as powerful but good enough. Great video, I think people will realise they can retire on a lot less than they thought.
What if you go by the average life expectancy of 77 years old and single. Pushing finances to their 80s and 100th birthday without any health problems is pushing it. The care facilities will take most of it anyway. So can you live off that? Depends on what care facilities they go to.
I am wondering why OAS is suddenly raised by almost 13% in 2033 ($9866 to $11123). Is this a miscalculation, perhaps? The average yearly raise is about 2.5% up until then, from what I gather from the sheet.
The new 10% increase at age 75!
@@ParallelWealth Thanks for the clarification
How was the volatility of investments modeled? Can a retiree keep withdrawing what was planned when market returns -11% and then 0% the year after and stay on track?
This is where a plan makes a big difference. Have 1-2 years of income in cash within your accounts. Markets play less to little factor then and allows you to ride out the markets in times like this. The strategy works well cause we have seen it first hand for 16 years with our clients.
Is the financial model you use available to anyone or proprietary to your firm?
What about GIS MONEY? Would they qualify for it?
There are about 43,000 American men living in the Philippines with many with no savings at all and a $900-1500 SS check. Supporting themselves very well and a Filipina wife/girlfriend. So obviously yes. 9,000 Canadian men doing the same.
Very common indeed. Lots sharing their stories on YT as well....maybe trying to make an extra $$
Well, when they get even older & need major heart surgery, good luck finding the high quality of care that we have all over the USA. Otherwise, start saving your pennies for airfare home now that you will need down the road.
@@RG-hf4et Good luck finding Healthcare in the US without insurance . You also fail to realize healthcare outcomes in the US are not the best in the World .It is ranked 35th .
@@sarahann530 I will still bet on the USA any day for my healthcare....And why is it that senior Americans don't have healthcare? You can't get any cheaper than Medicare Advantage which barely costs anything!
@@RG-hf4et It shouldn't cost much ,people have being paying into it their whole lives. It's socialized medicine .
Love these videos. I'm only 35 but I'm planning right meow
I watch similar videos and they seem geared for people who aren’t receiving pensions from work. I inherited a sizeable amount of money and will have a good pension along with CPP and OAP. I would like to dip into the money I received to buy a bigger place. I’m 60 years old right now . I wonder what would be safe amount of money to take from my inheritance. I currently own with no mortgage.
Great video btw. Question : if my partner didn’t contribute to cpp will that effect your couple set of numbers you talk about?
Yes income would be lower due to only receiving one CPP payment.
Typically people that don't pay into CPP build up assets elsewhere- hopefully this is the case!
@@ParallelWealth what about a home maker that never worked then it would be cpp for 1 person and both get OAS?
Have you done a video on dividends? I can't figure out how they work - do I have to buy a minimum amount of stock from a company to qualify for a dividend? Do some stocks give dividends and not others, and if so how do I find this information out?
I haven't, but can add to the list. I'm sure there are some good ones on YT if you search
Are there advantages to going rrif rather then just withdrawing money from one's rrsp? Also is there a age that this becomes advantageous?
NOW ....put retirement money into perspective FOR ALL PUBLIC SECTOR WORKERS. Simply add $50,000+, annually, for every school teacher and every police ....and then work down from there with most EVERY remaining public sector worker getting $25,000 annually, on top of the CPP and OAS.
Pretty sweet deal considering public sector workers are always crying .....looking for a "FAIR WAGE" every time their contracts run out......and that's ignoring the investment opportunities they have up to the "retirement" .....which they will exercise the second they are eligible for their full pensions and pension benefits.
Why does anyone think taxes all across Canada, at FEDERAL, PROVINCIAL, AND CIVIC, ARE GOING UP??? Start factoring in these TAX INCREASES ...WHICH WILL BE PERMANENT .....and the PENSION INDEXING EVERY PUBLIC SECTOR ALSO GETS ......that hardly anyone else ever gets ......and this $250,000 WILL NOT BE EVEN CLOSE ENOUGH TO SURVIVE ON IN 10 YEARS!!!!
SMOKE AND MIRRORS .....THANKS TO THE PUBLIC SECTOR ....WHO OWN 25% OF ALL THE JOBS ACROSS CANADA.
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"public sector workers are always crying"
That is your made-up BS view of people asking for a raise.
Adam I need to ask you my situation and some clarity
Would it make sense for the single person in the first scenario to buy an annuity of say, $175 000, and be guaranteed a return for life of, I think, around $12 000/yr. (with inflation protection)? This would leave $50 000 in RRSP to deplete if needed,and then $50 000 in TFSA. Any thoughts on that?
Good luck getting that product. It’s more like $5,000/yr for guarantee annuity. Your number is more like historical s and p index funds at full risk
@@kman0074 Thanks for input. I checked some rates as of today (for example BMO), and for a single male, $100 000 with a 10-year guarantee, taken at age 65 the payout on $100 000 is about $7200, so a around $14 000 on $200 000 annuity.
Adam, I love your analysis. Based on your information, went back to review my numbers. It confirmed that I'm on the right track. I can sleep better now. Your information is very down to earth, realistic, and you bring also some examples for better understanding. Please, keep it coming.
Thanks! Glad our videos are helping!
How do I access this software?
Become a Financial Planner!
Hi Adam. Di you have any advice for Canadians who inherited a 401K account, specifically how to minimize taxes payable on withdrawals. Cheers!
No direct video. But integrate into our plans that we do
I wish I could give you more thumbs up than only one.
Haha thanks Jason. You should suggest that to RUclips!
So Parrallel Wealth, I get the impression that $250,000 is only adequate for a single person rather than a couple? Is that a fair assessment? So a single person in Canada needs $250,00 to retire one I suppose. And if it's a couple probably double that - $500,000.
May I assume these are Canadian dollars?
Yes you can definitely assume! 😉
No. Well, in the Philippines maybe.
I have seen many people live on this (and less) in Canada. It's possible, but as I mentioned in the video, comes down to lifestyle and burn rate
@@ParallelWealth Wouldn't that generate like $12k/yr? $1K/mo isn't a lot to live on in a 1st world economy, even assuming no debt.
If you live like the locals even in Asia.. No offense.!! One room in Vancouver is renting for $800 a month.
How can I get your software?
Become a financial planner. They only sell the licensed planners.
What about GIS?
Wouldn't qualify at this income level
Plan it so by the time you retire most savings are in TFSA (assuming you are young enough now that TFSA will have lots of room). Then, delay taking your CPP until age 70 (since that counts as taxable income). You could then collect GIS on top of your OAS from 65-70. You can withdraw some additional funds from TFSA that is not counted as income. Then at 70 your CPP would be a larger amount. I'm going to try some variation of this.
Not US dollars?
Adam: Thanks for bringing math and realism to making sense of a modest but sustainable retirement. on 250K. This is a goal that many Canadians, even with average incomes in their working lives, can achieve. It's also a great baseline for those of us who, while hardly wealthy, have a DB pension and/or more than 250K in retirement savings. If a 250K retirement is feasible, then a 500K or more retirement looks even better. A question: is that software you use available to self-directed investors, or is it used primarily by financial professionals? I'd love to purchase it for my own planning as a DIY investor and 50-something professional. I watch Tina and Norm also, and appreciate their more narrative approach to living well in retirement.
The software I use can only be purchased by industry. Sorry. It's called Snap Projections.
@@ParallelWealth That's a pity, as the software looked pretty sweet. Perhaps there's something similar available to the average investor from a different source. If you have any recommendations of that kind, please list any financial planning software suitable to financial DIYers and that you think highly of. Indeed, a review or even just an introduction to a few good portfolio analysis and/or financial and retirement planning software options would make for a great PW video.
The Canada Revenue Agency has a pretty good one online.
@@davidblack6413 I do not see anywhere on their website that restricts sales to advisors. In any case you can build something similar if you have decent spread sheet skills