The older you get, the simpler money have to be. No reverse mortgage, no annuity, no $10k a month retirement homes. Look at my plan: 5 years of cash and the rest in 100% stocks.
Keeping things simple is a good way to go as you age. It not only helps you but helps your heirs when you are no longer here. I have to ask with a name like @liverpool3469 you must be scouse or a fan of Liverpool?
My father had a reverse mortgage on his house. When he died,within a few weeks the reverse mortgage company had all his possessions tossed in a dumpster,the house locked up tight and sold within about a month. As far as I’m concerned,reverse mortgages are the equivalent of payday loans for old people. The interest rates on those reverse mortgages are predatory at best. If you know an old person who is struggling financially but owns a home? Do everything you can to persuade them to sell their h9me and use the proceeds to downsize or pay for a continuing care home if that’s what is needed. Don’t let these scumbag lenders rob your elderly loved ones under the illusion of a ‘reverse’ mortgage. Slimy.
I agree that a homeowner would almost always be better off by downsizing or selling to rent in the situation you described. I hope that I can make that rational decision, if and when the time ever comes and I'm faced with this predicament. I prefer to treat my owned home as an untaxable asset that can pass to our kids when the time comes. But, I understand how emotions can play into it and why some choose the reverse mortgage. I think cognitive decline is the worst enemy of making decisions like this later in life. I hope we make the best decisions in the future when we may not be as capable to do so as we hope for.
Thank you for sharing @derekcox6531 I am sorry to hear about your experience there. That is not the first time I have heard stories like that though unfortunately. It is not only the interest rates that are very high, the administrative fees for taking it out or paying anything back are exorbitant.
It should be a huge “red flag” that none of the major banks are offering this scheme. It is a very bad idea for most people and should not be legal. Financial vultures posing as saints. Horrible.
Wow...an honest and factual video. Many financial advisers try to get you to view your retirement through their beliefs. This just provides facts and information. We appreciate that!
Thank you @garth217 glad you enjoyed the video. Although I have my own set of beliefs I just try to put as much information out there as I can and let people decide for themselves how they want to go from there. It is not my retirement, it is yours!
Hi. I discovered your videos a few weeks ago and have watched many of them. Your explanation skills are concise and awesome ! Cheers from the Laurentians (North of Montreal)
Thanks very much @francoisarchambault5550 it is good to have you here and I am glad you are enjoying the videos. It is not often a man with my accent gets complimented for being concise!
First off truly appreciate this scenario as it more accurately reflects most(wanting to retire at 60 and $500k savings with no fancy pension). That being said, if we know that market will crash several times during a 30 year period and that inflation can sky rocket at anytime, why not plan accordingly? Instead of making a BEST case scenario (5% returns & 2% inflation), go for a REAL case scenario.
Some fair points there. I did try to highlight that with the "Danger scenarios" .... the 3% net return (5% returns & 2% inflation) is also on the conservative side so I would argue that is not a best case scenario. I will keep this in mind for future case studies though.
@@Imsosmrt1999 You were the only person that responded about the kilt, I thought I would get a few at least for fun 😂... the next video has been and gone but maybe in an upcoming video I will do it just for the laugh!
Just came across this one. It occurs to me you say nothing about how that $500k came about. If they have had a plan and strategy that worked, and grew year by year over a long period of time then why would you stop because you stop working? What rate did it earn historically? It would also be interesting to see the impact of making withdrawals on an as needed basis. E.g. if they want to travel a couple of times a year make just two withdrawals at the last minute and the rest of the year live at a steady level covered by CPP/OAS. I would estimate this might increase growth by at least 1.5%apr making the rest of your chart look a lot healthier.
I could have told the story about how the $500,000 came about but I didn't think it was necessary, it was irrelevant to the video. Good suggestion on the withdrawals though, will consider that for a future video.
A financial blogger I'm familiar with uses the term FIWOOT - financial independence, work on own terms. Or as I like to think of it - maybe I'll find a part time job doing something I like while retired. At first I bristle at the thought - what? Work in retirement? But, as I picture my days post-career I worry that I'll fall into the trap of starting the day with 'Price' and finish it up with the 'Wheel'. Ugh - I can't think of anything worse. If I can find something to do that I enjoy, that is social, and I can get paid for it I will strongly consider it.
That's the way to look at it. There is something to be said for doing some work on a part time basis that is relatively stress free, that you enjoy and contributes in a positive way socially.
It wouldn't be 500k at that point though would it? Depends where you live but if you are in Ontario or BC then chances are it would be significantly more.
Speaking as someone who has decades left until I finish paying off my mortgage, a paid off house often makes up the majority of Canadians’ net worth and is a HUGE stepping stone to retirement. I’m not saying the video or it’s information are bad but the title is a little clickbaity.
@@holdencaulfield1983 I don't disagree that a paid off house can be very helpful for retirement. If that is everyone's strategy though then we are in big trouble. Did the video not deliver on the title and thumbnail?
It does deliver on the title in that it answers the question of, can a couple retire on $500,000 IF they have a paid off house and IF they receive maximum CPP and OAS benefits. Those are two BIG ifs, especially the house. Without the house the answer to the video’s question would almost certainly be no. Again, nothing wrong with the video’s info, just a bit of clickbaity title. And hey, it got me watching and commenting so it worked.
@@holdencaulfield1983 Fair comment on CPP and OAS. That is definitely a variable that could change. On the house though, whether it is paid off or not doesn't really change the outcomes. The video tells you what you can expect from 500k (regardless of what you spend on housing). Everyone's expenses are different. Some will be able to afford it, others will not...... You could have just told me to wear the kilt!😂
I have 500k in my 30's, I'm shitting bricks...Inflation chipping away at the value rapidly. Economy/employment becoming more precarious and cost of living going insane. I'm more of a perpetuity guy than an annuity guy.
There are lots of concerns just now but if you go back in history are todays concerns greater than what we have dealt with in the past? On the bright side, you are doing very well if you have 500k in your 30's. That is not very common.
@@machinesnmetal well, because 8% is very difficult to achieve, reliably without running into ROC or other risks to the underlying capital. Sure, there are REITs like SRU (I own some), but they rarely raise their dividend and therefore won't keep pace with inflation. Once you start to spend the money it's important to make sure that there is protection against inflation.
Agreed @James_48 .... a dividend portfolio can work very well if a) you can stomach the downturns when they come and b) you have high quality dividend stocks. An 8% dividend sounds great but it doesn't mean a lot if you lose 50% of your original capital.
I agree with you - The majority of my plan is just to hold the dividend stocks and live off the dividends. Why none of these FP ever consider that in their plans is beyond me.
@@FreedomFighter485 I think it is a common strategy. It is my plan, but my plan includes leaving the portfolio behind as an inheritance. I'm also open to spending some of the capital along the way. For instance I will empty (and spend) my RSP funds from age 60-70. After that I'll take the higher CPP and live of that, OAS, and the dividends from my non-registered portfolio, all while maxing out my TFSA every year. My wife will do the same. However, not everyone believes in leaving a sizable inheritance, and in some cases, there are no children or other immediate heirs, and for some it's die with zero no matter what :) !
What about dividend stock in companies like Rbc etc that pay a modestt consistent dividend? We have almost the exact scenario as the video couple , however we both also have modest pensions. We are hoping to use dividends rather than selling our stock to help fund our expenses, downisizing our home and working part-time till we turn 65. When one of us passes we can sell remaining stock to help fund the missing oas and cpp. Hoping for the best. Retiring in 2 years and trying to stockpile an emergency cash fund. Still terrified of making the leap!!
It could work, we follow a dividend strategy with a large number of our clients. The dividend payments have to keep up with inflation though and don't have all your eggs in one basket. You also don't want to get too caught up in the dividend and have that be your only focus. A company may have a great dividend but if it goes down 50% in value, the dividend doesn't mean an awful lot. Being terrified is largely normal, if you ever want to chat about your retirement plan and get a second opinion, feel free to shoot me an email chris.jardine@bellvest.ca
Fact : The S&P made 0 % from 2000 to 2012. Zero. That is 12 years of 0 % return on your equity investments. " Sequence of returns risk " It's a real thing in retirement , and if it hits you early in retirement, it could be devastating to your financial plans. Folks these days expect perpetual double digit returns and 2 % mortgages . That is the exception when viewed through a historical lens people, it's not normal. Why is it people have such insanely short memories. Be cautious of the stock market in retirement. Godspeed.
Wise words. The last 15 years of returns for most folks have seen complacency creep in a bit. Tough times will come again and knowing how you will react to them and what you will do is a key part of planning.
@@beachesfinancialgroup Creep in a bit ? Have you looked at that S&P hockey stick chart ? People have lost their minds buying over valued stocks for 128 months now.
@ if you have home equity in addition to tap into them while living abroad they can Airbnb it and get cash flow to top up on it. If they go live in Latin America they can make it work with a monthly income fund portfolio
@@beachesfinancialgroupDepends where you live in Canada Outside of a big City house paid maybe $750,000 current investment rates and conservative life style . In the city small house paid conservative life style $1.25 /$1.5m Kevin O’Leary thinks the number for Canada is $5 m BUT to be honest he’s not my financial expert. Look estate planning is kinda complex for instance DO you need a house if you get to 85 plus ? Maybe sell the asset rent and invest and live on the income .
@@avengemybreath3084 $500,000 being enough is a very different conversation if you are renting vs owning as I mentioned in the video. To your original comment though on the cost of housing in Canada, most people are not taking 500k to buy a house in retirement, they are using it to fund their retirement.
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The older you get, the simpler money have to be. No reverse mortgage, no annuity, no $10k a month retirement homes. Look at my plan: 5 years of cash and the rest in 100% stocks.
Keeping things simple is a good way to go as you age. It not only helps you but helps your heirs when you are no longer here. I have to ask with a name like @liverpool3469 you must be scouse or a fan of Liverpool?
My father had a reverse mortgage on his house. When he died,within a few weeks the reverse mortgage company had all his possessions tossed in a dumpster,the house locked up tight and sold within about a month. As far as I’m concerned,reverse mortgages are the equivalent of payday loans for old people. The interest rates on those reverse mortgages are predatory at best. If you know an old person who is struggling financially but owns a home? Do everything you can to persuade them to sell their h9me and use the proceeds to downsize or pay for a continuing care home if that’s what is needed. Don’t let these scumbag lenders rob your elderly loved ones under the illusion of a ‘reverse’ mortgage. Slimy.
Exactly! This should be illegal! Thief's !!!!
I agree that a homeowner would almost always be better off by downsizing or selling to rent in the situation you described. I hope that I can make that rational decision, if and when the time ever comes and I'm faced with this predicament. I prefer to treat my owned home as an untaxable asset that can pass to our kids when the time comes. But, I understand how emotions can play into it and why some choose the reverse mortgage. I think cognitive decline is the worst enemy of making decisions like this later in life. I hope we make the best decisions in the future when we may not be as capable to do so as we hope for.
Thank you for sharing @derekcox6531 I am sorry to hear about your experience there. That is not the first time I have heard stories like that though unfortunately. It is not only the interest rates that are very high, the administrative fees for taking it out or paying anything back are exorbitant.
It should be a huge “red flag” that none of the major banks are offering this scheme. It is a very bad idea for most people and should not be legal. Financial vultures posing as saints. Horrible.
Wow...an honest and factual video. Many financial advisers try to get you to view your retirement through their beliefs. This just provides facts and information. We appreciate that!
Thank you @garth217 glad you enjoyed the video. Although I have my own set of beliefs I just try to put as much information out there as I can and let people decide for themselves how they want to go from there. It is not my retirement, it is yours!
Hi. I discovered your videos a few weeks ago and have watched many of them.
Your explanation skills are concise and awesome !
Cheers from the Laurentians (North of Montreal)
Thanks very much @francoisarchambault5550 it is good to have you here and I am glad you are enjoying the videos. It is not often a man with my accent gets complimented for being concise!
No matter what I learned I still want to see the kilt. If you do, I'll wear mine too!
Let me see what I can come up with!
First off truly appreciate this scenario as it more accurately reflects most(wanting to retire at 60 and $500k savings with no fancy pension). That being said, if we know that market will crash several times during a 30 year period and that inflation can sky rocket at anytime, why not plan accordingly? Instead of making a BEST case scenario (5% returns & 2% inflation), go for a REAL case scenario.
Some fair points there. I did try to highlight that with the "Danger scenarios" .... the 3% net return (5% returns & 2% inflation) is also on the conservative side so I would argue that is not a best case scenario. I will keep this in mind for future case studies though.
@@beachesfinancialgroup Thank you for taking the time to produce these very informative videos, they are of great help.
@@johnnyv5995 You are very welcome. I am glad you are finding value in them, that is why I do it!
Can’t we have it both ways? 1. We learned something valuable from your video; 2. You still have to wear the kilt. 😂
@@Imsosmrt1999 You were the only person that responded about the kilt, I thought I would get a few at least for fun 😂... the next video has been and gone but maybe in an upcoming video I will do it just for the laugh!
Just came across this one. It occurs to me you say nothing about how that $500k came about. If they have had a plan and strategy that worked, and grew year by year over a long period of time then why would you stop because you stop working? What rate did it earn historically? It would also be interesting to see the impact of making withdrawals on an as needed basis. E.g. if they want to travel a couple of times a year make just two withdrawals at the last minute and the rest of the year live at a steady level covered by CPP/OAS. I would estimate this might increase growth by at least 1.5%apr making the rest of your chart look a lot healthier.
I could have told the story about how the $500,000 came about but I didn't think it was necessary, it was irrelevant to the video. Good suggestion on the withdrawals though, will consider that for a future video.
A financial blogger I'm familiar with uses the term FIWOOT - financial independence, work on own terms. Or as I like to think of it - maybe I'll find a part time job doing something I like while retired. At first I bristle at the thought - what? Work in retirement? But, as I picture my days post-career I worry that I'll fall into the trap of starting the day with 'Price' and finish it up with the 'Wheel'. Ugh - I can't think of anything worse. If I can find something to do that I enjoy, that is social, and I can get paid for it I will strongly consider it.
That's the way to look at it. There is something to be said for doing some work on a part time basis that is relatively stress free, that you enjoy and contributes in a positive way socially.
Nicely done and said!
Thanks very much, glad you enjoyed it
Not factoring the home value? That’s everything for most people
It wouldn't be 500k at that point though would it? Depends where you live but if you are in Ontario or BC then chances are it would be significantly more.
As soon as I heard “paid off home in GTA” I tuned out.
Why so?
Speaking as someone who has decades left until I finish paying off my mortgage, a paid off house often makes up the majority of Canadians’ net worth and is a HUGE stepping stone to retirement. I’m not saying the video or it’s information are bad but the title is a little clickbaity.
@@holdencaulfield1983 I don't disagree that a paid off house can be very helpful for retirement. If that is everyone's strategy though then we are in big trouble. Did the video not deliver on the title and thumbnail?
It does deliver on the title in that it answers the question of, can a couple retire on $500,000 IF they have a paid off house and IF they receive maximum CPP and OAS benefits. Those are two BIG ifs, especially the house. Without the house the answer to the video’s question would almost certainly be no. Again, nothing wrong with the video’s info, just a bit of clickbaity title. And hey, it got me watching and commenting so it worked.
@@holdencaulfield1983 Fair comment on CPP and OAS. That is definitely a variable that could change. On the house though, whether it is paid off or not doesn't really change the outcomes. The video tells you what you can expect from 500k (regardless of what you spend on housing). Everyone's expenses are different. Some will be able to afford it, others will not...... You could have just told me to wear the kilt!😂
I have 500k in my 30's, I'm shitting bricks...Inflation chipping away at the value rapidly. Economy/employment becoming more precarious and cost of living going insane. I'm more of a perpetuity guy than an annuity guy.
There are lots of concerns just now but if you go back in history are todays concerns greater than what we have dealt with in the past? On the bright side, you are doing very well if you have 500k in your 30's. That is not very common.
I think homes in Scotland are cheaper than in Toronto
Significantly cheaper.
Canada is overpriced, overrated and underwhelming
500000 in dividend stocks at 5 % plus would generate enough cash to fund most of their needs.
Why not put it all into 8%? The extra 3% would make a big difference on the bottom line.
@@machinesnmetal well, because 8% is very difficult to achieve, reliably without running into ROC or other risks to the underlying capital. Sure, there are REITs like SRU (I own some), but they rarely raise their dividend and therefore won't keep pace with inflation. Once you start to spend the money it's important to make sure that there is protection against inflation.
Agreed @James_48 .... a dividend portfolio can work very well if a) you can stomach the downturns when they come and b) you have high quality dividend stocks. An 8% dividend sounds great but it doesn't mean a lot if you lose 50% of your original capital.
I agree with you - The majority of my plan is just to hold the dividend stocks and live off the dividends. Why none of these FP ever consider that in their plans is beyond me.
@@FreedomFighter485 I think it is a common strategy. It is my plan, but my plan includes leaving the portfolio behind as an inheritance. I'm also open to spending some of the capital along the way. For instance I will empty (and spend) my RSP funds from age 60-70. After that I'll take the higher CPP and live of that, OAS, and the dividends from my non-registered portfolio, all while maxing out my TFSA every year. My wife will do the same. However, not everyone believes in leaving a sizable inheritance, and in some cases, there are no children or other immediate heirs, and for some it's die with zero no matter what :) !
Great Video!
Thanks very much glad you enjoyed it. Are you close to retirement?
Their home value is all the value. So they can retire if they sell or reverse mortgage
Depends where they want to live though.
What about dividend stock in companies like Rbc etc that pay a modestt consistent dividend? We have almost the exact scenario as the video couple ,
however we both also have modest pensions. We are hoping to use dividends rather than selling our stock to help fund our expenses, downisizing our home and working part-time till we turn 65. When one of us passes we can sell remaining stock to help fund the missing oas and cpp. Hoping for the best. Retiring in 2 years and trying to stockpile an emergency cash fund.
Still terrified of making the leap!!
It could work, we follow a dividend strategy with a large number of our clients. The dividend payments have to keep up with inflation though and don't have all your eggs in one basket. You also don't want to get too caught up in the dividend and have that be your only focus. A company may have a great dividend but if it goes down 50% in value, the dividend doesn't mean an awful lot. Being terrified is largely normal, if you ever want to chat about your retirement plan and get a second opinion, feel free to shoot me an email chris.jardine@bellvest.ca
Also, how do they go to spending only about $7000 a year in their 90s????
Where do you get that from?
Outstanding advice ✅
Thank you sir, always appreciated!
Go away
Where does the $60000 income come from????? Surely not CPP and OAS????????
CPP, OAS plus their $500,000 in savings.
Fact : The S&P made 0 % from 2000 to 2012. Zero. That is 12 years of 0 % return on your equity investments. " Sequence of returns risk " It's a real thing in retirement , and if it hits you early in retirement, it could be devastating to your financial plans. Folks these days expect perpetual double digit returns and 2 % mortgages . That is the exception when viewed through a historical lens people, it's not normal. Why is it people have such insanely short memories. Be cautious of the stock market in retirement. Godspeed.
Wise words. The last 15 years of returns for most folks have seen complacency creep in a bit. Tough times will come again and knowing how you will react to them and what you will do is a key part of planning.
@@beachesfinancialgroup Creep in a bit ? Have you looked at that S&P hockey stick chart ? People have lost their minds buying over valued stocks for 128 months now.
Fair enough, maybe a bit of an understatement!
Please use in your calculations the average CPP and the average OAS
Thanks for your comment. I will consider this for future videos.
SOUNDS LIKE I WILL BE WORKIG TILL I AM 94 years old
Hopefully you won't be working that long but would be quite impressive if you did!
I think £500,000 would work but not $500000 CAD
It is all situational, everyone has different wants and needs.
@ if you have home equity in addition to tap into them while living abroad they can Airbnb it and get cash flow to top up on it. If they go live in Latin America they can make it work with a monthly income fund portfolio
@ if on the other hand you retire in India $500,000 cad without anything else would suffice
No
Fair enough, what is your number?
@@beachesfinancialgroupDepends where you live in Canada
Outside of a big City house paid maybe $750,000 current investment rates and conservative life style .
In the city small house paid conservative life style $1.25 /$1.5m
Kevin O’Leary thinks the number for Canada is $5 m BUT to be honest he’s not my financial expert.
Look estate planning is kinda complex for instance DO you need a house if you get to 85 plus ? Maybe sell the asset rent and invest and live on the income .
@@daviddrew7851 100% depends on where you live. So many variables as well. Some will be able to live quite happily on $500k, others not so much.
I know a lot of Acadians who speaks english and french with the same accent!!
My French is very limited!
No. That’s like $300k American. Can’t buy a decent house in a Canadian city for under $1,2 million.
Are you buying a house in retirement though? Most people aren't.
@ renting? Seems unstable. I would think owning a house is a minimum requirement to retire.
@@avengemybreath3084 $500,000 being enough is a very different conversation if you are renting vs owning as I mentioned in the video. To your original comment though on the cost of housing in Canada, most people are not taking 500k to buy a house in retirement, they are using it to fund their retirement.