I have found that one of the hardest things to do in retirement, after decades of saving "for the future", is that now is the time to spend. You'd think it would be easier but it's not, old habits die hard. I try and tell myself "If I didn't save it so I could spend it then why did I save it?" Essentially when you are retired that future you were saving for is now, and it's okay to spend your retirement savings enjoying your actual retirement, otherwise all that saving and sacrifice was wasted. It's still not easy though.
My wife and I have been retired for a little over a year now, I’m having a very difficult time transitioning from saving to spending, our non real estate net worth has risen 10% in that year. I’m unaccustomed to spending on pleasure.
@@ddavidson5 It's far more difficult to spend on "luxuries" after a lifetime of saving. I've projected we'll need to withdraw an extra 60k/yr to wind down our RRSP/RRIFs in a reasonable time but have no idea what to spend it on! CPP/OAS sems to cover all the basics and more. Sometimes, I wonder why did we save so much ?
@@martik778the struggle is real. It’s not as easy as ppl might think,to spend money on “something” if you don’t see any particular thing that you want to or need to spend on.
@@martik778as my financial adviser said to me "There is no reason for you to fly economy again if you don't want to". Like I said before old habits die hard but if not now then when? Still, I understand the struggle, it's not easy to spend after a lifetime of saving.
So many people miss the tax implications of their plan. Adam and his team do a great job of optimizing the cashflow to minimize taxes. I was able to retire a few years earlier than I had planned simply because of this planning. - I highly recommend getting a full and detailed plan that has taxes "optimized" before you pull the trigger.
Just when I think there is nothing new to learn from these great videos, you trigger more things to think about. I've been lining up the liquid assets for 3-5 years out, but hadn't thought about how the monthly cash flow will work. Still not sure, but now I know what I don't know! Thank Adam!
I would set aside 2 years of RRSP/RRIF withdrawals in liquid assets so that it can be utilized during a market correction. I think target date funds are another option.
there's no way to know if cost of opportunity is greater than risk of correction. If you did that in 2018 or pretty much any time that decade, you'd be losing 20% a year compared to market index.
@@mrslcom I’m thinking about it this way: if my retirement is to last 30 years.. losing 25% on one of the years is really just 25% of 33% so that’s really not significant . Even losing 5 years at 25% is not large. Them market recovers and we’re back in the game.
Withholding tax is a huge part of my plan - simple excel sheets (free on Google), helped me see what those taxes are and how much I will get back from the previous year's tax refund. Basic knowledge about tax credits I can get (and when), how brackets shift every year etc gave me a more realistic view on what taxes I will actually pay. I have also put 3 different tax free, safe (GICs, high interest savings, TFSA savings accts), side investments to roll along with my retirement so I will always have access to cash to offset the taxed income streams I will be melting down. This also helps for those periods when the market dips and needs time to recover. I appreciate your point about consistent withdrawals - keeping a financial routine is so important, just like in your working years. Keeping yourself on track will reduce stress. We all want security in retirement. I really don't know what we'd do without people like you educating us about retirement. You've been a Godsend to me and so many others!
I doubt that the majority of retirees are capable of managing their cashflow and investments in a spreadsheet. I know quite a few seniors who have never used a SS. Paying an "advisor" 1-2% with ~5% yield expectations is ridiculous too. I think many retirees just "wing it".
Good advice as always Adam. Almost a year into retirement and definitely feeling what many hear have voiced; concern over spending out of savings. The current market definitely adds to the consternation, despite a balanced, diversified portfolio.
The first and important plan is to make more money, passive income stream after Retirment. when you have more money, you don't need spend much time on planning
Hello Adam, Can you comment on what to expect when you are transitioning from working to retirement? I am specifically wondering about the time between working and earning income, to retirement when spending savings. Is it as simple as timing planning with our planner? I would hate to have an issue where we would not have income to cover basic needs because of lack of income. Thanks
@@ParallelWealth Thanks so very much. It is amazing just how important it is to have relevant information around this whole area of our lives in order to be less stressed.
Hello I've been watching your videos for awhile now. And i would like to retire in 10-15 years. When is it a good time to start a plan. Sooner or later because of the markets and inflation is hard to predict 10 years from now?
8-12% is the most common average tax rate in retirment for couples. This is based on hundreds of plans for the average Canadian. Single ppl pay much more unfortunately.
I am managing my own LIF, it is conservative and if all hell breaks loose, I do not need to sell stocks for a few years. The problem is I am using a spreadsheet listing stocks and bonds, GICs, when they pay their dividends, but it is clumsy and can only be updated manaually. I am still waiting for some computer programmer to develop something better than a spreadsheet.
People also need to be aware that if the have GICs there is no withholding tax so a plan need io include those thoughts. You just might need to pay a bit extra tax from your RRSP/RRIF to cover a shortfall.
Adjusting to spending versus saving will be a difficult transition.
I have found that one of the hardest things to do in retirement, after decades of saving "for the future", is that now is the time to spend. You'd think it would be easier but it's not, old habits die hard. I try and tell myself "If I didn't save it so I could spend it then why did I save it?" Essentially when you are retired that future you were saving for is now, and it's okay to spend your retirement savings enjoying your actual retirement, otherwise all that saving and sacrifice was wasted. It's still not easy though.
My wife and I have been retired for a little over a year now, I’m having a very difficult time transitioning from saving to spending, our non real estate net worth has risen 10% in that year. I’m unaccustomed to spending on pleasure.
@@ddavidson5 It's far more difficult to spend on "luxuries" after a lifetime of saving. I've projected we'll need to withdraw an extra 60k/yr to wind down our RRSP/RRIFs in a reasonable time but have no idea what to spend it on! CPP/OAS sems to cover all the basics and more. Sometimes, I wonder why did we save so much ?
@@martik778the struggle is real. It’s not as easy as ppl might think,to spend money on “something” if you don’t see any particular thing that you want to or need to spend on.
@@martik778as my financial adviser said to me "There is no reason for you to fly economy again if you don't want to". Like I said before old habits die hard but if not now then when? Still, I understand the struggle, it's not easy to spend after a lifetime of saving.
So many people miss the tax implications of their plan. Adam and his team do a great job of optimizing the cashflow to minimize taxes. I was able to retire a few years earlier than I had planned simply because of this planning. - I highly recommend getting a full and detailed plan that has taxes "optimized" before you pull the trigger.
Thanks Adam! Watching right now. 🎉
Just when I think there is nothing new to learn from these great videos, you trigger more things to think about. I've been lining up the liquid assets for 3-5 years out, but hadn't thought about how the monthly cash flow will work. Still not sure, but now I know what I don't know! Thank Adam!
Great to hear!
Great video, Adam. Looking forward to seeing my detailed plan in October. 🎉
the only plan; spend less and earn more 😀
So appreciated Adam, wish my advisor was this proficient in explaining things!!! Lord knows she's paid enough for it.
Thanks! Appreciate the kind words
Thanks Adam, very informative as usual. 🙂
I would set aside 2 years of RRSP/RRIF withdrawals in liquid assets so that it can be utilized during a market correction. I think target date funds are another option.
there's no way to know if cost of opportunity is greater than risk of correction. If you did that in 2018 or pretty much any time that decade, you'd be losing 20% a year compared to market index.
Nothing is guaranteed in life. However, it might make you sleep easier. The pain of a loss is less preferable than the pleasure of a gain.
@@mrslcom I’m thinking about it this way: if my retirement is to last 30 years.. losing 25% on one of the years is really just 25% of 33% so that’s really not significant . Even losing 5 years at 25% is not large. Them market recovers and we’re back in the game.
Withholding tax is a huge part of my plan - simple excel sheets (free on Google), helped me see what those taxes are and how much I will get back from the previous year's tax refund. Basic knowledge about tax credits I can get (and when), how brackets shift every year etc gave me a more realistic view on what taxes I will actually pay. I have also put 3 different tax free, safe (GICs, high interest savings, TFSA savings accts), side investments to roll along with my retirement so I will always have access to cash to offset the taxed income streams I will be melting down. This also helps for those periods when the market dips and needs time to recover. I appreciate your point about consistent withdrawals - keeping a financial routine is so important, just like in your working years. Keeping yourself on track will reduce stress. We all want security in retirement. I really don't know what we'd do without people like you educating us about retirement. You've been a Godsend to me and so many others!
Rental income (40%) and Dividend Portfolio (60%) with earnings 4X monthly costs plus a 2-year emergency fund. It can't get any simpler than this
I doubt that the majority of retirees are capable of managing their cashflow and investments in a spreadsheet. I know quite a few seniors who have never used a SS. Paying an "advisor" 1-2% with ~5% yield expectations is ridiculous too. I think many retirees just "wing it".
Good advice as always Adam. Almost a year into retirement and definitely feeling what many hear have voiced; concern over spending out of savings. The current market definitely adds to the consternation, despite a balanced, diversified portfolio.
The first and important plan is to make more money, passive income stream after Retirment. when you have more money, you don't need spend much time on planning
What is a good pessimistic and optimistic returns for a 30 safe/70 market plan?
Hello Adam,
Can you comment on what to expect when you are transitioning from working to retirement?
I am specifically wondering about the time between working and earning income, to retirement when spending savings. Is it as simple as timing planning with our planner? I would hate to have an issue where we would not have income to cover basic needs because of lack of income.
Thanks
Yup, super simple. You could retire Friday and first RRIF payment Monday if needed. Just coordinate with your planner.
@@ParallelWealth Thanks so very much. It is amazing just how important it is to have relevant information around this whole area of our lives in order to be less stressed.
Hello I've been watching your videos for awhile now. And i would like to retire in 10-15 years. When is it a good time to start a plan. Sooner or later because of the markets and inflation is hard to predict 10 years from now?
Retirement planning 5-10 years before retirement ideally. Prior to that more financial planning
10%?? Is that possible?
8-12% is the most common average tax rate in retirment for couples. This is based on hundreds of plans for the average Canadian. Single ppl pay much more unfortunately.
@@ParallelWealth A little discriminatory, no? Is it possible for a single person to get down to 10 or 12? Think my guys say 15 for me, as a single.
@maryslapsys5141 always possible, depends on your assets and income need.
@@ParallelWealth This is close to what we expect to pay too. ~38k from CPP/OAS with 51k in personal credits. When one dies, it'll be more than double
I am managing my own LIF, it is conservative and if all hell breaks loose, I do not need to sell stocks for a few years.
The problem is I am using a spreadsheet listing stocks and bonds, GICs, when they pay their dividends, but it is clumsy and can only be updated manaually. I am still waiting for some computer programmer to develop something better than a spreadsheet.
Have you tried Passiv ?
My discount broker (InvestorsEdge) lists all this info for my LIF, RRIF TFSA etc online. I summarize it in my own sheets
People also need to be aware that if the have GICs there is no withholding tax so a plan need io include those thoughts. You just might need to pay a bit extra tax from your RRSP/RRIF to cover a shortfall.