The wait.

When I was twentysomething, before there was Google, proper underwear or safe food and LBJ was napalming jungles, nobody my age trusted the government. Politicians started wars, rewarded cronies, were remote and unaccountable. They deserved to be protested against. So we did. I was even in a riot once. Thrilling.

Today the kids seem to loathe Boomers, corps, business owners and wealthy people, especially any with two houses. They applaud higher taxes (on others) and focus on issues like gender equity, sexual harassment and climate change. Apparently there’s nothing worth marching about, anymore. Besides, it’s easier to crowdfund.

In short, we saw government as the problem. Imposing and taking. The moisters see it as the solution. The leveler, equalizing.

This brings us, oddly, to pensions. Much discussion here yesterday about whether or not it’s smart to take your CPP when first offered (age 60) or to wait five or ten years when the stipend is larger. Boomers may be facing that decision daily now, but the moisters are the ones who will truly frame the next retirement crisis. If the kids think they have it tough now, just wait four decades. It’ll be brutal.

One reason young voters fawn over T2 (besides the weed & tats) is a belief the government will actually take care of them when they age and quit work. No surprise. It’s exactly what the feds have led their Millennial base to think. This is a core issue, since the current cost of real estate is decimating young finances. Almost their entire net worth and virtually all monthly cash flow is being concentrated in a single, inflated asset by millions of people just entering careers. TFSA contributions are piteous (93% have not maxed) and RRSPs aren’t faring any better.

Meanwhile corporate pensions continue to shrivel, turned into crappy little group RRSPs run by insurance company dweebs who shovel them into their own mutual funds. If you’re under 40 and not a public servant, chances are your retirement plan is hope.

“We have come to a conclusion that we are going to improve the retirement security of Canadians,” money minister Bill Morneau said last summer when a gaggle of provinces agreed to reform. “We’re going to improve the Canada Pension Plan that will make a real difference in future Canadians’ situations.”

“A real difference.” So what does this mean?

The average CPP payment today is $653, and the max allowable is $1,114, which you receive after contributing for four decades. To get it you pay about 5% of your wages into the pot. Starting in 2019, everyone will have bigger premiums in return for eventually higher benefits – about $4,400 per year extra (that’s the maximum – the average will be much lower). The new premium system will be fully in place by 2025 but benefits will flow much later.

To garner the extra four grand a year, a person will have to work and contribute for 40 years, which means the enhanced payments will start flowing routinely in 2065. Thus the first generation to benefit will be today’s teenagers. Not the Millennials, the GenXers or anyone else now devoting their complete financial resources to a house.

So, obviously, government, politicians or the public pension plan are not the solution. It may sound cruel, but anyone for whom the CPP (plus the taxable OAS pogey) is a major pillar of retirement income, has failed financially. This was never intended to be more than a supplement to a work pension and private savings – an enhancement to keep people out of poverty, not to finance a middle-class lifestyle. The sooner we all understand this, end the house lust and start sticking dough away for the 25 or 30 years after employment, the better.

In this context the early-CPP debate is silly. If you really need to sweat about getting $650 a month now as opposed to $850 five years into the future, you’re in lousy financial shape or already starting to lose your marbles. Having said that, everybody should collect at sixty. Once again, I will tell you why…

  • Any time the government gives you money, take it. Handing over pensions five years before most people think of retiring, when they are still employed, is idiocy. This could, and probably will, be changed on a whim in the future.
  • But what about the 30% more if you wait five years? If you absolutely know you’ll live to 95, think about it. But for most folks it makes more sense to collect the largesse as soon as possible, and invest it. Sixty monthly payments of $600 from age 60 to 65, for example, equals $36,000. That amount invested for a decent return becomes almost $60,000 in ten years, tax-free if inside your TFSA – turning out enough income to increase your OAS by 50%. That sure beats waiting to get an extra $150 a month.
  • Delaying until 65 or 70 to get more CPP income might also edge you into a higher tax bracket if you’re drawing from RRSPs. That would pretty much wipe out any benefit. Remember that during the year you turn 71 all RRSPs must be converted into RRIFs, meaning you’re forced to start taking the capital as taxable income. Why not bank your pension cheque for 11 years before that happens? Put the loot into a TFSA and when it comes out, no impact on your tax bracket.
  • You can split your CPP payments with your spouse, reducing the tax bite.
  • Do you think you’ll have more fun with your  monthly cheque when you’re 76 as opposed to 60? Seriously?
  • You’ve contributed to this plan your entire working life, thus it makes sense to suck out cash the moment you have a chance. That way you’ll drain more from the plan than you ever contributed, which is excellent revenge for being, like, really old.

Some things don’t change, moisters. Never trust the man.

209 comments ↓

#1 Susan M on 10.30.17 at 6:30 pm

Damn, I ♡ this blog.

(And hey, Listen up Dudes!, especially today and yesterday’s posts).

#2 Ian on 10.30.17 at 6:31 pm

Take it take it take it!!! The sooner the better!!

#3 active on 10.30.17 at 6:31 pm

taking CPP early, investing it, if by chance you suddenly pass away, more assets go to your estate than if you had not taken CPP early.

#4 Goldie on 10.30.17 at 6:33 pm

Now they riot when a conservative speaker is invited to speak at their campus :/ …

#5 None on 10.30.17 at 6:34 pm

“…focus on issues like gender equity, sexual harassment and climate change. Apparently there’s nothing worth marching about, anymore.”

Coming from an overly privileged (by birth, not by anything you ACTUALLY did yourself) man this is nauseating.

Happy to compare resumes. – Garth

#6 Andrewski on 10.30.17 at 6:35 pm

“Chances are your retirement plan is hope”… Love it!

#7 Ian on 10.30.17 at 6:35 pm

This country needs to get rid of the ultra loser / jealous / success is bad mentality. I won’t make it generational as I’ve already said to lump everyone in an age group into one mentality is ridiculous. But honest to heavens this place needs to seriously wake up. The US is going to destroy us once this tax package passes. Time to get back to supporting what matters: entrepreneurship, job creation, and low taxes.

#8 Cto on 10.30.17 at 6:36 pm

Garth,
how come no talk about real estate anymore.?
What’s your opinion? Is it just a waiting game now?
Some people in my neck of the woods I think the correction is over and we’re back on upward momentum again.
What lies in store for us for the new year this spring.?

#9 Blessed Canadian Millenial on 10.30.17 at 6:36 pm

CPP seems to me like a big ponzi scheme.

I contribute for 40+ years and get, what, an average of 4% return every year with no principle that goes to my heirs upon death?

Bad deal.

#10 DeFrauded on 10.30.17 at 6:37 pm

Thanks Garth! I’ve been encouraging others to collect now while there is still some CPP to collect. ( funding may not be the issue, but poloitics might ) This small amount covers a small mortgage which was made necessary by my former financial planner who is now resting comfortably in Milton after being convicted of fraud. Life goes on…

#11 Dups on 10.30.17 at 6:37 pm

The finance minister is selling at the top and getting out before he is done as a minister.
http://nanaimonewsnow.com/article/555987/sale-shares-not-admission-conflict-interest-says-morneau

#12 DeFrauded on 10.30.17 at 6:40 pm

Poloitics=politics

#13 akashic record on 10.30.17 at 6:42 pm

Once again: is it really a monthly $600 that one can invest clear if it is collected on top of salary or other income taxed at medium or high marginal rate?

#14 Yo Man on 10.30.17 at 6:45 pm

Boo!

#15 Life is Swell on 10.30.17 at 6:46 pm

Pensions for all courtesy of Bill Morneau. Invest with Morneau Shepell today and you’ll have a great future! Bring on 60!

#16 I don't get it on 10.30.17 at 6:47 pm

Prudent advice Garth, but I plan on waiting until 70. Will retire at 50. Then draw down my entire RRSP between the ages of 50 and 70 and live the good life. Then only tfsa income and all the government benefits I am eligible for. It will finally be my turn to collect.

#17 Stone on 10.30.17 at 6:47 pm

Great post today Garth. I really enjoyed it. You’ve really got the creative juices going every day – today was just better (I still like the blog post about prefs last week best though).

What really stood out was the following line:

“If you’re under 40 and not a public servant, chances are your retirement plan is hope.”

It’s so funny but sadly, it’s also so true. I think that’s why it’s so funny. Everyone knows they need to save for the rainy day (week, month, years, forevermore) and yet some irresistible force from the ether apparently compels almost everyone to remain lethargic on the subject.

I learned early on from my Momma that the only one who’s going to take care of you, is you! That never left me.

And yet, people easily go out and burn tons of coin on lottery tickets. All I can do is shake my head.

Well, my portfolio is sitting at 8.12% today. Dividend will de deposited Nov 6th. Should I buy lotto tickets with that? Of course not! That would be a crime against humanity (and the dividend gods – praise their benevolent goodness). LOL

Thankfully, I don’t fall into the 40 or less category. My retirement plan’s name isn’t hope either. At just inches of seven figures, I’d rather call it the gold plated meal ticket. Yay!

#18 Rental property math on 10.30.17 at 6:47 pm

Weed stock up 19% today. What do you think Garth?
When’s the last time you had a puff?

#19 NOTHING SURPRISES on 10.30.17 at 6:48 pm

DELETED

#20 Jungle on 10.30.17 at 6:49 pm

What about waiting until 71 to withdraw RSP? Should those with large RSP try and “wind down” years before to avoid big tax bite?

#21 BobC on 10.30.17 at 6:50 pm

Best yet.

#22 paracho on 10.30.17 at 6:54 pm

More great tax saving advice.
I maxed my TFSA and RRSP most years and now see how the TFSA in many ways is superior .

Sharing this on social media !

#23 I don't get it on 10.30.17 at 6:58 pm

#3 Jungle, that was my point exactly. Instead of a $10 million rrsp at age 70 which guarantees a massive tax bill every year until I die, I will wind down a $3 million rrsp two decades earlier and enjoy early retirement. My ocd loves the simplicity of OAS and CPP and paying no taxes when I’m sitting around watching tv in my 70s and 80s.

#24 just a dude on 10.30.17 at 7:01 pm

Garth,

Great post. Agreed on all points. Generally speaking I’ve never trusted government to do what’s best for the people they were elected to serve. I think most politicians likely start with great intentions but the power eventually tarnishes their character & integrity, at least to some degree (with the exception of Hon. Turner of course).

My philosophy has always been to be responsible for myself and my loved ones first, and to then help out my fellow citizens in need when circumstances permit. I’ve been very fortunate in my 50 years on this precious earth and I’m grateful to be able to say that I’ve donated cash/food and/or volunteered my time to extremely worthwhile charities and people during the last 34 of these 50 years.

Born in Canada of immigrants who came to this great country seeking a better life for themselves and their kids, I was taught to not be beholden to anyone or anything, and to take care of myself & not burden others. I was also taught that it was OK to accept help that was offered on those rare occasions in life when you were thrown a monumental curve ball. Once you were back on a solid footing however the expectation was to return the service to fellow humans in need.

It would be wonderful if everyone carried out their lives and their affairs in the honourable ways taught to me by my hard-working parents of incredible courage and integrity. Fortunately, life has shown me that a great many do.

#25 Alberta Ed on 10.30.17 at 7:03 pm

Any time you can get money (back) from government, take it and run. I stopped trusting government with my future when LBJ tried to get me killed.

#26 Single MGTOW on 10.30.17 at 7:08 pm

I’m waiting until the Statute of Limitations is passed for my credit card & line of credit debt that I owe to Bank of Montreal (BeeEmMo). I told their collection agency today to shove that debt…..

Mark Silverthorn told me that large creditors only sue if they know the debtor owns an asset like a car or real estate.

He also advised me that even if I was sued in court, it doesn’t guarantee that BMO will recoup a penny from me.

He also told me that I should save my TFSA at a financial institution in Quebec or New Brunswick.

Mr. Silverthorn also assured me that if I open a TFSA or savings account in another city, I am technically immune from garnishment because a 1982 ruling set a law that the creditor needs to locate the SPECIFIC bank branch that the debtor is a client.

I am not dating a woman from Toronto ever again.

#27 rosholt on 10.30.17 at 7:09 pm

If one isn’t planning on spending the “early” 60 y.o. CPP payments, why not roll the dice and wait a couple years. It’s easy to scare everyone into saying “you may die early and not get anything” but the facts are that if you live to 65, odds are you’ll be around at 80.

I’d rather just gamble a bit and wait past 60 to take CPP.

#28 Fred from Kitchener on 10.30.17 at 7:11 pm

What if I decide to retire early, say 55 or 60. Would it not make sense to cash in my RRSP’s and pay the tax while my income is relatively low, thereby lowering my taxes. Then when I reach 65 or 70 I can begin collecting my CPP which will be larger, the longer I wait. This strategy will minimize taxes and I won’t be stuck with a huge tax on my RRSP when I die. What do you think?

#29 Fred from Kitchener on 10.30.17 at 7:13 pm

https://www.theglobeandmail.com/globe-investor/retirement/retire-planning/how-deferring-cpp-until-age-70-pays-off-for-retirees/article34209897/

#30 paul on 10.30.17 at 7:14 pm

#18 Rental property math on 10.30.17 at 6:47 pm

Weed stock up 19% today. What do you think Garth?
When’s the last time you had a puff?
——————————————————————–
Must have been awhile for you, a Puff. lol

#31 Hana on 10.30.17 at 7:14 pm

I understand benefits of taking CPP early except if I am still employed until 65 in which case it would be taxed at the top. What am I missing here?

#32 LivinLarge on 10.30.17 at 7:21 pm

I knew today would have focus on the early CPP and an even broader explanaition of the intention of CPP and OAS in the grand retirment security scheme and it certainly has. Precise and concise…the way we all need it. Well done Fearless Leader, well done.

Now this: “This was never intended to be more than a supplement to a work pension and private savings – an enhancement to keep people out of poverty, not to finance a middle-class lifestyle. ” should be printed out and prominently posted on everyone’s refrigerator in a 20 pt font, no exceptions.

Oh and the observation about the Mills being screwed, blued and tatooed by the housing market sucking out their ability to make any real contribution to their own financial security in retirement is so prescient that maybe every parent of a Mill should sit their darlings down and pound this inconcenient truth into their heads…maybe.

Oh, Akashic, yes you are obviously correct. The early CPP benefit will indeed be taxed at your current marginal rate so the actual net net benefit amount to invest is reduced but that doesn’t have any significant material impact on the philosophy of the “why take it early” discussion, just a numerical variable in quantum of the end benefit of taking it early. That numerical variation is totally controlled by each tax payer’s own marginal rate situation.

#33 crowdedelevatorfartz on 10.30.17 at 7:21 pm

@#181 Penny Henny
“Two dozen octopuses crawled to shore en masse in Wales and no one knows why?
http://nationalpost.com/news/world/two-dozen-octopuses-crawled-to-shore-en-masse-in-wales-and-no-one-knows-why

Probably had something to with crowded elevator fartz guy
+++++++
In my defense.
I havent swam in the Atlantic for at least a month. Mind you that was on the East coast of Canada so ….technically……you may be on to something.

Apparently Welsh Octopi orgies are the ultimate in gender confusion.
Hermaphodites could learn a thing…. or two(pun intended) from an eight appendaged, gender confused, welsh octopus with dementia ……..

https://www.google.ca/url?url=https://funfactz.com/animal-facts/octopus-dementia/&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwjay-PwvZnXAhUR8WMKHRTvDpQQFggnMAM&usg=AOvVaw28U0iQfsgm8AgoNdpLSg52

#34 TheDood on 10.30.17 at 7:24 pm

#8 Cto on 10.30.17 at 6:36 pm

I would sit on the sidelines for now.

Revisit the whole RE mess in about a year.

Give the mortgage stress test several months to manifest. Give the many who bought over their heads near peak to start springing financial leaks – this is already happening.

I’m no swami, but I believe you will see significant price reductions in real estate (particularly in YVR and GTA) starting in 2018 going forward for a few years. There is just too much household debt across the whole country. Something has to give eventually.

#35 crowdedelevatorfartz on 10.30.17 at 7:24 pm

@#18 Rental Property math
“Weed stock up 19% today. What do you think Garth?
When’s the last time you had a puff?”
*********

Every time he edits this blog……..

#36 The Limited Sage on 10.30.17 at 7:37 pm

The single worst thing T2 has pushed through so far in his hapless two years as Prime Minister is rolling back OAS from 67 to 65. This is going to cripple the system even more than it already is.

Future retirement initiatives need to factor in that Canadians are living longer and thus should have to work longer to put in if they expect to get anything out.

Retiring at 60 made sense in a world where you’d live until about 70 and your widow was about five years or so behind you. The fact that we’re living longer – think into our 80s and 90s, with even a high percentage than ever now possibly reaching 100 – this needs to change.

There’s zero logic in working for 30 to 35 years and then expecting to live “retired” off the government for another 30+ years. Once our country comes to this realization, then perhaps we can all plan our retirements more efficiently. The only exception to this rule is if you’ve managed to save, invest and live within your means – which blogs like Garth and MMM preach.

I’m 28 and recognize the world is changing and I’m preparing to be employed until I’m in my 70s. It’s daunting, but it is what it is. Diversify your traits and skill sets and you’ll never be without a job. Thankfully I’m in a career that fulfills me with lots of growth and moving potential.

Prepare for the future so at least you’ll have one.

#37 Murphy on 10.30.17 at 7:40 pm

Epitaph for Bill Morneau

Here lies Bill Morneau
Should have disclosed more info
According to PM J. Trudeau
Tough swallowing that disclosure pill
Bonjour and Neau Mor Bill

#38 akashic record on 10.30.17 at 7:41 pm

#32 LivinLarge

The early CPP benefit will indeed be taxed at your current marginal rate so the actual net net benefit amount to invest is reduced but that doesn’t have any significant material impact on the philosophy of the “why take it early” discussion, just a numerical variable in quantum of the end benefit of taking it early.

Beautiful sentence.

#39 Sam the Sham on 10.30.17 at 7:49 pm

—Today the kids seem to loathe Boomers, corps, business owners and wealthy people—

We should go easy on the Social Justice Warrior Millennials, this is a very frighting time for them. They might run into a little girl dressed as Pocahontas for Halloween. Oh the horror!!

#40 TurnerNation on 10.30.17 at 7:49 pm

Oops they [Boomers] did it again – a repeat of 1990 with houses cratering and TSX rocking?

Went shopping today on overseas ETFs too: Russia, India, Brazil. Short term trade…

M41ON

#41 Nonplused on 10.30.17 at 7:49 pm

The idea that moisters and millennials could believe that there will still be a Canadian government there to pay CPP by the time they retire is dubious at best. GenX never believed it and we are only 10 years away. I still don’t think in 10 years it’ll be there. Maybe for some people, but not if you have any other money besides that. And the amount is already a pittance, inflation has already destroyed any value therein unless you are really poor.

All we need to do is look at Illinois to figure out what CPP will be around in ten years. They may still pay out some amount, but it won’t keep you in cat food for the month.

#42 Bitcoinnaire on 10.30.17 at 7:59 pm

A purchase today of at least ONE Bitcoin today, will ensure a financial reserve of several hundred thousand to a million dollars in the near future.

21 million supply, growing acceptance, even Boomer funds pouring money into these assets = you do the math.

Cheap insurance.

#43 Whipster on 10.30.17 at 8:00 pm

For those about to flop… and others interested I guess ;-)

Here are two that may just come out a bit ahead or even. Likely to sell below what they paid in all honesty (but who the heck knows anymore…) :

5389 45 avenue delta bc
Bought in may 2016 for 975 K; assessed in 2016 at874,900
listed now for 1.098 million (3mos on market).

4552 47a street delta bc
Bought April 2016 for 894,500k
Listed now for 968,888k (2 weeks)

I enjoy reviewing listings, it keeps me grounded in a weird way. knowing that prices are indeed lowering and hopeful it will continue to reach more affordable levels. Until then we continue to rent ( insert thumbs up emoticon)

#44 JSS on 10.30.17 at 8:01 pm

The hey days of the baby boomer generation is slowly coming to an end. All that remains is death.
The future is for the Millenials.

And then they die. Or is there an app for that? – Garth

#45 Rudygq on 10.30.17 at 8:01 pm

CPP is a horrible deal to anyone who is financially literate. Imagine contributing to an investment pool for 30,40,50 years and not being able to take out whatever lump sum you choose (of your money) should an emergency come up. Also if you die your estate does get access to the full remaining principal. Most financially literate people could beat the returns of the CPP consistently—as “A Fat Wallet is the Enemy of High Investment Returns” [Warren Buffet]. This last quote means people with smaller portfolios than the federal government have more opportunities for higher returns without considerable increase in risk.. A 1-2% increase in returns could translate into $200,000+ extra by retirement.
In short take the money as soon as you can get it because the biggest reason for doing so is RISK. Risk of government policies changing and Risk of you dying before you get to enjoy it.
Has there been any movement for citizens to opt out of the CPP and use the money to fund their own personal pension?

#46 SCD on 10.30.17 at 8:03 pm

Garth- That is useful advice. I think I will take it. Thanks!

#47 april on 10.30.17 at 8:05 pm

# 16 – How does anyone know how long their going to live. You could die anytime between 50 and 70.

#48 Tell it like it is, man on 10.30.17 at 8:05 pm

“plus the taxable OAS pogey”

The OAS benefit is taxable but the tax is completely offset by the age amount tax credit IF you have a net income of less than $36k. With $13.6k in personal credits at age 60 and two average CPPs of $7k each, a couple could split a pension of $85k and both receive full OAS “tax free” at age 65. Garth may have forgotten the limited means of the little people who camp here.

#49 Steve Bridge on 10.30.17 at 8:10 pm

Sorry, but I have to disagree with taking CPP early.

In most cases, it’s much better to wait until 70 to start collecting CPP payments. Where else can you get an 8.4% guaranteed annual return plus inflation indexing? You can manage my money for me if you know one.

Draw down your RRSPs first while you’re in a lower tax bracket,

Leaving the money in your RRSP and withdrawing it starting at 72 (as a RRIF)? All you’re doing is creating more taxable income later for yourself. Taking it out early means at worst, you invest in a non-registered account and only pay 50% capital gains tax, can also take advantage of the dividend tax credit or put the money into a TFSA. Leave it in the RRSP until later = larger tax bill when the money comes out. And god forbid if you die with a large RRSP; now you’re looking at some serious tax.

Do you have health/genetic issues that lead you to believe you’ll die young? Then yes, take CPP early.
If you haven’t done any saving or planning and need the money at 60, then yes, take it, although if you need the money that badly, collecting CPP will interfere with GIS eligibility, as CPP will count as income.

Another consideration is that most investment advisors (not Garth, of course) love when you leave assets in your RRSP as they get to collect trailing commissions longer.

#50 YVR on 10.30.17 at 8:11 pm

OAS and CPP will be there. And GIS will increase rapidly. Will be enough to have a decent retirement life on.

The retirees and soon to be retirees will be over 40% of the electorate.

Simple math.

Financial impossibility. Simple math. — Garth

#51 crowdedelevatorfartz on 10.30.17 at 8:12 pm

@#42 JSS
“The hey days …..”
+++++

HEY !
You lost me at “hey days”….. you meant heydays yes?

https://www.google.ca/url?url=https://www.merriam-webster.com/dictionary/heyday&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwig79SJyZnXAhVJ7GMKHflzCNwQFggcMAI&usg=AOvVaw3h83yIYaeH9l0mxFgjwPmy

Enough educating you young , bitter moisters…

P.S. JSS
enjoy paying my pension….while yours drifts towards bankruptcy……………

#52 GovernmentShill on 10.30.17 at 8:13 pm

On the subject of taking $$ from the government early, does it make sense for federal employees to retire as soon as they can without penalty as well? When I turn 55, I will have accumulated 32 years of employment as a civil servant, giving me 64% of my top 5 highest consecutive years in pension. Should I retire on the spot or wait until I max out at 58 to get 70% instead?

Who cares? We hate you. — Garth

#53 Ben Johnson on 10.30.17 at 8:22 pm

I was wondering about the advice to draw your CPP ASAP yesterday Garth. You seem to be pretty dismissive about some concerns or questions regarding your advice. For this reason alone you’re company will never touch my savings. You’re not infallible, you gave some advice many had never heard before, questions should be expected.

I digress, assuming I live to 85 years old, and using your numbers (650 and 850 a month) I would get an extra 9 grand by waiting to take my money out until I’m 65. People can make an individual decision if that extra 9 grand is worth waiting 6 years for. I think I agree with you, I’m more likely to enjoy the extra income between 60 and 65, but hey, maybe the extra 200/month makes a difference when you’re 82. For a lot of people it does, and there’s no reason to look down on them if it does.

#54 gfd on 10.30.17 at 8:23 pm

Bad weather, bad deeds (http://nanaimonewsnow.com/article/555987/sale-shares-not-admission-conflict-interest-says-morneau) and today subject is trully depressing.

#55 Stone on 10.30.17 at 8:24 pm

#52 GovernmentShill on 10.30.17 at 8:13 pm
On the subject of taking $$ from the government early, does it make sense for federal employees to retire as soon as they can without penalty as well? When I turn 55, I will have accumulated 32 years of employment as a civil servant, giving me 64% of my top 5 highest consecutive years in pension. Should I retire on the spot or wait until I max out at 58 to get 70% instead?

Who cares? We hate you. — Garth

——

Oh lordy! I’m laughing so hard I think I’m going to wet myself. Am I ever thankful I found this blog just for the sheer comic relief, let alone the financial advice. If this keeps up, I need to go and buy some thirsty underwear.

#56 gfd on 10.30.17 at 8:28 pm

Pasalis on BNN
http://www.bnn.ca/new-mortgage-rules-expected-to-heat-up-toronto-housing-before-winter-chill-1.900562

#57 Greg on 10.30.17 at 8:29 pm

Gotta appreciate your optimism Garth, preaching fiscal responsibility to us debt piglets. I don’t think you’re getting through tho.

#58 Arctic Gringo: Qalunaaq on 10.30.17 at 8:29 pm

Nunavut 2017 General Elections TONIGHT!!!

Follow here: https://www.elections.nu.ca/en/election/2017-general-election

Or here: http://newsinteractives.cbc.ca/nuvotes2017/

Speaking of CPP and retirement – Jack Anawak remains in politics, Garth. The guy doesn’t quit, for good or, er, bad. Watch out for him in the constituency of Aivilik.

#59 Mean Gene on 10.30.17 at 8:29 pm

Max it out, I intend to, don’t look a gift horse in the mouth.

#52 GovernmentShill on 10.30.17 at 8:13 pm
On the subject of taking $$ from the government early, does it make sense for federal employees to retire as soon as they can….

#60 crowdedelevatorfartz on 10.30.17 at 8:30 pm

@#52 GovernmentShill

“Who cares? We hate you. — Garth”
****

Ladies and Gentlemen.
Beer just came out my nose…………

#61 FOUR FINGERS WATSON on 10.30.17 at 8:31 pm

#50 YVR on 10.30.17 at 8:11 pm
OAS and CPP will be there. And GIS will increase rapidly. Will be enough to have a decent retirement life on.

The retirees and soon to be retirees will be over 40% of the electorate.

Simple math.

Financial impossibility. Simple math. — Garth
………………………………..

Wrong again Garth. We will continue voting for Justine, he will take yours and give it to us. No problemo.

#62 Long-Time Lurker on 10.30.17 at 8:31 pm

Historic:

The Biggest Stock Collapse in World History Has No End in Sight

By Kana Nishizawa and Aibing Guo

October 29, 2017, 9:00 AM PDT October 30, 2017, 5:19 AM PDT

PetroChina, the first $1 trillion company, has sunk since 2007

The oil producer reported third-quarter earnings on Monday

It’s going to take more than the biggest stock slump in world history to convince analysts that PetroChina Co. has finally hit bottom.

Ten years after PetroChina peaked on its first day of trading in Shanghai, the state-owned energy producer has lost about $800 billion of market value — a sum large enough to buy every listed company in Italy, or circle the Earth 31 times with $100 bills.

In current dollar terms, it’s the world’s biggest-ever wipeout of shareholder wealth. And it may only get worse. If the average analyst estimate compiled by Bloomberg proves right, PetroChina’s Shanghai shares will sink 16 percent to an all-time low in the next 12 months.

https://www.bloomberg.com/news/articles/2017-10-29/the-biggest-stock-collapse-in-world-history-has-no-end-in-sight

#63 Stone on 10.30.17 at 8:32 pm

#42 Bitcoinnaire on 10.30.17 at 7:59 pm
A purchase today of at least ONE Bitcoin today, will ensure a financial reserve of several hundred thousand to a million dollars in the near future.

21 million supply, growing acceptance, even Boomer funds pouring money into these assets = you do the math.

Cheap insurance.

——

What??? Boomers are buying Bitcoin?

RUN! THE! OTHER! WAY!

Yup, I’m on my to buy those thirsty underwear right now. It’s currently a 100% certainty I’m going to need them. LOL

#64 Smoking Man on 10.30.17 at 8:32 pm

Great post tonight Garth.

Yeah when we were kids we hated the govt. Or the Mad.

Not this generation of teacher mind twisted twits
The are celebrity worshipers. Look how they worship T2 and Wynne. What do they both have incomon. They are teachers who speak in teacher talk. Hypnosis is what I call it.

These kids have no chance. Individualism is where success lies. Not the community of communism.

#65 will on 10.30.17 at 8:44 pm

So you take it at 60 and continue working until 65. Are you still making cpp contributions until you are 65? If so how does that affect the numbers?

#66 For those about to flop... on 10.30.17 at 8:45 pm

00 pm
For those about to flop… and others interested I guess ;-)

Here are two that may just come out a bit ahead or even. Likely to sell below what they paid in all honesty (but who the heck knows anymore…) :

5389 45 avenue delta bc
Bought in may 2016 for 975 K; assessed in 2016 at874,900
listed now for 1.098 million (3mos on market).

4552 47a street delta bc
Bought April 2016 for 894,500k
Listed now for 968,888k (2 weeks)

I enjoy reviewing listings, it keeps me grounded in a weird way. knowing that prices are indeed lowering and hopeful it will continue to reach more affordable levels. Until then we continue to rent ( insert thumbs up emoticon)

////////////////////

Hey Whip,nice work.

If you keep going like this I am going to be able to pull the pin soon and retire in Fiji.

You sound like you thought they were too high but they are good finds.

I have mentioned before,below 10% in higher asking price goes into the main Pink Snow folder.

10-20% with a low assessment or a dated building I usually put in in my Possible Pinkies Folder and although you normally see them drift down it saves me the time of finding them again.

For the record,I have had Possible Pinkies become CONFIRMED PINK SNOW and take a loss ,at this stage of the cycle usually just part of the expenses and not some of my heavy hitters.

I have lots of speculators in the 4/5 million bracket that could take a decent hit but they are hanging on for who knows how long.

If you have the cash, nobody has their house on the market for the same price they paid for it unless they like the smell of fresh dog shit being walked into their house.

I am toying with the idea of doing a Flopper Top Ten with the ten biggest losses of 2016 around the new year.

Everything might seem cool on the surface but as it stands right now we would need miracle after miracle after miracle for everyone to walk away o.k and if it is happening now when things appear to be business as usual then you know when things go to the next level then you better hang onto your hamster…

M43BC

#67 akashic record on 10.30.17 at 8:48 pm

In short, we saw government as the problem. Imposing and taking. The moisters see it as the solution. The leveler, equalizing.

I think moisters see both “corps, business owners and wealthy people” and governments as a problem.

They know that wealth has not trickled down anywhere close how it concentrated.

Moisters never even had the promise that “our asset is our people”.

“Corps., businesses” are seen now worst than governments, they are raw powers.

Moisters don’t feel they have any influence over corps, whether it is phone bills from telecom cartels or Twitter, Google, Facebook that can censure, ban political views pretty high up on the totem pole.

Governments at least still call elections, they need to make promises and pretend to listen. Even if politicians play moisters like a violin for votes to get them rally around gender equity, sexual harassment and climate change.

Moisters may believe that they can influence more successfully governments to get higher minimum wage in return for their vote than free market can force corps.

Especially because the same governments give plenty of cheap labor supply through immigration and TFW programs to corps in return of corp donations for politicians and parties.

Moisters are onto something believing that governments are actually the brokers, “levelers”, “equalizers” because the “free market” as you knew it when you were protesting against the government does not function the same way, moisters can’t rely on it as previous generations could.

#68 meslippery on 10.30.17 at 9:10 pm

#31 Hana on 10.30.17 at 7:14 pm

I understand benefits of taking CPP early except if I am still employed until 65 in which case it would be taxed at the top. What am I missing here?
—————-
Lets see if Iam paying attention.
If your still working CPP all goes into RRSP Tax refund as a result goes into TFSA.

#69 Smoking Man on 10.30.17 at 9:15 pm

I finally figured out why the moisters are so messed up.

Never been spanked.

My Grandma bless her soul, she had this wooden klog, The second you screw up and start running, you know she’s reaching down, you could be fifty feet away and she could nail you in the back of the head.

You use a swear word, you’re tied up to the basement pole and she got the pepper out, and emptied it on your toug.

You never swore again till after she died.

All youth want to fight, it’s natural, but the shit they are fighting for, their own self-destruction.

I hate Teachers and Globalists for this.

Economic Nationalism is what they should fight for. But no, white shaming and Identity politics is the just cause today.

They need a long overdo spank and I ain’t going to do it, I’m conservative and we don’t believe in violence, keystrokes is how I fight. Any takers?

Dr. Smoking Man
Ph.D. Herdonomics.

#70 TnT on 10.30.17 at 9:16 pm

#64 Smoking Man on 10.30.17 at 8:32 pm

Yeah when we were kids we hated the govt. Or the Mad.

Not this generation of teacher mind twisted twits

My history says the kids loved John and Robert Kennedy + Pierre Trudeau… their message of was geared towards the up and coming majority (we call them Boomers now).

I am certain it’s more about who the Gov. is talking to and right now the Gov. is not talking to the Boomers anymore.

They are talking to the new majority Millennials.

One step ahead….

#71 Victor V on 10.30.17 at 9:16 pm

Single family homes in the 905 are imploding as October stats wrap up. Sales and prices cratering and DOM shooting up, since Spring peak and Y/Y.

Richmond Hill: https://richmond-hill.listing.ca/detached-home-price-history.htm

Markham: https://markham.listing.ca/detached-home-price-history.htm

Vaughan: https://vaughan.listing.ca/detached-home-price-history.htm

Newmarket: https://newmarket.listing.ca/detached-home-price-history.htm

#72 Debtslavecreator on 10.30.17 at 9:17 pm

Moisters for the most part have been brainwashed by academia and their radical left wing public school teachers to believe in socialism
They have been brainwashed and turned into Marxist idiots
We’ve had decades of rapidly growing govt, debt, taxes and intervention via central banks and other govt manipulation attempts and look at what it got us
And many of these highly “educated” young dummies think we need even more govts and intervention
This is the classic cycle of collapse as seen most recently in Venezuela
It’s dangerous and pathetic
CPP is well managed and will payout
But the issue will be buying power. For most I agre take it ASAP and invest it in a TFSA
Let’s help defeat these crazy liberals and other left wing lunatics

#73 akashic record on 10.30.17 at 9:20 pm

#68 meslippery on 10.30.17 at 9:10 pm

#31 Hana on 10.30.17 at 7:14 pm

I understand benefits of taking CPP early except if I am still employed until 65 in which case it would be taxed at the top. What am I missing here?
—————-
Lets see if Iam paying attention.
If your still working CPP all goes into RRSP Tax refund as a result goes into TFSA.

Bingo.

May not work well though with already maxed out RRSPs and TFSAs that you and your souse are supposed to have by 60.

#74 For those about to flop... on 10.30.17 at 9:26 pm

Some idiot wrote…

I am toying with the idea of doing a Flopper Top Ten with the ten biggest losses of 2016 around the new year.

//////////////////////////

Just gave this idea some thought and I guess to try and represent a better picture of the market it might make more sense to do a top 5 dollar amount and a top 5 percentage amount because I remember some condos out in Richmond and I think it was Burnaby losing around 16-17% after expenses and if my old buddy L.S in Arbutus helps me add in opportunity costs I guess we could have so 20% condo losses.

The guys struggling with the luxury condos out Richmond are taking a half million dollar bath even if they get what they paid for it.

I wouldn’t even think about buying a condo in Richmond for 500k let alone put myself in a position to take a 500k hit.

You won’t read about it in the paper though…

M43BC

#75 Pretentious Hipster Bicycles on 10.30.17 at 9:27 pm

That first paragraph scares the bejeezers out of me Gartho.
If thats how the majority of millienials see the world then we are all pooched, and thats coming from a millenial

#76 Lost...but not leased on 10.30.17 at 9:39 pm

Pensions…..”Canada vs USA”…

The elephant in the room is CIVIL SERVICE PENSIONS in Canada….forget CPP etc. in pecking order of priorities

Various U.S. Cities are falling like dominos re: these unfunded liabilities that impact civic budgets.

As the private sector gets pummelled by the real world, more and more people will resent the gov’t employee contracts being signed on their behalf.

Methinks our Canadian politicians quiver in mortal fear of going near what will become an inevitable and unavoidable showdown.

#77 Bottoms_Up on 10.30.17 at 9:43 pm

When houses cost $500k, wages are $50k, insurance and taxes high most people are guaranteed financial failures, the day they are born.

#78 Lost...but not leased on 10.30.17 at 9:45 pm

More dominos falling..

HBC is contemplating selling its downtown Vancouver store
…..est. price $900 million

#79 Linda on 10.30.17 at 9:48 pm

Regarding taking CPP ‘early’. For anyone who has maxed out their RRSP’s for decades, fully funded their TFSA & is lucky enough to have a work related pension plan, don’t delay your CPP. IF all you have to count on upon retirement is CPP, delay to age 65 to maximize your CPP benefit. Don’t wait until 70 unless you really want to keep working till then & simply can’t make ends meet otherwise. Why? Because unless you have truly stellar longevity running in your genome, you are highly unlikely to benefit in the long run by delaying taking your CPP past age 65. Despite the actuaries & all those lovely news clips about how one should plan upon living to age 90 or 95, the truth (as supported by handy StatsCan numbers as of the 2016 census) is that only 4.5% – that is four and one half percent – of the current Canadian population is age 80 or older. Of that 4%, some 2% fall within the 80-84 age range; 1.5% are in the 85-89 age range & the remaining 1% are age 90 plus. As per StatsCan, 305,700 Canadians altogether, of which 216,000 are female & 89,700 are male. This after decades of medical advances & universal health care.

Don’t bet against that house, people. It is a sucker bet.

#80 Silent the People on 10.30.17 at 9:48 pm

How long do you think the government is going to give the civil service DP plans? This is also coming to an end! The system is broke!

#81 Linda on 10.30.17 at 9:51 pm

And I KNOW the blog dogs will crow over my last number so I’ll clarify it – that 305,700 is just the 1% who are aged 90 plus. The grand total of the age 80 to age 100 plus group is 1,573,300.

#82 John on 10.30.17 at 9:51 pm

Also disagree on taking CPP early. My accountant told me to take it at 60 and had I done so I would have made under 600.00 a month.I am self employed and working past 65.I didn’t take it at 65 either but took it just short of 68 and I continued to pay in past 65 so now I get 1260.00 a month. My wife and I get about $3,300.00 a month CCP and OAS or just under $40,000.00 a year. We don’t have to but you could live on that especially if the house is paid for and no debt and it would be a good life

#83 NoName on 10.30.17 at 9:52 pm

If you keep going like this I am going to be able to pull the pin soon and retire in Fiji.

I’ve never been to Fiji but what pictures are telling me, that island with misspelled name looks almost as good as Croatia.

#84 dakkie on 10.30.17 at 9:53 pm

Gerald Celente – Gold, Silver, US Dollar, Real Estate, Canada’s Economic Growth

http://investmentwatchblog.com/gerald-celente-gold-silver-us-dollar-real-estate-canadas-economic-growth/

Quack. — Garth

#85 NoName on 10.30.17 at 10:02 pm

#60 crowdedelevatorfartz on 10.30.17 at 8:30 pm
@#52 GovernmentShill
“Who cares? We hate you. — Garth”
****
Ladies and Gentlemen.
Beer just came out my nose…………

I hope that was pumpkin beer, today drinking any other would be just wrong.

#86 Smoking Man on 10.30.17 at 10:02 pm

DELETED

#87 Ian on 10.30.17 at 10:07 pm

Tax reform details out Wednesday and new Fed person announced Thursday. Big week!

#88 Smoking Man on 10.30.17 at 10:10 pm

Best song ever.
https://www.youtube.com/watch?v=tAGnKpE4NCI

Best “Nothing Else Matters”

So close no matter how far
Couldn’t be much more from the heart
Forever trusting who we are
And nothing else matters

Never opened myself this way
Life is ours, we live it our way
All these words I don’t just say
And nothing else matters

Trust I seek and I find in you
Every day for us something new
Open mind for a different view
And nothing else matters

Never cared for what they do
Never cared for what they know
But I know

So close no matter how far
Couldn’t be much more from the heart
Forever trusting who we are
And nothing else matters

Never cared for what they do
Never cared for what they know
But I know

I never opened myself this way
Life is ours, we live it our way
All these words I don’t just say
And nothing else matters

Trust I seek and I find in you
Every day for us something new
Open mind for a different view
And nothing else matters

Never cared for what they say
Never cared for games they play
Never cared for what they do
Never cared for what they know
And I know

So close no matter how far
Couldn’t be much more from the heart
Forever trusting who we are
No nothing else matters.

#89 wendi1 on 10.30.17 at 10:10 pm

I am thinking seriously about waiting until 70, too. The reason: no pension. The inflation-protected CPP and OAS are about as close to a pension as I can get.

Also, con men will never be able to take them from me as I reach my dotage.

#90 LMFAO on 10.30.17 at 10:10 pm

‘If you really need to sweat about getting $650 a month now as opposed to $850 five years into the future, you’re in lousy financial shape or already starting to lose your marbles.’

nearly peed !!!!

#91 TnT on 10.30.17 at 10:11 pm

#67 akashic record on 10.30.17 at 8:48 pm

think moisters see both “corps, business owners and wealthy people” and governments as a problem.

It also amuses me how they are completely blind on how easy they are being duped too.

All the Corp. / Gov. has to do these days is scan Social Media for the pulse, pay for Facebook surveys like “Which Friends Star are you” or “What’s your inner animal spirit” and these kids give up all their inner secrets and desires that are then wrapped up in “stuff” / polices and then sold back to them for money or votes.

Billions spent on building the perfect consumer / citizen, I don’t think they ever had a chance….

All their issues are learned behavior and manipulation by a more experienced generation too….

Blame goes full circle in my books…

#92 Chickenlittle on 10.30.17 at 10:11 pm

Garth, retiring at 65 is so passe. Don’t forget about that “Everyman’s dream, barely 30, badger-aggressive, six-figures, killing it in the boy’s club as an equities trader, based in Vancouver ” chick you wrote about (Special, September 20, 2017). No self respecting Millennial would ever want to work for that long a period of time. Anyone who has to is a failure and might as well move to Milton and die in the suburbs.
Just imagine the look on local basket weaver Pai-Han’s face when he hears the harrowing tale of how Andrew Smith, Toronto hipster, worked for 15 years at a non-profit licking envelopes, sold his Leslieville semi for $3 million, and is now travelling the world because he hates all the rich, privileged Boomers who worked at least 40 + years to get all those gobs of cash they now horde.
I’m sure he will tactfully leave out the part where his parents gave him the down payment for his house. He wouldn’t want to make Pai-Han who makes $500 a month for his wife and 4 children feel bad now, would he?

#93 Hamilton on 10.30.17 at 10:14 pm

Hi Garth,

New title for your next book.

I’m Sorry, I was Right!

#94 LivinLarge on 10.30.17 at 10:18 pm

While it is impossible to actually know with any certainty just what anyone doesn’t know based one their connents here but it sure seems like some are still ignorant of the facts here.

That money in the TFSA grows tax free and is taken out tax free in perpetuity…Tax Free. How muchndo you have to earn in taxable income in 5+ years to equal the but you lose in actual CPP benefit? Without any current proposal to eliminate the TFSA program, presume it remains. So, you get that tax free money when YOU want or need it rather than when some other registered program says you must take it and be taxed as if it were interest. For ever. “Go on. Take the money and run”

And unless I am mistaken, your estate gets that residual if you die early.

#95 For those about to flop... on 10.30.17 at 10:20 pm

Conspiracy theory time.

What if the Happy Housing Crash guy was a realtor who was trying to shame all his fellow PREC’s into not communicating and helping out guys like me by calling them scum and shysters.

Pure genius…

M43BC

#96 april on 10.30.17 at 10:26 pm

#74 – We here hope these drops find their way down to the bottom end as those prices seem to keep going up?
Thanks Flop.

#97 For those about to flop... on 10.30.17 at 10:27 pm

pm
If you keep going like this I am going to be able to pull the pin soon and retire in Fiji.

I’ve never been to Fiji but what pictures are telling me, that island with misspelled name looks almost as good as Croatia.

////////////////////

Hey NoName, we can rename it Jifi if you want.

My wife was born there and the family moved here when she was a toddler for a better life.

She has been back a few times ,I have not.

I loved Croatia and yeah that sort of climate and landscape scream retirement country to me.

If you move back I will ask to stay a day or two and hopefully spend the next decade on your couch.

Send Garth the bill…

M43BC

#98 MF on 10.30.17 at 10:29 pm

This millennial does not expect to get a dime of CPP when he retires in 35 years or so. I remember hearing about my boomer parents talking about taking CPP early or not. They took it (along with OAS).

“Who cares? We hate you. — Garth”

Haha sounds more like envy to me :)

MF

#99 acdel on 10.30.17 at 10:29 pm

Man, the last four or five days you and your guest having been hitting your posts right out of the ball park; another awesome post, thanks.

I am taking mine at 60, worked since I was 8, yep, slave labour, with other people taking advantage of it.

#100 april on 10.30.17 at 10:34 pm

# 56 -coming from the real estate industry?

#101 Penny Henny on 10.30.17 at 10:36 pm

In this context the early-CPP debate is silly. If you really need to sweat about getting $650 a month now as opposed to $850 five years into the future-GT

Nitpicking, maybe?
But if you are eligible to receive 650 at 60 then you would get 1000 at 65.
Ya I know, damn details

Incorrect. And do not quote a half sentence. – Garth

#102 april on 10.30.17 at 10:37 pm

#53 – take it at 60 since on one knows how many yrs they have left after that. One can hope but can’t assume they’ll live to 80 or more

#103 MF on 10.30.17 at 10:41 pm

#76 Lost…but not leased on 10.30.17 at 9:39 pm

Everyone hired in the public service in the last 15 years is temporary and on contract with zero job security. They are more worried about having their contract renewed in 3 months than their pension in 35 years.

Time to leave the 1990’s.

#80 Silent the People on 10.30.17 at 9:48 pm

“How long do you think the government is going to give the civil service DP plans? This is also coming to an end! The system is broke!”

-Sometimes my sales job takes me to places where there are lots of EI applicants. Lots of sad cases of older workers being discarded. When in time of need, you watch how much these boomers are desperate for government help.

Point = I don’t think pensions are the problem, look at the amount of welfare and benefits that are distributed to our population.

MF

#104 Ponzius Pilatus on 10.30.17 at 10:45 pm

#30 paul on 10.30.17 at 7:14 pm
#18 Rental property math on 10.30.17 at 6:47 pm

Weed stock up 19% today. What do you think Garth?
When’s the last time you had a puff?
——————————————————————–
Must have been awhile for you, a Puff. lol
————–
Puff, the Magic Dragon by PP&M.
Iconic song.
Don’t they call it toke now.
Trudo should know .

#105 Ace Goodheart on 10.30.17 at 10:47 pm

RE: #5 None:

I think you’ve got him wrong. Don’t believe that he’s a trust fund kid. I seem to remember he made his first fortune by streaming news out of a van using what was then an unheard of technology.

So carved a couple of pumpkins today. Smelling them and thinking aloud “these don’t smell very spicy”.

Then I hear “it’s not spice from pumpkins you dork. It’s nutmeg and ginger”.

Oh well. Another childhood fantasy ruined by a grumpy spouse who has to work a 12 hour shift tomorrow…..

#106 Ponzius Pilatus on 10.30.17 at 10:59 pm

As any Statistician will tell you:
There is a 100% probability that you will die between your birth and death.
So, plan accordingly.
Or don’t.

#107 Penny Henny on 10.30.17 at 11:00 pm

Hey Crowded Elavator Fartz
Is this your theme song?
https://www.youtube.com/watch?v=G6Kspj3OO0s

#108 Welcome to Slurrey on 10.30.17 at 11:16 pm

Back to real estate ….. Question ? Is there any disadvantage selling your house at the peak and then buying another one ( same price just changing neighbourhoods) is there some benefit in waiting for a correction…….. like more inventory for more options ? or pouncing on desperate sellers. My timeline for moving is around 1 year. Garth and company …… your thoughts…..

#109 rainclouds on 10.30.17 at 11:24 pm

This is related to the US and Social Security but instructive.
In a nutshell if you have squat, wait. If you are financially secure? woo hoo, beer money!

The interesting difference is the age where full benefits are realized. Thanks to T2 buying us off with our money those of us from the land of milk and RE cartels can collect sooner.

https://www.fool.com/investing/2017/10/29/plan-on-social-security-at-62-heres-why-you-ought.aspx

#110 Penny Henny on 10.30.17 at 11:24 pm

#83 NoName on 10.30.17 at 9:52 pm
If you keep going like this I am going to be able to pull the pin soon and retire in Fiji.

I’ve never been to Fiji but what pictures are telling me, that island with misspelled name looks almost as good as Croatia.
///////

I always figured you to be Partisani

Heallthy sense of humour mixed with humility and bad speeling

#111 Dmitry on 10.30.17 at 11:32 pm

#88 Smoking Man

I like this one more:
https://www.youtube.com/watch?v=WM8bTdBs-cw

#112 Lost...but not leased on 10.30.17 at 11:39 pm

#103 MF

” ??????”

Agreed there are “temps”…but at the Local Gov’t level one has FULLTIME Police, Firemen, Teachers, City Workers etc. etc. whose salaries and benefits often take up a lions share of annual property taxes.

These defined benefits are fiscally crippling and non sustainable. The sooner this looming reality is addressed the better for all concerned.

The End.

#113 Penny Henny on 10.30.17 at 11:44 pm

#101 Penny Henny on 10.30.17 at 10:36 pm
In this context the early-CPP debate is silly. If you really need to sweat about getting $650 a month now as opposed to $850 five years into the future-GT

Nitpicking, maybe?
But if you are eligible to receive 650 at 60 then you would get 1000 at 65.
Ya I know, damn details

Incorrect. And do not quote a half sentence. – Garth
////
Forementioned second part of sentence–
you’re in lousy financial shape or already starting to lose your marbles.

How does this change the math??

#114 Toronto world class? Lol on 10.30.17 at 11:56 pm

http://www.blogto.com/city/2017/10/new-ranking-trashes-public-transit-toronto/

#115 Big Daddy on 10.30.17 at 11:58 pm

Disagree somewhat. I would be drawing down my RRSP towards zero at Freedom 55 and foregoing the early CPP at 60 . Reduce future taxable income of the RRSP/RRIF with fully sprinkled non reg entirely dividend tax credit and put that RRSP withdrawal into a dual TFSA for a large amount compounding longer than a reduced CPP, then taking the CPP at 65 with no clawback. This plan can get you within aichieving a $104,000 couples income with near zero tax paido if you’ve don’e it right. Then….you want to starve the beast…..get out of Canada to a low cost of living country. Spend your money elsewhere and pay zero tax…..that’s the dream . Beach villas with pool in a gated community can be found for less than $200K…..furnished…..in many sunny countries.

#116 Where's The Money Guido? on 10.31.17 at 12:01 am

Can anyone give me any info on how to split income, or any other tax avoidance items with an adult child in the same residence when the parent is single and the child makes more than the parent. Thanks

#117 Happy Housing Crash Everyone! on 10.31.17 at 12:07 am

#95 For those about to flop… on 10.30.17 at 10:20 pm
Conspiracy theory time.

What if the Happy Housing Crash guy was a realtor who was trying to shame all his fellow PREC’s into not communicating and helping out guys like me by calling them scum and shysters.

Pure genius…

M43BC

_________________________

Have I not stressed the total dislike I have for these vermin scumbags? Have I not written enough songs with my anger of said SHYSTERS? You dirty rotten POS .Your disgusting smell of deceit is sickening. To be called the lowest form of human scum is infuriating. You SHYSTERS should be jailed for financial crimes. I guess I will need to written more songs

#118 VicPaul on 10.31.17 at 12:12 am

#49 Steve Bridge
“Draw down RRSP first while in a lower tax bracket”

I have been thinking about this for a while. Wouldn’t it be better (tax efficient) to start drawing down the rrsp when I retire (DB indexed/cola) at 61 until such time (7 years X ?K to keep me under 72k threshold when CPP/OAS kick in). TFSA/non-reg. would be the primary investment accounts at that point. Am I over-thinking or not understanding?

#119 fishman on 10.31.17 at 12:13 am

I’ve never been to Fiji either so don’t know about retiring there. I can tell you that there are thousands & thousands of Fijians out here. Go to the two day Rugby Sevens at the stadium this year. More Fijians flags than all the rest including Canada’s put together. They like their rugby.The worst part is the blue ensign is the now most beautiful flag in the world. We had that spot till we gave up the red ensign for political correctness.

#120 Happy Housing Crash Everyone! on 10.31.17 at 12:27 am

SHYSTER SHYSTER SHYSTER, Where are you?
You’ve got to sell a home now
SHYSTER SHYSTER SHYSTER , Where are you?
Cause Your Mercedes dealer needs a payment from you now.
Come on, SHYSTER SHYSTER, I see you
pretending you’ve got a bidder now.
But you’re not fooling me or OFSI,
the way you shake and fib now. Fall buyers are all gone now, we’ve got a mystery for SHYSTER SHYSTER
To solve now.

Happy Housing Crash Everyone Everyone. Scooby doo

#121 Flamed out in Kitchener on 10.31.17 at 12:32 am

Thanks for the great post Garth. You answered my questions and have me convinced … More fun at 60 for sure; cuz you never know… plus mo’ money for ice cream at the Belfountain General. Gotta luv it.

Cheers

#122 BillyBob on 10.31.17 at 4:09 am

#79 Linda on 10.30.17 at 9:48 pm
Regarding taking CPP ‘early’. For anyone who has maxed out their RRSP’s for decades, fully funded their TFSA & is lucky enough to have a work related pension plan, don’t delay your CPP. IF all you have to count on upon retirement is CPP, delay to age 65 to maximize your CPP benefit. Don’t wait until 70 unless you really want to keep working till then & simply can’t make ends meet otherwise. Why? Because unless you have truly stellar longevity running in your genome, you are highly unlikely to benefit in the long run by delaying taking your CPP past age 65. Despite the actuaries & all those lovely news clips about how one should plan upon living to age 90 or 95, the truth (as supported by handy StatsCan numbers as of the 2016 census) is that only 4.5% – that is four and one half percent – of the current Canadian population is age 80 or older. Of that 4%, some 2% fall within the 80-84 age range; 1.5% are in the 85-89 age range & the remaining 1% are age 90 plus. As per StatsCan, 305,700 Canadians altogether, of which 216,000 are female & 89,700 are male. This after decades of medical advances & universal health care.

Don’t bet against that house, people. It is a sucker bet.

====================================

The thing is, people who are now in the 80-100 year age bracket were born in the early 20th century. Not sure why you feel that’s relevant whatsoever to people who still have decades to retirement in 2017 and decades beyond that? It’s those numbers that Garth is addressing.

And yeah, I’ve pointed this out before, because you’ve posted the same thing before.

#123 BillyBob on 10.31.17 at 4:16 am

Hmmm…was out wandering the markets at Tamsui today (Taiwan) and came across this…made me think of crowdedelevatorfartz….

http://i63.tinypic.com/2ue5ut4.jpg

#124 Howard on 10.31.17 at 6:51 am

This is the kind of value-added advice for which we come here. I will remember this in 23 years when I turn 60 (ha ha ha…as if the minimum age won’t be upped considerably before then).

If you wait 23 years to worry about this, you will be pooched long before. — Garth

#125 Dharma Bum on 10.31.17 at 6:53 am

Getting money today ensures that you already have it, so there is no worry as to if and when the money will be received, because it already is.

Then, you can control how it’s invested and sheltered.

The sooner we get our money the better.

Simple.

#126 Gravy Train on 10.31.17 at 6:53 am

#53 Ben Johnson on 10.30.17 at 8:22 pm
“… [A]ssuming I live to 85 years old, and using your numbers (650 and 850 a month) I would get an extra 9 grand by waiting to take my money out until I’m 65.”

#102 april on 10.30.17 at 10:37 pm
“#53 – take it at 60 since [no] one knows how many yrs they have left after that. One can hope but can’t assume they’ll live to 80 or more”

Ben, you’re 9 grand ahead if you ignore taxes, and if either you consume all your CPP income without saving and investing, or your nominal rate of return on investments is equal to the inflation rate (in which case your real rate of return is 0%)—see the Fisher equation.
https://en.m.wikipedia.org/wiki/Fisher_equation

Garth assumes that you’ll save and invest a portion of your after-tax CPP income at a decent return—preferably in a registered account. You’ll be ahead of the game if you take your CPP income at age 60—since you’ll have 5 more years of compounding.
https://en.m.wikipedia.org/wiki/Compound_interest

Run the numbers again using a future value calculator with likely savings, interest*, tax and inflation rates.
http://www.calculator.net/future-value-calculator.html

Oh—and this is just an aside—you could drop dead at 65.

*interest rate in this case is the rate of return on investments.

#127 Dharma Bum on 10.31.17 at 6:59 am

#120 Happy Housing Crash Everyone

“SHYSTER SHYSTER SHYSTER, Where are you?”
——————————————————————–

SHYSTERS……Come out to PLAYYYYYYYY!!!!

https://www.youtube.com/watch?v=NwwY9y6O3hw

#128 Ace Goodheart on 10.31.17 at 7:02 am

RE: #114 Toronto world class? Lol on 10.30.17 at 11:56 pm
http://www.blogto.com/city/2017/10/new-ranking-trashes-public-transit-toronto/

Anyone who thinks the TTC is world class, has never travelled.

TTC is an antiquated, dilapidated system that is loosely based on the old surface trolley routes that used to criss cross Toronto before the invention of the car (our street cars are what remains of this system).

Our subways are an afterthought.

The rest of us get around on over crowded, never on time busses, similar to how things are done in sub Saharan Africa.

If you want to see world class transit, go to New York. Or Paris. Or Tokyo.

TTC is a running joke.

Good luck spending that 3.3 billion to build another subway out in suburbia.

#129 Howard on 10.31.17 at 7:07 am

#137 Stan Brooks on 10.30.17 at 11:16 am
#107 Howard on 10.30.17 at 4:28 am
Do you have any ideas for childfree singles?

Or are we the cash cows that keep this tax-avoidance party going for the marrieds?
————————————

You sir are an idiot/at best.

No wonder you can not find a partner in life.

Canadian tax laws are the worse as it applies to family taxation.

This is why Canadians have no kids so we need to import immigrants.

Who will pay you pension, the holy ghost?

Go to Germany to see what nightmare the singles taxation there is, you pay guaranteed on average over 50 % on average, not on the upper tax brake.

Pretty much defines you status as a burden to the society and lack of responsibilities.

Mooooooooooooooooo
as another gentleman here said.

T2 and BM would love ya.

——————————————-

Wow, such venom! :-) I hope you’re not so temperamental with your (apparent) wife. Eye-shadow can only cover up so much.

I’m at work and don’t have time at the moment to do the research but I believe it’s been debunked that singles are, on the whole, a burden on society especially compared to low-income couples who have far more children than they can afford. Singles tend to have more savings and can therefore pay their own way in their old age with far less government help than our married/breeding counterparts.

I can kind of understand the smorgasbord of legal tax-avoidance goodies offered to parents (even though it grates that I have to help pay for the upbringing of those brats who ruin all of my transatlantic flights). But what about childfree married couples? Why should they be afforded more favourable tax treatment than singles?

Perhaps it hasn’t occurred to you that some people are fiercely independent and introverted, as I am, and don’t need to submit to an archaic notion of marriage to achieve self-validation. I know many happy marrieds but I also know many miserable ones.

Also, as perhaps Garth can relate, I prefer dogs over children.

#130 Howard on 10.31.17 at 7:09 am

Boomers will likely live to 100-120 easily. That’s what a stress-free life does for you.

Millennials? 70-80 tops. Definitely take the money at 60 (if still available by then, and it won’t be).

#131 Dominoes Lining Up on 10.31.17 at 7:24 am

Ontario college strike continues.

https://globalnews.ca/news/3831898/no-new-talks-scheduled-as-ontario-colleges-strike-enters-week-3/

What is fascinating, and should grab our attention, is the nature of the dispute.

The strikers are seeking merely a 50% level of positions be held by full time staff. Sounds pretty tame.

The management wants to keep it closer to 25%. They cite changes in the next decade such as due to “AI” as reasons they don’t want to commit to full time staff.

It’s happening, now , folks. Job replacement by technology is either happening now or greatly influencing organizational decision making.

How safe is your job?

Probably a lot less than we all think.

#132 Dolce Vita on 10.31.17 at 7:55 am

All very good advice Garth, especially the CPP retirement age.

Your commenters here are a very well healed crowd indeed, cash flow wise.

I think most Canadians are not stupid and understand the need for retirement funds but looking at their income, it is no surprise few have RRSP and/or TFSA maxed out contributions. CRA 2015 data, taxfilers by income bracket:

https://www.canada.ca/content/dam/cra-arc/migration/cra-arc/gncy/stts/itstb-sipti/2015/tbl4o-eng.pdf

Yup, in 2015, 2/3 of Canadian taxpayers grossed $44.7K a year or LESS. Only 8.6% made more than $89.4K.

And if it is true 70% have homes, well, it becomes obvious why the RRSP/TFSA max. contribution stats are so bad and that they may hold out until 65 yrs of age or older to get a higher CPP benefit.

Your advice is great but then, the reality of cash flow is just that.

#133 crowdedelevatorfartz on 10.31.17 at 7:59 am

@#123 BillyBob

Half way around the planet….people are still thinking of me……I am truly touched.

No flowers…..please donate to your fave charity.

#134 I believe everything on television on 10.31.17 at 8:05 am

happy Halloween
meet the control freaks-

https://www.rockefellerfoundation.org/our-work/initiatives/100-resilient-cities/

#135 BK on 10.31.17 at 8:18 am

Millennial here – not counting on ANY CPP or OAS in retirement. Governments can’t even pay their employees today correctly, what indication is there that they will be able to plan 30 years down the road?

By my estimates (assuming 5-6% returns and 2-3% inflation) my wife and I will need about 2.5M to finance a comfortable retirement, nothing terribly lavish. Things like cottages and motor boats are just not even considerations if we want to stop working at some point in our lives.

We are in the top 15th percentile of household income, save 50% of our net, yet everything is out of reach (and we don’t live in an expensive RE market either)… Anybody I’ve come across who is more optimistic just simply hasn’t run the numbers, I don’t think the old “10% after tax” applies any more…

#136 Stan Brooks on 10.31.17 at 8:54 am

There goes the ‘growth’.

https://ca.finance.yahoo.com/news/canadian-gdp-unexpectedly-fell-aug-123614306.html

Note the word ‘unexpectedly’, I guess stats Canada does not read my posts here.

———————————-

#129 Howard on 10.31.17 at 7:07 am

It is good to be fearlessly independent.
I guess that excludes going to a doctor (somebody else’s kid) at old age or changing you own diaper?
And not counting on any income assistance, i.e. liability of other people kid’s taxes?

#137 Stan Brooks on 10.31.17 at 9:00 am

Note the action in the loonie. On it’s way to the upper sixties range.

Ryan Lewenza, no recession indicators, Eh buddy?

#138 Ian on 10.31.17 at 9:07 am

Blog dog meeting downtown Toronto on Thursday after work, 5pm or so. Duke of Richmond 20 Queen W at south end of Eaton Centre!

#139 MF on 10.31.17 at 9:16 am

112 Lost…but not leased

No it isn’t.

Thanks for acknowledging that most federal and provincial public sector jobs are temporary and contract now. Lots of folks on here seem clueless about that. They are delusional. You want to talk about the politics of envy and division. It is Simply pathetic reading the comments from sour private sector workers blaming someone else for their frustrations.

Now about property taxes. Those services you mention are absolutely necessary. What private business will survive and thrive without a competent police force enforcing laws? Higher wages generally drive down the risk of corruption. You can see the opposite effect in places like Mexico where wages are too low and everyone can be paid off. It’s sad, We are so fortunate to have a relatively non corrupt system here yet people will still complain.

Why don’t you go move to Mogadishu? Zero government there so it should be flourishing.

MF

#140 Howard on 10.31.17 at 9:22 am

#124 Howard on 10.31.17 at 6:51 am
This is the kind of value-added advice for which we come here. I will remember this in 23 years when I turn 60 (ha ha ha…as if the minimum age won’t be upped considerably before then).

If you wait 23 years to worry about this, you will be pooched long before. — Garth

———————————

I meant the part about taking CCP at 60 rather than deferring for larger payments.

As for general retirement planning, of course the earlier the better. But as likely many of your readers here, I’m frugal and minimalist by nature so I don’t think I need quite the war chest on which to retire compared to those who get off on lots of fancy « stuff ».

Frugality is more of an affliction than a virtue. — Garth

#141 LivinLarge on 10.31.17 at 9:23 am

BK; I wasn’t going to comment again on this thread but you forced me to with your post.

For almost a year after leaving CRA I worked as a “financial planner”. Not a fee for service planner but one of the legion of commisioned mutual fund selling planners and this “how much do I need to retire” schtick was one of the primary tools we were required to use to suck customers into buying mutual funds.

I could write a book on all the reasons you don’t “need” $2m to retire comfortably and Fearless Leader has likely done just that already so I’ll keep it simple.

First, a competent fee for service advisor will likely deliver a little higher rate of return for yoy even after their fee but far more importantly they will structure your investments into tax advantaged vehicles rather than having you receive your retirement income as fully taxed income. That’s the crucial advantage of employing a fee based advisor rather than a commission based advisor. It’s never a calculation of how much you gross but ALWAYS a calculation of how much you keep at the end of the day and a skilled fee for service advisor will be able to because your best interest is their sole concern rather than maximizing their own income via commissions.

Second and almost as important, to maintain your current lifestyle in retirement, you always need less income. You’re already living on 50% of your current net according to your post so start your “retirement needs” calculation there. You kids are grown when you’re retired so take that expense (gross not net) out of the mix. You’re principal residence should have already been paid off so take that mortgage expense expense out too (again gross not net required). Then there is the very real reduction in lifestyle spending that retirement creates. Clothing, multiple newish cars, the need tomeat outside the home and entertain etc al, drop like a stone when actually retired.

I’m not trying to shill for Turner Investments or any other advisory but fee for service advisories earn their vigorish the old fashioned way…they earn it with enhanced returns plus structuring your income in retirement to significantly reduce the taxes you are required to pay (legitimately).

So, if you need $2+ million in retirement to maintain even your current lifestyle that you already maintain on 50% of your net income then you’re drinking the wrong Koolaid.

#142 Howard on 10.31.17 at 9:26 am

#136 Stan Brooks on 10.31.17 at 8:54 am
There goes the ‘growth’.

https://ca.finance.yahoo.com/news/canadian-gdp-unexpectedly-fell-aug-123614306.html

Note the word ‘unexpectedly’, I guess stats Canada does not read my posts here.

———————————-

#129 Howard on 10.31.17 at 7:07 am

It is good to be fearlessly independent.
I guess that excludes going to a doctor (somebody else’s kid) at old age or changing you own diaper?
And not counting on any income assistance, i.e. liability of other people kid’s taxes?

———————————

So do you agree that tax advantages for child free marrieds are rather unfair compared to child free singles?

Re : diapers. I don’t ever plan to approve the implantation of pacemakers or other devices that keep my body artificially alive after my mind is dead. So in all likelihood I won’t be a 95-year old dementia patient because I’ll be dead long before that point.

#143 Broadway Limited on 10.31.17 at 9:29 am

Hey Garth –

You were actually in a ’60s riot? Cool.

Four years ago, when I turned 60, I took an early CPP payout. Waiting until 65 would see a 99.2% payout of the monthly maximum – I’ve been contributing since 1969 (!). But I figure, like you say, the feds will pay me now, so I took the money NOW, with a 32% discount. With that in mind, I determined that the breakeven point was 15 years – in other words, by taking the payment now rather than at 65, I’d be ahead of the game for a full 15 years, not counting the additional investment income during that time. Now that is a no-brainer!

#144 Alistair McLaughlin on 10.31.17 at 9:32 am

CPP income – like most income – is fully taxable at your marginal rate. Unless you’re so flush that your post-retirement income is going to equal or exceed your income while working, taking CPP at age 60 means taking a bigger tax hit on top of a reduced payout.

So you won’t be putting the entire amount in a TFSA if you take it at age 60. You’ll be putting away two-thirds or less. The only way you can sock the entire amount away is to contribute it to an RRSP, and fill out a form T1213 to have tax reduced at source (for your employment income). Otherwise a third or more of that $650 per month goes right back to the government.

So don’t take any government money for five years which you can shelter and grow tax-free because you will not get all of the money? Great logic. No wonder we’re a nation of financial failures. — Garth

#145 Ian on 10.31.17 at 9:56 am

US Fed Watch:

Looks like Jerome Powell is the man.

https://www.marketwatch.com/story/trump-to-announce-his-pick-for-fed-chair-on-thursday-2017-10-30

#146 Stan Brooks on 10.31.17 at 10:01 am

#142 Howard on 10.31.17 at 9:26 am
———————————

So do you agree that tax advantages for child free marrieds are rather unfair compared to child free singles?

What tax advantages for child free married over child free singes?
The minimum spousal credit if only one works?

—————————
It does not matter what you plan for, you most likely will live to enter the dementia phase in your life and will need care.
—————————

You have to see kids as an investment in the future.
If your parents were thinking like you, you would not have even existed.
You are enjoying your life due to their/your parents sacrifices, and no, Canada is not doing enough to encourage having family and kids through proper family taxation.

#147 steve on 10.31.17 at 10:09 am

DB pensioners shouldn’t take CPP early if they are receiving a bridge benefit. No?

#148 Tony on 10.31.17 at 10:34 am

Re: #137 Stan Brooks on 10.31.17 at 9:00 am

Everything stocks up negative for the loonie and you have the luxury of Poloz at the helm.

#149 bs on 10.31.17 at 10:39 am

Most of the ones under 30 are idiots. Instagram, snapchat, etc. All the biggest waste of time.

Generation X is the only generation that matters.

#150 Ian on 10.31.17 at 10:42 am

Happy Housing is writing songs again.

Stone, you mentioned something about peeing your pants?

#151 LivinLarge on 10.31.17 at 10:48 am

In a word Steve, correct in a sense. The math is considerably different when collecting CPPD but the rationale for taking it early remains. Still, CPPD is CPP so if you’re collecting CPPD you have already taken early CPP and the early CPP question is actually moot. Also, the few people that I personally know who have taken CPPD actuall need it to cover current expenses so they aren’t saving any of it.m

#152 Tony on 10.31.17 at 10:49 am

The reason to take CPP at age 60 is the system is based on the Canada Pension Plan earning an eight percent return each year. With the stock market about 500 percent overvalued the Canadian Pension Plan at best will break even over the next decade without taking inflation into consideration. The Canadian Pension Plan has nothing in the physical precious metals and even gold and silver stocks can’t withstand a total market meltdown like the ’29 crash and the subsequent great depression.

#153 NEVER GIVE UP on 10.31.17 at 10:53 am

Some things don’t change, moisters. Never trust the man.
====================================
STICK IT TO THE “MAN”!!

#154 LivinLarge on 10.31.17 at 11:11 am

BK, there is also a third falacy that all the “How much do I need” calculations encourage you to make in order to scare the begeebies out of you and drive you to buy more mutual funds. The presumptions you make in your post suggest that you have indeed made them already.

You are presuming a static investment return in retirement while presuming an escalating cost of living due to inflation. Investment returns are just as effected by inflation as the cost of living is.

#155 TheDood on 10.31.17 at 11:14 am

#52 GovernmentShill on 10.30.17 at 8:13 pm

Who cares? We hate you. — Garth
_________________________________

LMAO! This is why I come here!

#156 HaHaHa on 10.31.17 at 11:21 am

Very helpful and thanks. This is the type of advice that is needed. Very good advice. On a side note the idea that todays youth have it harder. In 1980 when I was starting out did not have a computer to trade ETF’s or stocks at $9.99 a trade. Us average people didn’t or could not afford a brokerage account. My first was RBC Dominion security and what a shyster that so called broker turned out to be. Today the opportunity is there to get involved in the market on your own terms but alas todays youth pisses the time away on facebook. So is it harder today kids? Kind of depends on what you do with your time and money. And thanks again Mr. Turner for the advice. Only 8 months to go till freedom 55

#157 Victor V on 10.31.17 at 11:27 am

http://www.bnn.ca/loonie-weakens-on-surprise-gdp-contraction-1.901307

The Canadian dollar weakened against its U.S. counterpart on Tuesday after data showing a surprise contraction of the domestic economy in August further dampened prospects of another Bank of Canada interest rate hike this year.

#158 Smoking Man on 10.31.17 at 11:36 am

Canadian GDP in the toilet.
The shit storm is starting.

Nice going T2 and thanks for my huge forex gains.

#159 TurnerNation on 10.31.17 at 11:45 am

I see the looney left attacking our forum host. Why instead not attack our real and evil elite rulers.
Looney left wants us all into poverty and communism. Except for funding their leftist causes.

Do I really believe what I’ve written? Didn’t used to.

Thank god I work on Bay St . Hard work there brings freedom.

#160 Just your friendly neighborhood Dissident on 10.31.17 at 12:02 pm

Hi Garth, I have a question.

So, my sister and her husband have been throwing additional lump sums at their mortgage every year (according to my GIC-nerd mom), and I and my husband have not. They also have investments (TFSAs, RSPs, RESPs) that they actively contribute to, as far as I know. They do not plan to move from this said house.

My question is, is it wiser to throw your cash flow into investments, thus plugging your cash into an investment vehicle for appreciation long-term, or is it wiser to reduce your mortgage by throwing that money into a house, which you don’t plan to sell, but you just want to reduce the amount of years you’ll be charged interest on those payments?

What is the less nerdy thing to do here? (The reduction of mortgage payments is obviously my mom’s idea, bless her…she comes from a time when mortgages were something hideous like 20%).

#161 I'm A Believer on 10.31.17 at 12:04 pm

@ #7 Ian

Well stated! It’s become boring and annoying that many Canadians have a bad attitude, think profit is a dirty word, look down on others who have succeeded. We eat our own. I keep wondering when Cdns will grow a pair and be strong. Decades later…… crickets.

#162 Tbone on 10.31.17 at 12:14 pm

Just an update on the seniors house I mentioned previously .
Went on the market one month ago , lots of lookers but no offers.
Price reduced 3 % last week and a new wave of prospects.
Sold within 2% of asking with no conditions .
Normal market conditions in my opinion .

No crash that I have noticed. Sorry if I upset the doomsayers on this blog.( just being canadIan, I’m not really sorry )
Oh , and the realtor was a real stand up guy, university educated ,and a
True professional. You just have to know how to pick them.

And I took my ccp early and blow it on vacations. Who doesn’t like free
Vacations. That is sound financial advice .You should do it too!
What’s say you Garth .

#163 Doghouse Dweller on 10.31.17 at 12:24 pm

STICK IT TO THE “MAN”!! Moisters manual

Your free guide to free everything ! Steal This Book by Abbie Hoffman

http://www.semantikon.com/StealThisBookbyAbbieHoffman.pdf

#164 Victor V on 10.31.17 at 12:27 pm

http://business.financialpost.com/news/economy/update-1-canadian-gdp-unexpectedly-fell-in-aug-amid-industry-shutdowns

Douglas Porter, BMO chief economist: “The run of amazing Canadian economic data is officially over, with growth coming back to reality in hurry. But while there is no debate that today’s soft reading is a surprise and a disappointment, there were some special factors involved, including a monster mash of maintenance shutdowns. And, keep in mind that even with a two-month dip, the economy has still managed to grow 3.5% in the past year, and at that same strong pace over the past six months. We continue to expect something closer to 2% over the next year. Today’s soft reading will reinforce the Bank of Canada’s new-found caution, keeping them on hold well into 2018 (we are still calling for March for the next hike).”

#165 Big Daddy on 10.31.17 at 12:30 pm

Fishman…..don’t retire in Fiji. Super bush league….lousy food….poor housing…very poor people. No reliable technology..at all….hard to get in and out. People very tribal….cool to visit….stay for six months….dig on the fringing reef….
don’t commit.

#166 Capt. Serious on 10.31.17 at 12:43 pm

#160 Just your friendly neighborhood Dissident on 10.31.17 at 12:02 pm

You need a spreadsheet. The right answer depends on how much you anticipate paying in interest (many factors), and how much you anticipate earning on your investments. Paying down the mortgage aggressively isn’t really wise when interest rates are as low as one may be paying, but one needs to consider the size of the mortgage and future interest costs once rates reset higher. As Garth has pointed out before, best right now might be pay the payments, invest, and pay down the principal at renewal with investment gains.

#167 Dups on 10.31.17 at 12:45 pm

Take a look at the old European countries, they have been through the pension plan scenarios before. Canada is only 150 years old. EU has plenty of examples of what can happen or will happen. History repeats itself, people forget, rinse, dry, repeat…

#168 Just your friendly neighborhood Dissident on 10.31.17 at 1:01 pm

#166 Capt. Serious on 10.31.17 at 12:43 pm
#160 Just your friendly neighborhood Dissident on 10.31.17 at 12:02 pm

You need a spreadsheet. The right answer depends on how much you anticipate paying in interest (many factors), and how much you anticipate earning on your investments. Paying down the mortgage aggressively isn’t really wise when interest rates are as low as one may be paying, but one needs to consider the size of the mortgage and future interest costs once rates reset higher. As Garth has pointed out before, best right now might be pay the payments, invest, and pay down the principal at renewal with investment gains.

– – – – – – – – – – – – – – – – – – – – –

Ahh! Thanks Capt Obvious ;) That’s another way to look at it. This money game is all about moving things around and gettin’ creative. Yes, I suspected that the right answer would to be max out investment opportunities firstly and worry about the mortgage secondly, knowing that mortgage rates are still historically low (and not 20% which would benefit from a fast pay-down)…

#169 Doghouse Dweller on 10.31.17 at 1:48 pm

#141 LivinLarge
expenses ~~~~~~~~~~~drop like a stone when actually retired.
—————————————————-
Good stuff, I might add No more CPP deductions, No more EI deductions, No more Union dues and 2k pension tax deduction. And the best, you never have to get up and drag your ass to work again. Lots of time to work on Dividends, Capital gains, and wheeling and dealing in general.

I`m interested in computer setups, I`ve got three monitors, A) Jstock
and CHCH tv business/news B) Webbroker and Banking C) Greaterfool,
google/ yahoo finance , web surfing in general.

Anything you or others could recommend in this area ?

#170 Perspective on 10.31.17 at 1:51 pm

I am 57 and getting ready to retire.

Unlike SCM I spent those years hustling rather than in my parents basement on some dumb blog.

I will take my CPP early and will think of SCM while touring the world. Don’t worry SCM I’ll come home in time to suck up free healthcare.

#171 LivinLarge on 10.31.17 at 2:08 pm

Doghouse, just read, read, read. I learned a lot when starting out by reading Fearless Leader’s newspaper work and more recently his books.

As far as I know, Fearless Leader is the only former MoF working as a planner for the averafe Joe Six Pack as well as offering the benefit of his experience free here. I don’t necessarily agree with any of his political opinions but that’s not what I am looking for, I have my own political opinions. Decades of financial journalism coupled with the inside knowledge of how the sausages are made that comes from actually being in the abbatoir (MoF) is invaluable when trying to differentiate between fact and actual reality.

One thing I will say s that listening to most financial pundits who are actively in the industry and opining on TV or in print, has cost me the most over the years. They all seem to have an agenda that isn’t in my best interest.

The last thing IMO is to be aggressive when investing but never speculate.

#172 Lost...but not leased on 10.31.17 at 2:20 pm

#139 MF

Yes…temporary/contract workers exist in Gov’t, and you claim a large %.

If true,likely an indicator that Gov’ts realize the status quo is not affordable.

Now we move into existing liabilities for those full time and union members. Are those with defined benefits a fiscal albatross for the current and future taxpayer ? aka like the USA, where more and more gov’ts are declaring bankruptcy?

BC Teachers won a court decision last Spring that will require 2600+ more teachers. However, many school districts cannot fill these positions, to the point some are hiring back retired teachers. Hence a pyrric victory?!?

Re: your claim of higher salaries produce higher calibre civil service, a better society with less corruption? Are you serious?

Via numerous experiences and examples,I find Gov’t and its many bureaucracies in our modern era rather arrogant, dysfunctional, and incompetent.

What has likely happened is their self entitlement concurrent with their fear of the growing lower caste of private citizens masks a subtle detest towards us.

Point is, not sustainable, due for collapse.

#173 Tazi Bnu on 10.31.17 at 2:23 pm

#168 Just your friendly neighborhood Dissident on 10.31.17 at 1:01 pm
#166 Capt. Serious on 10.31.17 at 12:43 pm
#160 Just your friendly neighborhood Dissident on 10.31.17 at 12:02 pm

You need a spreadsheet. The right answer depends on how much you anticipate paying in interest (many factors), and how much you anticipate earning on your investments. Paying down the mortgage aggressively isn’t really wise when interest rates are as low as one may be paying, but one needs to consider the size of the mortgage and future interest costs once rates reset higher. As Garth has pointed out before, best right now might be pay the payments, invest, and pay down the principal at renewal with investment gains.

– – – – – – – – – – – – – – – – – – – – –

Ahh! Thanks Capt Obvious ;) That’s another way to look at it. This money game is all about moving things around and gettin’ creative. Yes, I suspected that the right answer would to be max out investment opportunities firstly and worry about the mortgage secondly, knowing that mortgage rates are still historically low (and not 20% which would benefit from a fast pay-down)…
____________________________________________
Another idea is to build your investments until they’re large enough to pay the whole mortgage off. Then take out a new mortgage and invest it. You are pretty much in the same position as before but you get to deduct the interest off your taxes. This only works in a non-registered account, but you can do your build up phase in a TFSA. Also, having professional help to do this is highly recommended.

#174 Ian on 10.31.17 at 2:37 pm

Dogs, Canadian August GDP was not that significant a difference. -0.1 v +0.1 expected. Most of that due to plant shutdowns. August is the most unreliable month to measure it. I wouldn’t put too much stock into that reading

#175 Stan Brooks on 10.31.17 at 2:40 pm

Maybe it is just coincidence…

http://www.yourtango.com/2016285888/fascinating-way-you-tell-lies-per-your-zodiac-sign

BM is born on October 7,

Libra (September 23 – October 22)
Libras are the diplomats of the zodiac, so in the name of what they believe is best for everyone, lying is a necessity.

Unlike Geminis and Leos, their lies are somewhat believable; people don’t even realize that they’re lying until it’s too late.

#176 aa3 on 10.31.17 at 2:40 pm

The Boomers were idiotic hardline Communists in young adulthood, but just a few short years later when they had jobs, they voted for Reagan.

#177 Lost...but not leased on 10.31.17 at 2:48 pm

Freedom 55 Civil Servants…

Another issue is when they retire and collect their pension…many will then take on other jobs and deprive a job from another person.

Example: Police will retire in their 50’s , and then take on another job with Gov’t in another capacity

#178 TnT on 10.31.17 at 2:57 pm

Zillow to accept Canadian listings

http://www.remonline.com/zillow-accept-canadian-listings/

Yes!

#179 Hamilton on 10.31.17 at 2:58 pm

DELETED

#180 TnT on 10.31.17 at 3:05 pm

#167 Dups on 10.31.17 at 12:45 pm

Take a look at the old European countries, they have been through the pension plan scenarios before. Canada is only 150 years old. EU has plenty of examples of what can happen or will happen. History repeats itself, people forget, rinse, dry, repeat…

***

Pension Plans are a new modern phenomenon in our human existence and depends greatly on demographics.

Old Europe had nothing… in fact Europe is the most murderous region on earth until USA and Russia divided them. People killed each other by the millions for hundreds of years.

What does that have to do with pensions? I don’t know, slow day at work here….

#181 Gravy Train on 10.31.17 at 3:08 pm

#178 TnT on 10.31.17 at 2:57 pm
“Zillow to accept Canadian listings.”

Does this mean Floppy’s out of a job? :)

#182 Lost...but not leased on 10.31.17 at 3:12 pm

#108 Welcome to Slurrey

Timing the (RE)market is a dangerous thing…

Some try to “sell” then sit hoping for a downturn… I have seen a lot of rather sad stories…

Example: A developer purchased 7 SFH properties in a local neighbourhood in 2015 . One owner rented back…..the other 6 properties homes were demolished. The developer paid approx. $1 Million for each .

Now these properties are going for approx. $2 Million.I don’t have the particulars, but my guess is the owner noted earlier did NOT take his money and buy RE elsewhere.

I should also mention that IMHO, the other 6 owners may have sold too cheaply. Developers and scammy realtors LOVE owners who have lived in a home for a number of years…do not follow the market…maybe bought the house for say $100,000 way back when…and do cartwheels when say ” $1 Million !!! ” is offered, and agree to sell, even though they could have asked for more and got it.

Finally…depending on one’s age etc…many people either sell SFH and downsize in the same City, or cash out and move to another area where it much cheaper and have cash in the bank. Again,IMHO, the worst call is often to sell and sit…..more downside than up.

#183 Vundo on 10.31.17 at 3:26 pm

I still don’t understand why you think increasing the minimum age to receive CPP can be done with the flick of a pen and no political explosion, but that no future government will ever devise a means test that excludes people with large TFSA’s from receiving OAS/GIS “pogey” or other such benefits. The only way I can see that not happening is future governments slowly chipping away at contribution limits to the point where the TFSA is rendered insignificant. If poor old people see rich old people getting assistance intended for poor old people then whatever left wing party promises the most “fairness” will win and there will be a means test.

#184 Overheardyou on 10.31.17 at 3:27 pm

Question: Does this sound like a solid investment strategy? Purchase equities traded in USD with CAD now as the value of our dollar is probably going to keep falling in the short term? Then sell your equities when the dollar is at it’s lowest you can take the gains from your equities as well as the gains in the exchange rate?

Be sure to document the results, so I can ridicule you in a future blog post. Thanks. — Garth

#185 Doghouse Dweller on 10.31.17 at 3:35 pm

#171 LivinLarge
Always been a fan of fearless leaders common sense advice. His early news paper articles got me started with the home owner savings plan.
Bought my first TO shack for 55k. I remember sweating bullets thinking “How the hell am I going to pay back a 50K loan.”
Were really in a parallel universe now !

#186 Overheardyou on 10.31.17 at 3:37 pm

#184 Overheardyou on 10.31.17 at 3:27 pm
Question: Does this sound like a solid investment strategy? Purchase equities traded in USD with CAD now as the value of our dollar is probably going to keep falling in the short term? Then sell your equities when the dollar is at it’s lowest you can take the gains from your equities as well as the gains in the exchange rate?

Be sure to document the results, so I can ridicule you in a future blog post. Thanks. — Garth

Haha, will do!

#187 Renter's Revenge! on 10.31.17 at 3:40 pm

If, 30 years from now, losing my OAS because I have a fat TFSA means saving the country from sinking into the financial abyss, I’m OK with that.

#188 LivinLarge on 10.31.17 at 3:44 pm

“Be sure to document the results, so I can ridicule you in a future blog post. Thanks. — Garth”….LOL, OK, now that’s truly too funny.

#189 Overheardyou on 10.31.17 at 3:50 pm

Another question: If maxed out the TFSA and everything is held in Mutual Funds, would you recommend switching some of the capital to ETFs? I would ask a bank advisor but from what I’ve read here they can’t be trusted with investing advice

#190 LivinLarge on 10.31.17 at 4:02 pm

“If maxed out the TFSA and everything is held in Mutual Funds, would you recommend switching some of the capital to ETFs?’…no, I’d recomend switching every last cent of the mutuals to ETFs. Even no load bank funds pay trailing commissions and those come from somewhere and that somewhere is your NAV.

#191 No $hit $herlock on 10.31.17 at 4:03 pm

#88 Smoking Man on 10.30.17 at 10:10 pm

Best song ever.
https://www.youtube.com/watch?v=tAGnKpE4NCI

Best “Nothing Else Matters”

So close no matter how far
Couldn’t be much more from the heart
Forever trusting who we are
And nothing else matters
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Thanks for being so dammed creative Sherlock.

I’ll tell my four year old to cut and past something too.

#192 MS on 10.31.17 at 4:05 pm

#189 Overheardyou on 10.31.17 at 3:50 pm
Another question: If maxed out the TFSA and everything is held in Mutual Funds, would you recommend switching some of the capital to ETFs? I would ask a bank advisor but from what I’ve read here they can’t be trusted with investing advice
_____________
If the equivalent ETF charges 0.25% management fee, while the mutual fund charges 1.5% fee, why not switch ALL??? Unless you found a superstar mutual fund manager (and a superstar one year or even 10 years is not guaranteed not to be a dog next year…) I don’t see any benefit in holding on to any of your funds.

#193 Penny Henny on 10.31.17 at 4:16 pm

#184 Overheardyou on 10.31.17 at 3:27 pm
Question: Does this sound like a solid investment strategy? Purchase equities traded in USD with CAD now as the value of our dollar is probably going to keep falling in the short term? Then sell your equities when the dollar is at it’s lowest you can take the gains from your equities as well as the gains in the exchange rate?
///////////////////

Buy VUN for your exposure to the US equity markets.
When you think the dollar has bottomed then sell the VUN and buy VUS which is hedged.

#194 mike from mtl on 10.31.17 at 4:30 pm

#189 Overheardyou
///////////////////////////////////////////////////////

What account type? Non-reg or RRSP?

Also how much. I wouldn’t bother with self directed below 25k. Transaction fees. Yes compared to usual 2.x% fees ETFs are attractive but contributing often costs.

At worst see if you can convince [email protected] to switch out for more basic passive mutuals. I have yet to see any mutual fund beat even the most basic passive ETF – not only including fees but also, volatility and gain.

Also BE SURE!! of the mutuals’ FEES!! when selling that’s where they get you, ISC, DSC, etc. They’re deliberately unclear if you’re not used to comparing.

#195 devore on 10.31.17 at 4:53 pm

#4 Goldie

Now they riot when a conservative speaker is invited to speak at their campus :/ …

They do? I thought they just retweet.

#196 Overheardyou on 10.31.17 at 4:55 pm

#190 LivinLarge
#192 MS
#193 Penny Henny

Thank you for your advice! As someone who just learned (thanks to this blog) that mutual funds suck, I’m just trying to find other places to invest my hard earned cash. To think I actually wanted to have it managed by the same banks that sold me on the Mutual funds.

#197 SimplyPut7 on 10.31.17 at 4:55 pm

From Global News:

‘Canada’s “robust” economy is expected to slow to a more normal pace in the coming year, a new report from the Parliamentary Budget Officer suggests, and it’s likely the Bank of Canada will keep bumping up its key interest rate until it hits three per cent in 2019.’

https://globalnews.ca/news/3834475/economy-will-start-to-cool-in-the-coming-year-key-interest-rate-to-rise-pbo/

———————————————————————
To hit 3% by 2019 means the Bank of Canada has no clue the kind of mortgages people were getting in Toronto and Vancouver.

#198 Overheardyou on 10.31.17 at 4:58 pm

#192 MS on 10.31.17 at 4:05 pm
#189 Overheardyou on 10.31.17 at 3:50 pm
Another question: If maxed out the TFSA and everything is held in Mutual Funds, would you recommend switching some of the capital to ETFs? I would ask a bank advisor but from what I’ve read here they can’t be trusted with investing advice
_____________
If the equivalent ETF charges 0.25% management fee, while the mutual fund charges 1.5% fee, why not switch ALL??? Unless you found a superstar mutual fund manager (and a superstar one year or even 10 years is not guaranteed not to be a dog next year…) I don’t see any benefit in holding on to any of your funds.

The reason I am not thinking about switching all is due to my lack of knowledge. I was told that Mutual funds are less volatile. Having just learned about ETF’s, I am not sure if it would be wise to switch all my investments them.

#199 Truth Machine on 10.31.17 at 5:24 pm

DELETED

#200 Dan.t on 10.31.17 at 5:42 pm

#180 TnT on 10.31.17 at 3:05 pm

haha, in a dark way that was pretty funny but true.

#201 earthboundmisfit on 10.31.17 at 5:58 pm

@LivinLarge ….. his nibs was formerly the MoNR not the MoF.

#202 LivinLarge on 10.31.17 at 6:16 pm

Totally right earthbound, totally right. Still I was right about his oversight of CRA wasn’t I? And either way, he has a hell of a lot greater knowledge base where it counts than I do.

#203 Tony on 10.31.17 at 6:55 pm

Re: #197 SimplyPut7 on 10.31.17 at 4:55 pm

I don’t see the Bank of Canada rate going above 1.00 percent in 2018 or in 2019.

#204 Kimmy on 11.01.17 at 1:17 am

“The problem is you think you have time,” -Buddha

This rings so true for me now. My husband died at the age of 55 this past February after a brief yet courageous, 5 month battle with kidney cancer. I am a 44 year old widow and my 4 sons and I miss him dearly. He shared with me not long before he passed that he wished he had done so many other things with his time instead of always trying to “get ahead”. It really bothered him that he had been constantly preoccupied with having enough money. His time ran out long before his money did and he never got the chance to retire. Take time to do what you love with the people you love. Not one of us is guaranteed tomorrow. I would’ve lived out the rest of my life in a cardboard box with my husband if it meant keeping him alive. Blessings to all of you.

#205 Braj on 11.01.17 at 12:54 pm

#5 None on 10.30.17 at 6:34 pm
“…focus on issues like gender equity, sexual harassment and climate change. Apparently there’s nothing worth marching about, anymore.”

Coming from an overly privileged (by birth, not by anything you ACTUALLY did yourself) man this is nauseating.

***

Privilege? Jesus Christ, that word is nauseating nowadays. What privilege? Because he was born? Everyone has unique struggles and challenges in their lives, why level the playing field for you losers who can’t take the responsibility of their own lives on themselves.

#206 Braj on 11.01.17 at 12:59 pm

#26 Single MGTOW on 10.30.17 at 7:08 pm
I’m waiting until the Statute of Limitations is passed for my credit card & line of credit debt that I owe to Bank of Montreal (BeeEmMo). I told their collection agency today to shove that debt…..

Mark Silverthorn told me that large creditors only sue if they know the debtor owns an asset like a car or real estate.

He also advised me that even if I was sued in court, it doesn’t guarantee that BMO will recoup a penny from me.

He also told me that I should save my TFSA at a financial institution in Quebec or New Brunswick.

Mr. Silverthorn also assured me that if I open a TFSA or savings account in another city, I am technically immune from garnishment because a 1982 ruling set a law that the creditor needs to locate the SPECIFIC bank branch that the debtor is a client.

I am not dating a woman from Toronto ever again.

***

Oh poor you. Maybe you don’t know how to pick em.

Better leave Toronto or don the LGBT flag and hop on the other bandwagon because I don’t see how you’ll manage.

#207 Nuke on 11.01.17 at 4:49 pm

Regarding early CPP. Having just hit 60, I can start CPP. However @ 65 I will have max CPP years to knock out non max drop off years from my ill spent youth. The PRB has no survivor benefit for my non-earner spouse and our parents made it into their 90s maybe beyond. I have RRSP room to roll the full CPP over to a spousal RRSP for splitting, especially since I will likely work forever. So a few things to consider.

#208 Don on 11.01.17 at 7:56 pm

CPP @ 60 vs later: Got my age 59 CPP estimate from Service Canada the other day. They tell me I’m completely average (about $650 per month at age 65). Ran a PV calculation, using ages 92 and 82 as life expectancy, 5% discount rate, annual amount of CPP received at end of year. Starting at 60, 65, or 70. Discounted the age 65 and age 70 start back to age 60 (in a second stage).

For the age 92 scenario (per a BigLife life expectancy calculator with healthy habits inputs), age 60 PV was $80,546, and the age 65 and 70 PVs were pretty much identical ($91,384 vs $91,395). The long life expectancy favours the age 70 start, but even so it’s not enough to overcome an earlier start at age 65.

For the age 82 scenario (parental deaths), the PVs for 60 / 65 / 70 are: $67,092 / $70,345 / $61,541. Earlier death is not a friend to starting too late.

So I still lean toward an age 65 start. Garth’s “cruel” comment noted.

#209 FreeBird on 11.02.17 at 8:23 am

#164 Oct 31

Thanks for the laugh. You seem to take the same view to cars as my spouse and I do. One of us is waiting for their retirement Porsche/ Mercedes ..used of course. ; )

#167 Oct 31 Livinlarge

Free Bird, you’re deep in the weeds.
————
Good points. Thought it was a good topic for expenses. Years ago I learned the theory of looking at every dollar spent as money invested. It’s great for curbing impulse spending and teaching those younger to value their money. My spouse and I co-own a sml biz corp. and paid as employees like our staff. Our CA has always advised claiming mileage but the lease vs buy topic seems to be ongoing but interesting…well to some. If my dad were alive he’d say at some point just choose the car you want and have enjoy. My other half would gladly shift the debate to dream car vs lease or buy (for my dad of course!)