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  #91  
Old 09-23-2023, 03:44 PM
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Map you do make a good point. When you are to the point of calcualting a budget or retirement spend you are likely close to retirement. If you don't have enough saved all it really tells you is you need to keep working or drastically reduce your life style.

In our case, my wife has kept a detailed budget for close to 35 years. It has always been an integral part of our detailed financial plan. Budget or no, what actually makes the biggest difference is to start saving significant amounts as soon as you start working, and no later than by age 25. The power of compounding works best over the longest period you can do it for. I know I tend to harp on this point a lot but it really is the very best chance for success.

In reality, the budget just helps you maximise saving while also ensuring you have enough funds to really enjoy life as you go along. Stuff that is great fun to do at 30 isn't so interesting at 70. You need to balance savings with also enjoying your life. Enough stuff happens there is no quarantee yo make it to 40 let alone 85.

Something people really need to think about is the high cost of care. If you don't qualify for a subsidy, a full time care home runs about 9 grand a month. In home care runs 40 bucks an hour, so full time care would be 100,000 a year.

Last edited by Dean2; 09-23-2023 at 04:03 PM.
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  #92  
Old 09-23-2023, 05:29 PM
big zeke big zeke is offline
 
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Default It's not hard if you want it

For us, we keep track of all spends greater than $5 in something called the money book located in the kitchen. We write down date, vendor, payment method, amount and description and at the end of each month total the spend against the income, divvy the spend into categories and figure out which are one-time (like winter tires) and which are ongoing (like utilities). Over a dozen years we have a good handle on our spend as well as areas we can trim if needed.

Likewise, retirement savings has been a focus for 30+ yrs, compounding puts far more into the nest egg than I ever will. Currently the nest egg grows by 10X what our annual spend is.

I have friends who start retirement planning at 45 or 50, it's tough to shovel enough into the account to retire comfortably...these same folks get new vehicles every 5 yrs and 2 flying vacations annually. For them a 7 figure nest egg is as likely as living on Mars.

All the books, advice and guidance on earth is worthless unless you are committed to implementing it...guess it depends how bad you want it.

Zeke
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  #93  
Old 09-23-2023, 07:14 PM
HVA7mm HVA7mm is offline
 
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It's tough to say how large of a nest egg will be required, without a crystal ball pretty much everyone's situation is going to be different. Lifetime earnings will come into play as will lifestyle, spending habits, children, divorce, personal health, savings/pension, debt etc. Like everyone has stated there is no one formula to determine what will be necessary, as life can change in a heartbeat. For our own personal situation our plan was never super detailed other than living within our means, paying down debt as quickly as we can and never feeling the need to drive new vehicles.

We're 53 & 51, the house was paid off 4 years ago and pretty much all renovations and maintenance items have been done, no outstanding debts. We're not retiring yet (although I accepted a voluntary separation package from my job of 26 years a couple of months ago) and plan on working for a few more years and my wife is still working full time. We have a daughter entering post-secondary, but have been putting away for that since she was an infant as well so it should be covered. We're both healthy and active and plan to stay that way barring any curve ball that may be thrown our way.

We were never high wage earners but have always managed to balance a good lifestyle with putting away for retirement. Time will tell, but if all of the stars align and we continue to lead a healthy active lifestyle, I think that we'll be just fine.
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  #94  
Old 09-24-2023, 02:30 PM
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Pretty close to right on track when this thread was posted in 2020.
Said 3 to 4 years and pulled the pin a couple weeks ago & I feel pretty good about it, but the darn elk aren’t cooperating, ha. Yet.

We’ll see if the invitation to jump back in contracting come my way by year end.
Can then decide as all that will be toy money anyways.
That’s the condition for going back I expressed to the wife, as we don’t need it to live.
So I’d commit to it for a yr or so only if we “really live” from that added income.

TBark
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  #95  
Old 09-25-2023, 10:43 PM
roper1 roper1 is offline
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Lots of real world experience here. Thanks guys! I started saving at 22, owned one new vehicle in my life, still have it. Like to hunt & fish & boat as much as possible, feels like I need to work a few years yet. Thanks again!
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  #96  
Old 09-27-2023, 10:35 AM
Drewski Canuck Drewski Canuck is offline
 
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What ever happened to the mantra of having $1 Million dollars to retire on?

Simple, with Inflation, and bloating tax bills, and crazy Carbon Taxes, none of us can ever be sure we will have enough to retire on. That, and we are living alot longer!

Drewski
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  #97  
Old 09-27-2023, 03:48 PM
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Here is the correct approach to planning for retirement. These guys think about it in exactly the way and terms I have advocated for years.

https://dynamic.ca/en/insights/plann...portfolio.httm




With our Paycheque Portfolio™ approach, retirees spend income not capital
Because retirement income should last a lifetime.

A Paycheque Portfolio™ Approach: Retirement Income the Right Way

Daryl Diamond
Chief Retirement Income Strategist
OLYMPUS DIGITAL CAMERA
Have you ever been driving somewhere and suddenly find yourself wondering if you’ve got enough fuel to complete the trip? Your gas gauge is flashing yellow, you’re an hour from your destination, and there’s not a service station for miles. We’ve all been there. It’s an unsettling feeling, which makes for a very stressful journey.

Running on empty is never a good feeling – especially when it comes to retirement.

How enjoyable will your golden years be if you’re constantly worried about running out of money, or if every single decision has to be weighed carefully with an eye on your monthly investment statements?

Unfortunately, that’s the reality for many Canadians. According to a recent survey¹, half of Canadians said they often worry about outliving their money, while 76% plan to work longer than their parents to retire comfortably.

As a former advisor with 40-plus years of experience in the industry, I’ve spent the better part of my career helping clients build the sustainable income they need in retirement. For most people, entering the retirement phase is a really big transition. For their entire working life, people have been building their assets, and now all of a sudden they’re in a position where they’re in the spending phase of retirement. Psychologically, that's a big corner to turn for people.

It's also a period of conflicting objectives. On the one hand, retirees want to spend money and perhaps travel while their health is good; on the other hand, there’s a very real fear of outliving their income. And there’s no shortage of news items stoking retirees’ fears – especially articles about that “magic number” they’ll need to live comfortably. Is it $500,000, $2 million, or $5 million? In my experience, there really isn’t a “magic number.” It’s not a realistic approach.

How do you build a viable retirement plan when so many variables, like quality of health and life span, are unknown? That’s why a focus on income is so important.

Changing the Retirement Conversation: From Decumulation to Income
As Canadians enter retirement, we often hear the word “decumulation” to denote the spending phase. However, I’m not a fan of that word, and here’s why. When we talk about accumulation, it brings to mind a buildup, or increase, of capital that will subsequently be used to generate the income retirees will need.

However, the word “decumulation” suggests the exact opposite: that we're on a critical path to totally spending all of our money. We don't want that to be the mindset of the retiree. By eliminating the “decumulation” mindset, we're making retirees more comfortable with this idea of the sustainability of their assets to deliver that retirement income.

Want to know more?
The Big Shift(PDF Opens in a new tab)
Retirement Income Map(PDF Opens in a new tab)
Retirement Challenge(PDF Opens in a new tab)
Dynamic Yield Curve(PDF Opens in a new tab)
Paycheque Portfolio™ Approach: Re-envisioning Retirement Income
Retirement doesn’t have to be an inevitable depletion of assets. That's not been my experience with the clients we've worked with over three-and-a-half decades – and that’s across a broad range of wealth levels.

Instead of focusing on a “magic number,” the key is having a strategy that allows us to continue to deliver the retirement cash flow people need, but at the same time, not be selling the investments that are generating that income – especially at a point in time where the investments are down in value. This distribution strategy, which I call the Paycheque Portfolio™ approach, has one central focus: to deliver consistent income in bull and bear markets alike.

In the 15 years we used the Paycheque Portfolio™ approach, if we didn't sell the investments, if we didn't move to cash (even when we're taking income from the portfolios), the account values have always, without exception, recovered and ultimately exceeded the value that they were prior to the downturn in the market.

Four Simple Words: Spend Income, Not Capital
As a retirement income planner dedicated to building sustainable cash flow I was continually focused on four key words: spend income, not capital, which is really the central focus of the Paycheque Portfolio™ approach. It’s a strategy that lets income arrive without having to sell anything – even in market downturns.

The point being, you don't have to sell anything to get the paycheque you need to fund your retirement, which allows time for the investments to recover in value after they've gone down. We have seen that little miracle repeatedly. I cannot underscore how important the last part of that phrase is, psychologically speaking, when markets and account values are down. The income is steady, in bull and bear markets alike.

"Spend the income, not the capital," is a motto that people can embrace and understand. They can see it. It's proven to them over and over again that it's efficient, that it works, and that it’s sustainable. And it’s extremely easy to service for advisors. That's worth a lot for both clients and advisors.

While no retirement strategy is perfect, paycheque portfolios sure check a lot of boxes.

¹ Source: Benefits Canada, “76% of Canadians expect to work longer than their parents to retire comfortably: survey,” May 26, 2023.

Resources

Registered Retirement Savings Plan (RRSP)
The purpose of an RRSP is to save by decreasing your taxable income and deferring tax payments on your investment until retirement.

Opens in a new tab

Tax-Free Savings Account (TFSA)
The Tax-Free Savings Account is a flexible registered savings account that allows for tax-free withdrawals and helps investors to save more.
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  #98  
Old 09-29-2023, 05:44 AM
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Quote:
Originally Posted by huntinstuff View Post
Nailed it

Retire and enjoy yourself. Be satisfied. Decide on an age and do it. Dont trade years for bucks. Its a poor trade.

There is no magic age. Everyone is different.
Everyone IS different is right!

I can retire at any time. 63yrs old. Healthy, no debt, two newer vehicles, $1,000,000 pension with a pretty good TFSA. Sounds like I'm bragging but my point is that I'm still working because I still enjoy my job. Don't hate getting up every day and going in along with the fact that at my age they don't give me many crappy jobs any more. I might pull the pin next year and head to our moose camp in Ontario with my brothers next fall.

I know others that choose to work for the same reason.
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  #99  
Old 03-06-2024, 10:32 AM
walleyetis walleyetis is offline
 
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Thought I’d give this thread a bump. Just curious with the ongoing clown show in Ottawa, how many of us are having to adjust or abort retirement plans? Makes me sick how Castro and his unaccountable corruption has negatively affected so many Canadians. Anyone else feel like they should be filing taxes in Ukraine this year?
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  #100  
Old 03-06-2024, 10:55 AM
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Sundancefisher Sundancefisher is offline
 
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Quote:
Originally Posted by -JR- View Post
T Bark I know where you are coming from . I am 60 now and my numbers say I can retire this month easily ,but its so hard to let go after working 45 years .
Money gets better every year.
The sad truth is ,we will not live long enough to enjoy it all .
From experience… life changes fast as you age.

I had a buddy who retired from Amoco… a month later I met him for lunch and he mentioned a medical concern… told him to see the doctor right away. He passed away 3 weeks later.

Putting off retirement and things you always wanted to do is a mistake.

You hurt your back, knees, feet, ankles and walking becomes a problem and now it impacts travel, fishing, hunting and more. Develop internal problems and the same can happen. Over 65 and have a major health issue and good luck getting travel insurance.

The older one gets, the harder it is to do things you could easily do when younger.

A Utopian world would see you see and do everything you wanted when you were 20-40 and then work till you drop when older.

One does need things to do when you retire.

One also can’t take money with you when you die.

One way to balance wanting to work with life is to see if you can take unpaid leave… say if you have a months vacation… see if you can get two more months unpaid but keep benefits.

Spend some of your savings now and travel. Spending money on yourself to say go on a great fishing trip or see the world when you are 60 will be far more enjoyable than when you have potential health and mobility issues at 70.



I also encourage EVERYONE to get a FIT test for colon cancers. It can save your life.
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  #101  
Old 03-06-2024, 03:34 PM
Map Maker Map Maker is offline
 
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Yeah. I’m reassessing mine.
Re-org at my work brought a lot of undesirables/incapables to management
positions.
I just found out I can “defer my pension”. In that, I can leave and get a better job somewhere else and my pension will sit until I retire.
Works for me.
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  #102  
Old 03-06-2024, 03:53 PM
pat brennan pat brennan is offline
 
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One thing for sure, nobody dies wishing they had more money! Several people I worked with retired, in good health, only to pass away only a few years later. Time is the precious commodity! If you can comfortably retire, you should think hard about why you have not already.
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  #103  
Old 03-06-2024, 04:37 PM
Grizzly Adams1 Grizzly Adams1 is online now
 
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Quote:
Originally Posted by Drewski Canuck View Post
What ever happened to the mantra of having $1 Million dollars to retire on?

Simple, with Inflation, and bloating tax bills, and crazy Carbon Taxes, none of us can ever be sure we will have enough to retire on. That, and we are living alot longer!

Drewski
Own a decent house now and you've got close to a million bucks.
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  #104  
Old 03-06-2024, 05:33 PM
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Semi retired back in Sept, and have decided now to make it permanent, whoop whoop.
Although I’m finding my first winter to not be working is tough.

Decision was mostly based on not really needing to work, and the fact that (has been said previously) earning potential of experienced contract Op / CSU contractors was not what I’d hoped.

I won’t mention the rate, but contract headhunter service providers have been reaching out to me over the winter and the rates that they are quoting for term work of 3 to 12 months has really fallen off the charts to what it was a year or more ago.

So in the end, you do what’s right for you.
Hunting and fishing for life, ha.

TBark
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  #105  
Old 03-06-2024, 05:48 PM
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Quote:
Originally Posted by Grizzly Adams1 View Post
Own a decent house now and you've got close to a million bucks.
This only based on town, city and neighborhood. I live in a decent house in a decent neighborhood and it is worth half that.
WDF
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  #106  
Old 03-06-2024, 06:03 PM
elkhunter11 elkhunter11 is online now
 
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I retired 9 years ago after 35 years of work. I maxed out my RRSPs and TSFAs, and kept them in self directed portfolios in the markets. I took a 25% penalty for retiring at 55, but I supplement my pension by withdrawing from my RRSP to make up the difference. I haven't had a mortgage since 2000, as I lump summed my mortgage to pay it off in 8 years, and that greatly reduces my cost of living. I had enough of working after 35 years, and was happy to retire, as soon as I could. I know far too many people that retired late, and died within a few years.
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  #107  
Old 03-06-2024, 07:50 PM
Wes_G Wes_G is offline
 
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Quote:
Originally Posted by cody j View Post
May want to ask Freeland how much of your savings she’ll need to fix the economy. She’s looking for ideas on how to unlock people’s savings.
I think within the next 15 years the TFSA will no longer be tax free. Once the average saver starts to have 200 to 300 thousand sitting in there, the govt is going to start getting really antsy to get their hands on that.
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  #108  
Old 03-06-2024, 08:05 PM
fishtank fishtank is offline
 
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Originally Posted by tirebob View Post
No, not at all... My mom is healthy and strong as an ox and will more than likely outlive me, and even if she doesn't the money is not that large and both my sister and I made it clear she should live the life she wants now since she never got to do it before and if she really wants to do it right, make sure the cheque to the funeral home is the very first one in her life that bounces.

My parents were simple, hardworking small town people and made their own way in life without anything of note coming to them from their parents, just as their parents before them. My kids were always taught that they make their own way in life and it is not up to anyone else to give them that way and so they do.

To each their own.

Look, I am not telling anyone they are wrong for saving, but what I am saying is when you put more value on an unknown commodity than you do living a good life and pursuing happiness with what is right in front of you, you are not always going to win. Yes I may get to the end and not have a lot to show for it, but I will still be able to look back with a smile and not feel like I missed out on anything and to me that is worth a heck of a lot more than dollars.
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  #109  
Old 03-07-2024, 08:53 AM
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This is how I did the calculations. I looked at what my take home pay was for a month, with NO overtime. It was surprising to actually see that figure because we always worked so much OT, but as we all know OT isn't a given it's a bonus, so realistically my no OT take home was measured against my potential CPP, OAS and company pension income. The difference is what I was actually getting paid for working is how I looked at it. Working net income $7000 per month vs pension income $6,000 per month.

After working for 50 years, mostly shift work, I figured my free time was worth more to me than the difference between my take home pay [$1,000 per month], and my pension incomes. So I retired. I figured I was working 160 hours a month for $1,000 more than my retirement income would be. Or $6.25 per hour.

I didn't even take into account the vehicle depreciation, fuel and insurance savings made by not driving to work 15-20 days per month or having to put up with corporate BS, like cancelling approved vacations.
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  #110  
Old 03-07-2024, 10:57 AM
-JR- -JR- is offline
 
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Default Retirement is shorter than you think !

Coming from a retired guy ,everything should be paid off before retiring.
The biggest cost every year is paying property tax and house & auto insurance. Food and utilities gets covered by CPP and old age .
I still have not touched my company pension or RRSP. in 4 years .
I'm not into traveling much outside of Alberta now that i am getting older.If i do i will forget about the trip in 1 week anyways Lol.
So no big expense there. The only big spending I do weekly is fuel for my truck and boat. Having a large RRSP is nice ,so you never have to worry for the next 10 or 20 years . Retirement is short , its not 50 years !

Last edited by -JR-; 03-07-2024 at 11:03 AM.
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  #111  
Old 03-08-2024, 10:50 AM
graybeard graybeard is offline
 
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I see other stories reinforce my retirement approach...

I was told that you can't start to save until you have no debt.

Early in my life, a finance guy told me before you retire, to pay off all my debts including my mortgage. Few money returns will pay out more than that outstanding mortgage, loans, credit cards interest etc....SO I DID JUST THAT.

Did up a budget of our monthly expenses ....then saved, saved and saved....then come and see him, debt free, on some low risk investments....

My family were long livers so I deferred my CPP and OAS until I was 70.

I live comfortably, enjoying my pastimes and money/savings are in place as I age in moving forward.

This may not be for everyone; but it worked for me.

Good luck...
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  #112  
Old 03-08-2024, 05:22 PM
Gillfisher Gillfisher is offline
 
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Default Required retirement nest egg

Interesting thread being that i will turn 65 in 2026 at which time i plan to retire and collect cpp and oas and a small pension only 7 yrs of partcipation.

In 2026 I will have been in my trade for 46 yrs, I have never been out of work a single day in my life since I was 18 yrs old. My wife and I are debt free including mortgage free for years. We are power saving Im gonna ride my Harley and live life on my terms I can hardly wait!
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  #113  
Old 03-08-2024, 07:07 PM
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Lots of good points on this thread.

I’m 36 and my wife is 32. Our goal is to retire when I reach 58. Lofty goal but we invest about 17% of our income. As mentioned in here, I think having the mortgage paid off before retirement is a non negotiable. Not big travellers, have a fairly modest lifestyle. Right now it’s still back of the napkin planning but I think the 2-2.5 million dollar range by retirement time is what we will need in our tfsa’s and RRSPs.

For any young people in here, start investing as early as you can. It will do wonders for you. Most people like me, kick ourselves for starting later.
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  #114  
Old 03-08-2024, 10:27 PM
big zeke big zeke is offline
 
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Default Delightful

Mr Bigbuck, reading your post is delightful...you have half (maybe more) of your peers beaten...you have a plan, many at your age don't.

A few key tenets I would take away from these many good posts:

-Know your expenses and know where you can trim in lean times. Sickness, job loss etc can come up quickly and you need to be able to adjust to stay on track.
-Become debt free as young as possible esp if that debt is not tax deductible. Having positive monthly free cash flow is key. Eradicate high cost debt first, never carry card balances
-Start the compounding as early as feasible...apparently it's the 8th wonder of the world
-Live within your means...debt for luxuries is a bad idea that you will regret years later
-Track your investment growth and adjust to stay on plan. Risk is easier to absorb when young, much tougher as retirement nears.
-Engage competent experts in executing your financial plan. My guy introduced me to something called Nvidia (no clue what they did) back when my ACB was $82
-Do your own research on what you are investing in...make sure you understand the risks and rewards available for every dollar.
-Max out RRSPs, TFSAs and RESPs...tax implications are worthwhile.

You are on a good track to be thinking about retirement now...many dust this off in their 50s and they are challenged to salt away enough to retire comfortably
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  #115  
Old 03-08-2024, 10:48 PM
roper1 roper1 is offline
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Awesome thread!! I will say we paid ourselves first. There was the occasional very lean month where we went very short. Trips, holidays were dang close to home or to see distant family. But we always kept paying the investments. Roping money & riding colts we were fortunate to save most of it.

Made big RRSP contributions, then split the tax refund 3 ways; reinvest a 1/3, blow a 1/3, pay off some small debt with a 1/3. When TFSA came along, used the tax refund to maximize that.

Was so very, very lucky to start early, and see just enough growth early on to stick with it. Should be taught every year of school starting in Grade 7.
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  #116  
Old 03-09-2024, 08:32 AM
Scott h Scott h is offline
 
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Originally Posted by roper1 View Post
Awesome thread!! I will say we paid ourselves first. There was the occasional very lean month where we went very short. Trips, holidays were dang close to home or to see distant family. But we always kept paying the investments. Roping money & riding colts we were fortunate to save most of it.

Made big RRSP contributions, then split the tax refund 3 ways; reinvest a 1/3, blow a 1/3, pay off some small debt with a 1/3. When TFSA came along, used the tax refund to maximize that.

Was so very, very lucky to start early, and see just enough growth early on to stick with it. Should be taught every year of school starting in Grade 7.
I've never understood why this has never been a subject in school; there'd really be no better way to show the necessity of math skills in real life to kids who say "why do I need to know that"? I'd bet some pretty large $$$ that if more kids understood just the the basics of finances everyone would be in much better shape. How many people piddle away the years, and then finally start to wake up in mid/late life, and kick themselves for the mistakes they've made, and the time they've lost?
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  #117  
Old 03-09-2024, 08:50 AM
Desert Eagle Desert Eagle is offline
 
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Not to derail, but as part of the planning process I am wondering what the best balance is between TFSA, RRSP and general savings. I don’t want to get into the huge tax game down the road when I am retired, so I want to understand from those that have been there what has worked for you.

Currently I am not a huge proponent of the RRSP, we do utilize it some, but also have a split of unregistered investments.
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  #118  
Old 03-09-2024, 09:27 AM
Scott h Scott h is offline
 
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Quote:
Originally Posted by Desert Eagle View Post
Not to derail, but as part of the planning process I am wondering what the best balance is between TFSA, RRSP and general savings. I don’t want to get into the huge tax game down the road when I am retired, so I want to understand from those that have been there what has worked for you.

Currently I am not a huge proponent of the RRSP, we do utilize it some, but also have a split of unregistered investments.
I always maxed out TFSA and RRSP prior to my other investments. The many years of tax sheltered growth, and lower tax bill in the year of investment off sets any perceived negatives of taxing RRSP funds when they are withdrawn.
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Old 03-09-2024, 09:37 AM
DRhunter DRhunter is offline
 
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Lots of great ideas and I agree that it is best to start as early as possible and watch it grow. I am just recently 40 and for years thinking that my net worth would never grow then all of a sudden you wake up one day and recognize that the “experts” were right about starting early!

It does seem the majority of conversation is around RRSP, TFSA and stocks etc. and while I do not disagree that these are great options, in my opinion (and personal experience) real estate out performed my liquid investments probably a hundred fold over the last decade. Hindsight is always 20/20, but if I would have taken all the money I put into RRSP and TFSA and utilized in sound rental properties, I could probably retire today. As it were, at least with the rental properties I do have, has probably reduced my expected retirement by 10 years.

Just something to consider in your investment mix. One thing to keep in mind though, just like stocks, there are winners and big losers when it comes to real estate.

DR


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  #120  
Old 03-09-2024, 09:46 AM
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Big Sky Big Sky is offline
 
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I usually stay out of these, but Desert Eagle's post requires a bit of a response.

IMO, people tend to focus too much on putting the money in and not enough on getting the money out. Google something like ' is it possible to put too much money into an RRSP?' There have been comments on this forum from people whose parents died with a large RRIF and the estate had a huge tax bill. Other people say that they don't care about that stuff because they will be dead.

TFSA's are great if you can keep your mitts off of the money. One of the good things about RRSP's is that the clawback prevents people from withdrawing funds. IMO, it's important to have both.

There are so many things in life to save for, especially when you are starting out; retirement, emergency fund for repairs etc, saving for vehicles (as opposed to making payments), lump sum payments on a mortgage, etc etc. And, it's still important to be able to have a bit of fun.
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