Surprise!

Arthur’s a typical teacher. Owns a house but not much more. “My wife has an investment portfolio but it isn’t a lot,” he says. “To be honest, my pay has been used to pay off bills and the mortgage over the decade we have been married while she was on maternity leave for our two kids. We both have TFSAs but I just recently started investing in it. I have so much room I don’t think I will ever be able to max it out.”

Well, teach wrote me because the big 5-0 looms, they want to retire within a decade and wonder how they can prepare.

“We are not willing to go into debt – read as dip into our home equity – to borrow for investments as the next 2 – 3 years will likely be volatile with people learning to live with the virus and its impacts on our health and the economy.

“I know your advice will be sound, and I trust that you will give me an answer that will most likely lead to a conversation that I don’t want to have.”

So why are they typical teachers? Simple. So many people with DB pensions (defined benefit) truly believe they can skate through life spending all their take-home pay, saving nothing in a retirement fund, and living happily ever after. Of the countless classroom people I’ve encountered over the years, few have financial reserves. All of their trust, plus the rest of their lives, has been placed in the hands of a faceless pension administrator.

But teachers have great holidays. The locals in Cancun and Varadero are so grateful.

So what can go wrong?

First, pension incomes are way less fulsome than most people understand. For example in Ontario a long 30-year teacher career landing you in the $85,000-per-year position would result in a pension of about $50,000. That’s pre-tax, of course, and it’s a lot better than many people enjoy. But this represents a 41% drop in income. So the question is simple: if you made $85,000 a year and saved nothing, how do you live on $35,000 less?

Some people think being retired means spending little, staying home knitting scarves and counting the cars driving by. But, since 65 is the new 45, people at this age are active and alive. Travel, hobbies, toys, entertainment, renos – it all costs big. In fact a lot of folks end up spending more in retirement than when sitting in the workplace all day. Fail to budget carefully for a fixed-income life and you might end up selling dope or parking buggies at Walmart (equally distasteful).

Second, leaving your entire financial future in the hands of others is, well, a leap of faith in this altered world.

Here’s an example.

Four days after the virus whacked financial markets, driving equities into the quickest bear market on record and crashing interest rates, regulators in Ottawa panicked. On March 27th, this letter was sent to the administrators of DB pension plans across Canada:

As a result of the COVID-19 crisis, OSFI has made adjustments to its policies to protect the interests of pension plan members and beneficiaries and to allow administrators of federally regulated private pension plans to focus their efforts on addressing the many challenges posed by this crisis, including its impact on financial markets.

Transfers and annuity purchases are being prohibited at this time to protect the benefits of plan members and beneficiaries, given that current financial market conditions have negatively affected the funded status of pension plans. The payment of pensions to retirees and other beneficiaries is not impacted by the freeze on portability transfers and annuity purchases. We will review this temporary measure in the coming months as we continue to monitor the impact of this crisis on defined benefit pension plans.

While this stunning directive did not reduce payments being made to former teachers (and civil servants), it immediately froze the commuting of pension assets to those planning on taking a lump-sum amount for retirement. As we’ve yammered about in the past on this blog, liberating pension money so you can control it, manage the tax exposure and pass it on to your family is generally an excellent idea. So imagine the impact of this outta-the-blue stunner to those who’d planned on such a move.

(The directive was reviewed again in May, recognizing the over-reaction. Now  those within 10 years of retirement age may partially commute their pensions – if allowed by a specific plan. Big relief for many people.)

Here’s the key point: when you don’t control your own financial future, be prepared for surprises. Public sector DB pensions have been the envy of society for decades, but when a temporary bout of stock market willies cases this reaction, anything can happen:

The effect of the COVID-19 pandemic on the financial and economic environment has resulted in market volatility. This has made the impact on the solvency ratios of defined benefit pension plans difficult to gauge, and the Superintendent came to the view that transfers or annuity purchases from defined benefit pension plans could impair their solvency.

So, Arthur, here’s what you don’t want to hear: having almost all of your personal financial wealth in one asset (your house), with no Plan B for income and no mechanism in place to supplement cash flow during two or three decades of retirement is a gamble. You should spend every day fixing that. Do a monthly budget to chop spending and funnel enough into savings to at least max out both TFSAs. In retirement, cash flow from these plans will not count as income and further erode CPP and OAS payments – unlike RRSP money.

Invest the TFSA funds into equity-based growth assets. Ignore market volatility, the virus or your own tepid emotions. The world will come out of it pandemic phase in a blaze of growth, and you should take advantage of it. Tapping into some of the home equity is far from a bad idea. Loans are ridiculously cheap, interest is 100% deductible from taxable income (for non-registered investment accounts) and you need only service that debt. Repay it when you cash in the assets you financed.

Now do a realistic plan for after work. If you save nothing now, you’ll probably want to replace your full income. A $40,000 annual shortfall, for example, means you need about $600,000 working for you in a balanced portfolio. You have ten years to get there. Stop reading. Start doing.

About the picture: “Bonjour de Montréal Garth!” says Martin “My girlfriend and I have been happy readers of your blog for many years (thanks for everything) and we thought we could share this picture taken this afternoon on Papineau street in Montreal. Merci pour tout et au plaisir de vous lire encore pour de très nombreuses années!”

 

156 comments ↓

#1 jess on 08.10.20 at 1:55 pm

Where The Latest COVID-19 Models Think We’re Headed — And Why They Disagree
Understanding the underlying assumptions that each model is currently using can help us understand why some forecasts are more optimistic or pessimistic than others.
https://projects.fivethirtyeight.com/covid-forecasts/?cid=rrpromo

#2 Mattl on 08.10.20 at 1:57 pm

First, pension incomes are way less fulsome than most people understand. For example in Ontario a long 30-year teacher career landing you in the $85,000-per-year position would result in a pension of about $50,000. That’s pre-tax, of course, and it’s a lot better than many people enjoy. But this represents a 41% drop in income. So the question is simple: if you made $85,000 a year and saved nothing, how do you live on $35,000 less?

————————————————————-

Well with a lifetime of rent payments, it would be hard to live on that for sure.

But if you have a paid for house, that frees up 25-35K in pre tax income. Or, you could sell the house.

Literally every teacher I’ve ever known personally has paid off the house and lived pretty comfortably in retirement. Sure they don’t have a lot of savings but they have pretty good outcomes. 50K annually is the equivalent of 4% draw down on 1.3MM. And that;s just for one person in the family.

I wouldn’t want to live on 50K but with a paid off house it is as much or possibly more then what they got on with pre-retirement.

You miss the point. Why not live as well as possible? – Garth

#3 AlltheWay on 08.10.20 at 1:57 pm

Another great post, Garth.

Quick inquiry:
I started putting funds into my TFSA- B&D portfolio- since its inception in 2009. For 2020, I contributed $6k. Checked my contribution room- currently $15k, and plan to max it out before the year ends. Will I incur a penalty by doing so? Will appreciate your dawg thoughts.

No. As with RRSPs, contribution room accumulates. You can use it any time. – Garth

#4 KNOW IT ALL on 08.10.20 at 2:07 pm

DELETED

#5 crowdedelevatorfartz on 08.10.20 at 2:12 pm

A friend of mine was going to retire in 2010 with his union pension providing about 60% of his previous income.
2009 melt happened.
The union pension was hammered.
All member were sent a letter informing them of drastic cuts in pension payouts due to the markets down slide.
Retirement delayed.
Such is the life of the majority of private sector, private pension taxpayers.

Public “servant” retirees take note.
There will be zero sympathy from the taxpayers of Canada who subsidize your guaranteed pensions if the govt claws a percentage of your pensions back..

#6 Marco on 08.10.20 at 2:14 pm

Poor Arthur, 85,000 a year and if I ask him to answer 7 x8 by heart, he would use a calculator.
Such great educational specialists. Unions protect such no good, but times change quickly. It is no longer enough to be a manager in this country if you only speak Canadian or turdonto English…
Trade school is an answer, because medical school is too hard for: Baby you can be whatever you want….

Time you left this blog. Bye. – Garth

#7 crowdedelevatorfartz on 08.10.20 at 2:15 pm

@#181 Honest Realtor

ahahahahaha.

Honest.

ahahahahahahahaahahahahaha

#8 SOMETHINGS UP!! on 08.10.20 at 2:16 pm

BUY low
SELL high
Have cash on the side to capitalize on opportunities.
That’s how you make money.

#9 Mattl on 08.10.20 at 2:17 pm

You miss the point. Why not live as well as possible? – Garth

That was my point. I think on a 70-85K base salary, expecting to have 150K in retirement is probably not in the cards. On that salary, with a DB, paying off the home + a few hundred K in the bank is probably a close to best case outcome.

Of course he should top up his TFSA and not doing that was a big miss. And I wouldn’t want to live on that, which is why I’m not a teacher. Their pensions are great but their working year incomes are not that impressive IMO.

#10 Captain Uppa on 08.10.20 at 2:22 pm

You miss the point. Why not live as well as possible? – Garth

—————————————————————

They are living as well as possible, just before retirement.

#11 Stone on 08.10.20 at 2:44 pm

Most of those federally regulated private pension plans are managed as balanced and diversified portfolios with a good portion of the mix made up of index ETFs.My own DB pension is a 60/40 mix and had a nice surplus in place (I’ll say the only piece that I don’t like about it is the 27% portion allocated to “alternative strategies” which technically is infrastructure investments). Considering how most B&D portfolios have rebounded back to break even or higher (my own personal B&D portfolio as of last Friday was +4.28% YTD), I can’t see this freeze lasting much longer. Also, based on tne OSFI website, the pension administrator will, once the freeze is finished, have to calculate the commuted value based on the request date plus interest.

Is this just a nothinburger?

Some days I truly wonder if the research and effort put into this blog is worth it, when the reaction is ‘nothingburger.’ Maybe it’s time to leave you to your own wondrous intellect, while I move on to something more useful. – Garth

#12 Steve on 08.10.20 at 2:47 pm

We spend out youth chasing money, and then we spend our money chasing youth. 50 k guaranteed, looks pretty good if you have place to live. Get out of big city, do your own maintenance, cooking and cleaning. Riding a bike is free. Hopefully you go before they stick into a home.

Cleaning and bike-riding as retirement goals? – Garth

#13 Overheardyou on 08.10.20 at 2:55 pm

#9 Mattl on 08.10.20 at 2:17 pm

——–

I think proper budgeting and self discipline is most important for the teacher or anyone wanting a better financial future.

A person with a 70K salary that saves 3% of their income ~$2100 /yr and invests it monthly they’d atleast get $150K in 30 years with the target of a 6% return. So one less annual vacation, and they’ll have a nice chunk of change come retirement.

The good news is good habits usually build up, so once said person sees their portfolio is growing. They tend to want more growth and may shift increasing their investment amounts over the years possible growing their saving exponentially. This would not happen if they don’t even start with the first deposit.

I think the most important part is to have a plan and stick to it. Automated deposits are a must. Also, just like Mr.Garth says, set it and forget it.

#14 Linda on 08.10.20 at 2:57 pm

Yes, there is envy at public sector DB plans. Despite the much quoted $5,000 per month example, the vast majority of DB public plans pay one heck of a lot less to the vast majority of recipients. This is because these plans work on the ‘hockey stick’ principle. Until one has paid into the plan for 25 years or longer, the amount received by the retiree is frankly the diddly of squat. Most plans do not pay all that much until one has paid in for at least 30 years. This is why the DB plan I’m in – municipal, not provincial or federal but still considered a very good DB plan – pays an average pension of – wait for it – $18,000 per year. Before tax. Which is why I’ve done my best to make my maximum RRSP contribution every year, as well as maximum TFSA & invest money too. One more thing. The plan I’m in is specifically NOT guaranteed by the province, aka ‘the taxpayer’. Any shortfalls or deficits are the responsibility of plan members to cover. As for commuting, I think it can still be done, but my understanding is one can only commute the employee portion, not the employer portion. They put that rule in about a decade ago, because too many retiring employees were commuting & they wanted to put a stop to it. It worked, too.

#15 I'm back on 08.10.20 at 2:59 pm

My balanced portfolio has just surpassed pre covid peak. Hooray. Never sold anything. Thanks Garth. Had lots of cash, but decided not to risk it. Should have put it on Tesla in hind sight. Lol. This could all change in a heart beat if Trump doesn’t win 2020.

Also good. Nanaimo SFDs are up 3% June to July. They are up over 30% since we bought here a few years ago. That tide never went out and my pants are still on. Love Van Isle. Orcas, oceans, islands, rivers, lakes, parks and more (like red necks).

It seems like everyone has decided to come to Van Isle this summer. Alberta plates everywhere and ferries at capacity. No wonder Alberta is doing so poorly – y’all don’t understand “stay local” i.e. speaky english sum?

Thank God for CERB for 15y olds. The money has actually landed right where it needed to. These guys have no concept of saving. They have blown everything on new phones, laptops and more. They kept consumerism alive for us and helped prop things up.

Now as long as Trudeau keeps building cat doors for the Gov Gen we should all be okay.

#16 Alex on 08.10.20 at 3:01 pm

DELETED

#17 CJB on 08.10.20 at 3:05 pm

Why would someone ever retire? just take a holiday if you need a break. People that stop working are pathetic. If a person is able to enjoy an active lifestyle; hobbies, trips, socializing, why not work as well.

#18 Oracle of Ottawa on 08.10.20 at 3:11 pm

Well said. When I divorced and we sold our house I invested my share of the money in etf’s. Some of which pay pretty good dividends. I am retired with a moderate pension (less than the teacher’s). The income earned from my investment pretty much pays for my rent. The pension money is just gravy. I have no worries.

#19 DT on 08.10.20 at 3:13 pm

“In retirement, cash flow from these plans will not count as income and further erode CPP and OAS payments – unlike RRSP money.”

Can you explain how RRSP money reduces CPP payments? did you mean GIS?

#20 ElGatoNerodeYVR on 08.10.20 at 3:13 pm

So let’s start with saying that I agree that some action is required as to not count on only the pension income.
Second I am quite surprised as to the spending expectations that people have.
Acknowledging that we are all different for me a yearly 75-80k pretax for a 2 peoplekind couple is plenty with a house and a car payed off ,even here in Vancouver. Budgeting 20k for travel within that amount as well.
So work pension + CPP + OAS should get a couple close enough.
I would stress the point that it all starts at budgeting. How much do you spend now and on what ,then make a post retirement budget. Figure out Needs vs. Wants and decide on a middle ground .
At needs I personally have: housing,internet,prepaid cellphone, groceries + household necessities and a very small travel budget. All else is wants.

#21 Right on #17 on 08.10.20 at 3:21 pm

If you’re waiting to retire to live your lives, forget it. I have taken a break in my 40s and if there’s one thing it has taught me, it’s never to wait for retirement at 65. You’ll be on fixed income and worried about spending all the time.

I totally agree with #17 CJB … keep making money, and enjoy what you do every day!

#22 Mattl on 08.10.20 at 3:26 pm

#13 Overheardyou on 08.10.20 at 2:55 pm
#9 Mattl on 08.10.20 at 2:17 pm

——–

I think proper budgeting and self discipline is most important for the teacher or anyone wanting a better financial future.

A person with a 70K salary that saves 3% of their income ~$2100 /yr and invests it monthly they’d atleast get $150K in 30 years with the target of a 6% return. So one less annual vacation, and they’ll have a nice chunk of change come retirement.

———————————————————–

You make my point for me. 150K is not nothing but its close, that draws down at 600 per month. That will get you a single bedroom on the downtown eastside, or a new Hyundai every 5 years.

Teachers have an income side problem. If you make 70K, and have a family, your rent or mortgage alone is going to wipe out 30-40% pre tax income, easy.

There isn’t enough there unless you live like a pauper, stay single forever, eschew kids, or have a strong second income. You just aren’t saving a few mil by retirement on 70-80K, not with a family, and today’s cost of living.

So what they should do is pay off a modest house, load up on TSFA and voila, good to go.

#23 The Limited Sage on 08.10.20 at 3:28 pm

Thanks for this, Gartho.

If there’s a DB Pension in play and the TFSA is already topped up, is the RRSP the preferred next landing destination, or a Non- Reg?

#24 The Woosh on 08.10.20 at 3:30 pm

That’s $50,000 pre tax and then CPP and OAS on top of that (with whatever gets clawed back?) Or is CPP and OAS already counted in that $50k?

#25 crowdedelevatorfartz on 08.10.20 at 3:34 pm

@#17 CJB
‘People that stop working are pathetic.”
++++

Perhaps…..
After spending the better part of 45 years listening to intellectually bereft coworkers, managers and customers prattle on needlessly …… i deserve a break?

#26 Leo Trollstoy on 08.10.20 at 3:39 pm

Teacher pensions are sad

#27 Mean Gene on 08.10.20 at 3:48 pm

Arthur is taking a risk not noted in this well written posting today (mandatory suck up completed).

If he passes away before wifey, his survivors benefit paid from his pension plan will be significantly reduced, including his CPP.

I am federal sniveling servant and contribute about %10 of my gross income to my DB plan, so on the surface if you take my other workplace expenses including my CPP, union dues, parking, EI contribution etc the difference between my net income now and in retirement is not drastically different, even after 65.

I agree 100% with Mr T everyone needs some extra cash stashed (mad money) to enjoy the last 20 – 30 years on the planet, rather than finding lame ways that don’t cost much to spend your retire years.

#28 Bankish on 08.10.20 at 3:56 pm

When Arthur reaches age 65 would he not receive his CPP and OAS that would mean almost $20,000 more added to their annual income?

#29 david on 08.10.20 at 4:02 pm

But even TFSA`s are not a guaranteed and well controlled future stream, no? it is a government program and the tax treatment of this income COULD CHANGE. Don’t be shocked if at some point in the future folks with decent income and large TFSA`s have to include some portion of their TFSA into income.

Unlikely, but so what? Stop contributing? What is your point? – Garth

#30 Jimmy Zhao on 08.10.20 at 4:17 pm

Pensions all backed by taxpayers, teachers have nothing to worry about.

#31 Roial1 on 08.10.20 at 4:18 pm

bike-riding as retirement goals? – Garth

It really is an option—-IF you ride in Portugal, Norway, Denmark, Holland, Austria, Germany, etc. etc. etc.

Years ago we met a couple from Edmonton while on a bike hike in Germany. Since we (they and us) have shared many tours and been well rewarded with the outcomes. Next year we plan to visit the Yukon together.
All I am trying to say, Garth is “Don’t knock it till you try it. Cycling can do wonders for your retirement.

Oh, and thanks for your sharing of financial knowledge.
We have put many of your ideas to work and have been very grateful for the results. We now have more in our retirement finances than we started with. (9 years after retiring) AND IT IS YOUR FAULT! (tks.)

#32 bob on 08.10.20 at 4:19 pm

Hi Garth,

Expenses *should* go down, because most people will have a mortgage paid off and kids expenses gone, and they save on work commuting costs.

I’m in my 40’s, and already, the cost savings from daycare and afterschool are substantial. Add another two decades and hopefully no failures-to-launch, no more extra mouths to feed.

Our yearly family vacations will soon just be the two of us.

Am I missing something?

#33 Retired at the big six o ... on 08.10.20 at 4:21 pm

Worked at the same job for 40 plus years and watched it slowly degrade. Feel sorry for those who are left there now. Seems like most of my friends say the same about their long term employers too. 604 commute was no fun either. Got a good pension. House paid off and CPP for both me and the misses. Garth looking after a chunk of change that I never even touch. Very fortunate to have great health too … hope the younger generations get the same opportunities but not looking that way. Plan early.

#34 ImGonnaBeSick on 08.10.20 at 4:22 pm

Some days I truly wonder if the research and effort put into this blog is worth it, when the reaction is ‘nothingburger.’ Maybe it’s time to leave you to your own wondrous intellect, while I move on to something more useful. – Garth

—-

It’s worth it. Many of us appreciate your hard work. Stone’s pseudonym literally describes that which fills the space between his ears. I skip his comments mostly unless they’re commented on. You’re a good man Mr. Turner.

#35 AR on 08.10.20 at 4:25 pm

Aren’t we all equally impacted when/if the markets plummet? How is a DB plan any less safe than a B&D portfolio? I would think it’s actually safer. Larger amounts of money invested and legal requirements to keep them funded.

My retired BC teacher friends have large and (seemingly) secure incomes.

#36 Faron on 08.10.20 at 4:25 pm

#24 Ryan Lewenza on 08.01.20 at 1:24 pm

Sorry I missed your response Ryan, I was on vacation. I just read it and appreciate your analysis. I wonder too if we’ll see an oil price spike when the economy really snaps back and NA production hasn’t ramped up yet as happened after the GFC.

#37 Post on 08.10.20 at 4:27 pm

So where’s the house? Kitsilano or Saskatoon?

#38 Katherine on 08.10.20 at 4:29 pm

Retired business teacher… over 32 years in classroom. Salary in last year $94000 and pension started at $53000…indexed. After taxes,
my net income was about a 30% decline as didn’t need to be paying over 12% into pension, Ltd, cpp, union dues. Also, many expenses such as gas and car insurance are reduced in retirement. I always maxed my rrsps and
maxed my tfsa at retirement. House is paid for and have extra cash for vacations, dinners out, live shows (of course precovid), $ to help contribute to grandson’s
resp, house renovations, etc. I also took cpp at age 60
as per Garth’s recommendation and invest it.

Re Bankish, teachers have a top up on their pensions until age 65. Pensions are reduced then so OAS more or less makes up the difference.

Yes, many teachers do count on only their teacher pension in retirement. I tried to advise the young ones during my senior teaching years to take advantage of rrsps, tfsas and resps. Hope you have many teachers reading your blog today Garth.

#39 Faron on 08.10.20 at 4:30 pm

#90 crowdedelevatorfartz on 08.03.20 at 9:29 pm

@#77 Nonplused

Faron has been noticeably absent while the fake “Sail Away” has been bragging about his wealth……….figure it out.

Or as Ponzie suggested….

ITS A FULL MOON

I’m offended crowdie. Looking at the impersonator’s writing, I’d like to think that it is clear the fake SA wasn’t me. Plus, I had way better things to do last week (running up and down mountains, swimming in lakes, snuggling the hound, swatting mosquitos, seeing new places and things, being close with my partner etc.) than comment here.

#40 Burnaby Boy on 08.10.20 at 4:39 pm

“People that stop working are pathetic.”

I certainly was but I made a full recovery. My DB pension -since we are on the subject – is $17,000 per annum, after 28 years of changing adult diapers ( I have a wonderful garden). As the original clientele faded away to be replaced by “druggies” and such I just couldn’t deal with it. But, hey! For those that want to keep working they are always looking for volunteers.

#41 Ronaldo on 08.10.20 at 4:42 pm

#17 CJB on 08.10.20 at 3:05 pm
Why would someone ever retire? just take a holiday if you need a break. People that stop working are pathetic. If a person is able to enjoy an active lifestyle; hobbies, trips, socializing, why not work as well.
——————————————————————
Why would someone ever retire? Well CJ, not everyone works in a dreamy job and there are many other reasons why people take retirement early. I retired at 54, 20 years ago, and would recommend it to anyone that is able to. And I had a dreamy high paid job to boot. With everything that I do, I can’t imagine having the time to work as well. No life like it.

#42 The West on 08.10.20 at 4:46 pm

You’ve pointed out a very critical undertone to Canada’s doomed economy….unfunded liabilities is merely passing extravagant living onto the children and grandchildren in the family.

As a small entrepreneur who has been crushed by Covid – I see no future. Still have some savings but I cannot help looking back at the seventeen years of my life I have paid taxes, how much of that money has gone to benefit me? I have no kids, (pay for the school system), have kept myself healthy (pay for healthcare), and have saved and invested into my future. The doors are closed on me right now and I have been floating along using my equipment to make side cash (and I’m not apologizing, Canada’s authoritarian bureaucracy can stuff it) – I have taken not a cent in government handouts despite my quality of life drastically falling down.

And in the end, at the ripe age of 34 – I’m going to be on the hook for all of this….as you’ve said, accurately, many times: “you thought Canada’s taxes were bad up until 2020?”

We are entering a lost generation here….I really don’t know what else to say. It is regrettable that the boomers didn’t have the foresight their depression parents had to leave something for the future. They were owed and entitled of course, they “earned it”…..lol. It’s a giant ponzi scheme and the Gen Xers on have been totally left to dry before even having a chance.

How can this cycle end without anything but total reset? AND if it does end this way – we’re letting the irresponsible citizens of this country reap the rewards of ignorance while those of us who worked hard and lived responsibly fall into the dust bin?

I had been hoping for deflation but I went and got groceries on Saturday evening – the tide is already rising…..

#43 Dr V on 08.10.20 at 4:48 pm

Cleaning and bike-riding as retirement goals? – Garth

Shhh…..it will be our little secret……

#44 Bill on 08.10.20 at 5:00 pm

I closed one of my companies to prevent T2 from pissing away or stealing ANYMORE of MY tax dollars.
From my fav guy….we have been had again and again and again:

How can anyone trust Canada’s established political parties? They’re corrupt to the core.
The Liberals, Conservatives, Greens and NDP all claimed COVID-19 emergency wage subsidies in the spring to pay their workers.
They cited major drops in donations due to the pandemic.
But the National Post recently checked their financial reports, and the drops aren’t unusual after all.
They kept the money anyway.
The morally and intellectually corrupt Conservatives said the subsidy allowed them to keep their 60 full-time and part-time total staff across Canada.
We at the People’s Party did not ask for taxpayers’ money.
We are RESPONSIBLE.
We cut our salaries and took some exceptional measures to ensure that our finances remain sound.
And we didn’t have 60 employees but only 5, including me, to organize a national party.
There is an enormous amount of work to do to make sure we are ready if a snap election is called in the coming months.
This week, we decided to hire two new employees to give a hand.

#45 Ronaldo on 08.10.20 at 5:01 pm

#42 The West

And in the end, at the ripe age of 34 – I’m going to be on the hook for all of this….as you’ve said, accurately, many times: “you thought Canada’s taxes were bad up until 2020?”

We are entering a lost generation here….I really don’t know what else to say. It is regrettable that the boomers didn’t have the foresight their depression parents had to leave something for the future. They were owed and entitled of course, they “earned it”…..lol. It’s a giant ponzi scheme and the Gen Xers on have been totally left to dry before even having a chance.
—————————————————————-
Sure, blame the boomers, typical millie. The GenXers that we seldom hear about are doing just fine, my sons included. Out of the house and on their own at 18 and now very successful businessmen. Never lost any work over the Covid thingy. Busier than ever.

#46 @learn2investkid on 08.10.20 at 5:01 pm

I am with Garth in this. It’s about controlling your own money and not relying on a pension administrator. Even DB pensions from global corporations like GM and GE once seemed like a sure thing aren’t secure. Educate yourself.

#47 willworkforpickles on 08.10.20 at 5:01 pm

Divorce is one predictable side effect in a recessionary fallout. This recession will surely see an unprecedented number of divorce filings with the current never seen never experienced before stay at home work from home transformation in society. Too much close contact stress with little room to unwind. The domestic strife building this recession will lead to many a marital meltdown.
Those who have experience with distress sales due to a divorce liquidation have often succeeded in acquiring this kind of property through low ball offers.
Unheard of in today’s market ?
Such deals won’t transpire early in the recessionary fallout to come but they will eventually come.
Distress sale discounts will come due to divorce liquidations in conjunction with the rest of the recessionary side effects expected – mainly mortgage defaults (150000 CMHC estimated potential Canadian defaults and foreclosures) on the horizon.
Once the blood letting begins and the next crop of greater fools have come, needlessly recklessly over-paid and have run out…the vultures will begin to circle overhead then scooping up deals at pennies on the dollar at the height – or depth of the coming correction.
…and if Trudeau keeps his big nose out of it like he should, there might be a glimmer of hope left for an eventual return to price normalcy…..but for a few short years.

#48 Inequity on 08.10.20 at 5:02 pm

#11 Stone

Garth – the research and effort is never worth it…
You are always going to have to deal with people who are stupid and not smart enough to know it.
But the effort is appreciated and not lost on everyone. Hopefully that’s enough for you.

#49 Stone on 08.10.20 at 5:04 pm

DELETED

#50 Ace Goodheart on 08.10.20 at 5:05 pm

There are three things certain in life:

Death, taxes and a teacher’s pension.

Normally I would agree that it makes sense to pull your money out of a corporate plan (having watched how CEOs view pension money when they are bonusing themselves out of company funds, just prior to having the company declare bankruptcy).

Corporate looting is real, and it is embodied in the pre-bankruptcy executive bonus package (thanks for running the company into the ground, here’s our salaried employees’ pension fund money to buy yourself a yacht and an island in the Bahamas to enjoy it on).

However, there are a few DB plans that I would not commute. The teachers is one of them. Another is OMERS. One more than comes to mind is HOOP.

Every married person with a DB pension who can commute, should consider it. Otherwise the benefits die with you, or are significantly diminished, rather than becoming the property of your heirs. – Garth

#51 Ace Goodheart on 08.10.20 at 5:13 pm

RE: Turner Nation Elon Musk comments re: artificial intelligence and chipped humans:

You have to understand Elon.

He is a promoter. He is very good at getting government money. He is a master at selling stock (and recently has developed a talent for selling bonds).

But technologically this guy does not do well.

When the “model 3” was first going to be produced, he decided to spend a lot of money building the world’s first fully automated automobile assembly line. It was supposed to have robots that moved “so fast you would need to calculate for air resistance”.

It was a total flop. He ended up moving production out to the parking lot under a tent (in California valley summer). The robots didn’t know how to weld. The conveyor belt system didn’t work. Everyone had told him it would not work. You need humans to weld, with robot assistance. Some parts of auto assembly are better carried out by people.

His batteries are built by Panasonic, a Japanese company.

He does not write his own software. He does not design his hardware. He constantly tells us that his cars are on the cusp of being self driving, when they are not. Tesla claims to build pick up trucks and tractor trailers. They have never sold a truck in the existence of the company.

When Elon talks about something, he is not talking about something he is doing. He is talking about something he thinks someone else will be able to design and build for him.

So when he talks about AI and putting micro chips in people, and flying to Mars, I am just like “OK, Elon, but do the people who build your tech for you actually tell you they can do this?”

Because they are the people who would be doing it. Not him.

#52 James on 08.10.20 at 5:13 pm

hey Garth, guess who’s comin’ back?

Your favourite banker dude!

https://www.bnnbloomberg.ca/trudeau-taps-carney-for-help-in-crafting-covid-19-recovery-plan-1.1478062

This will be good, huh!

#53 Billy Buoy on 08.10.20 at 5:15 pm

Call me a loser if you like Mr. T compared to many here but with annual expenses of $30K a year, I live quite well.

Never worked more than 32 weeks a year self employed, spend 4 months a year south, lived within my means, always enjoyed a classic car and a daily driver, bought high end like new clothes for pennies on the dollar at Sally Ann, never missed a sunset, did without NOTHING, enjoyed tons of time with my child now a lawyer. ZERO STRESS. Even had time to do my own cleaning 1 hour a week on my own time schedule. Keep fit by cycling 30kms daily.
My god THE HORROR of being happy and not sucked into the overly materialistic world.

I laugh at the majority who make far more and have far more stress and usually debt that I ONLY had for a few years when enjoying home ownership.

ZERO Regrets. Give me $50K a year and I’d only waste the difference from $30k or donate it to help others.

#54 kommykim on 08.10.20 at 5:16 pm

A buddy of mine has a DB plan and was also maxing his TFSA. He said to me one day, I’m a bit worried that my pension will pay apx $500 less per month after taxes and deductions than I earn now. My response was, “You won’t be making TFSA contributions in retirement will you?” and the light went on.
ie: You only need the same net monthly income MINUS what you put away for retirement today.

#55 Mr Canada on 08.10.20 at 5:17 pm

Good Advice. Many teacher friends told me they relied on their DB plan for retirement (guaranteed by the taxpayers) and spent their savings in the summer months travelling to Europe etc. Working in the private sector, I am still in shock they can retire at 55 years of age earning an indexed pension of $55-$60k a year with platinum health and dental plans and still young enough to work part time. Every teacher that retires is basically given a cheque for $1.3 million to draw that pension amount. Its not sustainable longer term so save as much as possible!

#56 Billy Buoy on 08.10.20 at 5:30 pm

Starve the various gold plated (to most) government DB pension plans….

Plan and hide your assets the best you can, live under the radar and get back what you paid into by living on paper close to the poverty line….
Personally I’m too “poor” to support government workers. I will let the middle class do it.

You are either wealthy or poor to be able to reduce taxes in many countries…play the game.

It’s wonderful.

I wish I had swallowed my pride and started years ago when I realized I wasn’t ever going to sacrifice the time to be wealthy or had the brains to figure it out.

And yes, I do sleep as peacefully as Freedom First at night. Best wishes to all.

#57 ElGatoNerodeYVR on 08.10.20 at 5:44 pm

#17 CJB on 08.10.20 at 3:05 pm
Why would someone ever retire? just take a holiday if you need a break. People that stop working are pathetic
=============
Now ,now grasshopper, let’s not do name calling.p ,so I will make 2 counterpoints:
The snarky one:
Some of us actually have a life outside work and better things to do in life than work ,work ,work.,been done done that ..so many other things to do in life
The social responsible one: If we never retire how do we expect the millennials and Z,Y a.s.o to ever move up the ladder into the better paying jobs we are mentoring them for.
So for me it is ..make your money and get out of the way..let others have the same opportunities I had.
If you plan to work till you drop not because you need to but because of nothing else better to do ,that is just truly sad. Go find a hobby, volunteer at a local charity , be an unpaid mentor for the younger generation whatever else floats your boat but please stop working.

#58 tbone on 08.10.20 at 5:48 pm

Never stop working …. lol … f#ck that .
My finanacial planner asked me about 10 years ago why im still working . I was debt free over 30 years ago .
I quit last year after getting fed up with newly hired
managers(outside of the industry i was in) having no clue of what they were doing , thinking their ideas were new and fresh when they were tried and dismissed more than 20 years ago .
Commuted my pension years ago and now have a tax bomb as i have a investment portfolio that generates enough dividends to live off of outside of the rrsp.
Got to start unloading the rrsp while leaving enough room so i dont lose my OAS coming up .
Dont miss working one bit . 40 plus years is enough.

#59 Midnights on 08.10.20 at 5:49 pm

DELETED

#60 MF on 08.10.20 at 5:50 pm

#55 Mr Canada on 08.10.20 at 5:17 pm

Not sustainable??

Here is the 2018 annual report from the Ontario Teachers Pension fund:

https://www.otpp.com/documents/10179/803025/-/3cf8ee83-e3d0-40a6-a3d7-954ff32695c9/2018%20Annual%20Report.pdf

-The fund is worth around a quarter of a trillion dollars.
-They aims for a 10 billion dollar excess of assets vs future liabilities to protect themselves
-Nearly 80% of their gains have come from investments, and not funding

When you think of it like that, the 1.2 million/teacher you mentioned doesn’t sound like much.

Also, here is a small snap shot of the funds investments, so you can get an idea of the level of diversification. This represents .1% of the fund (around 200 millions dollars worth):

https://www.otpp.com/investments/performance/major-investments

Notice the level of diversification.

That fund is incredibly well run and the risk of defaulting is extremely low. Nothing is guaranteed, but barring gross negligence or fraud (unlikely), the OTPP struggling is more likely to come from a serious systemic economic situation, in which case, we are all screwed. Teacher or not it won’t matter.

Conclusion: your friends will be fine.

MF

#61 Dr V on 08.10.20 at 5:51 pm

45 Ronaldo – dont feed the troll.

Everybody has their own story. I see people who have done better financially than me (with seemingly less work), worse than me (with considerably more work) and a whole bunch within that one standard deviation of the mean.

I have noted 3 things that affect the outcome

1) doing the right thing (ie choice of career/job/business/life partner)

2) at the right place (BC, Alberta and Ontario have been right more than wrong so far)

3) at the right time (This is probably the most difficult to
know if it will work out)

There are some great opportunities out there for younger people right now. Problem is many dont see it.
Those that do are generally doing fine.

#62 MF on 08.10.20 at 5:56 pm

#5 crowdedelevatorfartz on 08.10.20 at 2:12 pm

“Public “servant” retirees take note.
There will be zero sympathy from the taxpayers of Canada who subsidize your guaranteed pensions if the govt claws a percentage of your pensions back..”

-Public servants like teachers are taxpayers too. And they pay into their pension funds as well.

Did you think they work for free and are just volunteering their time?

MF

#63 Tom on 08.10.20 at 6:02 pm

50K is plenty to live on and there will also be CPP etc

#64 ImGonnaBeSick on 08.10.20 at 6:03 pm

#40 Burnaby Boy on 08.10.20 at 4:39 pm

I certainly was but I made a full recovery. My DB pension -since we are on the subject – is $17,000 per annum
—-

I always wonder about these things. DB pensions seem so foreign to me. Any idea what you contributed dollarwise to the DB? You can buy an annuity for $250k that’ll yield the same as this…

#65 Gruff403 on 08.10.20 at 6:05 pm

Retired Teacher of two years in Alberta. I worked while my better half stayed home to raise fraggles and volunteer so we raised three on a single teachers salary. Top salary was $97 000. After 33K+ deductions of tax,CPP,EI,Union and Pension leaves 64k to live on. For us that was plenty.
Teaching pension is $44K after 30 years. Add RRIF’s of 15K, Dividends of 2K, CPP of 3K, PT work of 5K. That was only 25 days of work. Taxes for 2019 were $4500. That means with my wife and I each working one day per month my take home pay was higher than when I taught.
House will never be paid for as we consistently tap the HELOC (even retired) to purchase other assets, pay bills and have fun. Due to the DB pension I don’t need to have a paid for home. When interest rates rise I can sell and rent and be debt free when I want.
Once CPP and OAS kick in for both of us pre tax income will exceed $85K.
At these low rates tap that HELOC for $25 000 and keep paying mortgage style payments on the loan. This is an opportunity of a lifetime. Buy equities only and no bonds. Your pension acts like a giant bond.
Look into how secure your teacher pension is? What is the unfunded liability if any? Ontario teachers tried to buy BCE a few years back they have so much money.
Don’t touch your pension. Learn to manage smart debt to help you grow assets. Good luck – retirement rocks.

#66 James on 08.10.20 at 6:11 pm

Shooting at the White House!

Hmmm….who’s missing from the comments section today….?

#67 Bill on 08.10.20 at 6:12 pm

#56 Billy Buoy on 08.10.20 at 5:30 pm

Call me a loser if you like Mr. T compared to many here but with annual expenses of $30K a year, I live quite well.

—-

Totally agree. $50K would be much more than I need.

#68 TRUMP2020 on 08.10.20 at 6:17 pm

SHAME – All these kids getting COVID in the US at school.

We just don’t get it do we, mother nature ALWAYS prevails.

Too many old, rich, spoiled fools think they can stand the test.

#69 WTF on 08.10.20 at 6:17 pm

I totally agree with #17 CJB … keep making money, and enjoy what you do every day!
—————————————————————
For sure, but MANY don’t like what they do and consider work a soul crushing existence after seeing the 4th iteration of whatever management fad is now in vogue. Most companies have significant problems with employee Disengagement.

Buddy just texted me this AM, Mechanical Eng, 55, put in the notice for 2 weeks from today. Had enough.

Lawyer acquaintance musing about shutting down the practice at 58 yr old. Tired of it AND the govt hives off over 54% in taxes.

Many reasons to pull the pin. I love not working and am busy, fulfilled and financially set mainly by following the guidance set out by Senor Turner of beautiful Lunenburg.

For the teacher in todays blog. Sell the friggin house invest the proceeds, rent, and poof financial security.

My (former) salary and current pension mirror the example above (85k salary 50k pension), wife probably the same as yours. The Pension IS fully funded 120% and closed.

We Sold the castle , invested the proceeds, now rent. with investments/pensions/ realize over 220k annually (110k in investments/ 110K pensions including hers and CPP OAS. Not rich but comfortable . Spend 1/2 of that.

The key for us. Live below your means ,stay active, eat well, socialize, invest with diversity, live your life!

So yes, “we keep making money and enjoy what we are doing” we just don’t work…..

Freedom baby!

#70 ImGonnaBeSick on 08.10.20 at 6:19 pm

#51 Ace Goodheart on 08.10.20 at 5:13 pm

You need humans to weld, with robot assistance

—-

Sorry Ace, you’re incorrect here. I’ve installed robotic welding lines in a ton of plants across North America, spot, mig, laser…

Any BIW shop you go into, the only thing operators are doing is loading parts into the assembly lines. Realtively speaking, there are very few people working in the body shop.

Final Assembly, yes that is more labour intensive, but there’s no welding being done at that point.

#71 Don Guillermo on 08.10.20 at 6:26 pm

Vespucci was a Slave Holder. “Vespucci wrote his will in April 1511. He left most of his modest estate, including five household slaves, to his wife.” https://en.wikipedia.org/wiki/Amerigo_Vespucci

Oh, oh … we need to start thinking of new names for North _____, South _______ and the United States of _______ fast.

#72 Nonplused on 08.10.20 at 6:30 pm

Well I for one don’t see Arthur saving $600,000 in 10 years on $85,000/year. His wife is going to have to go back to work.

But you can get by on less in retirement if your mortgage is paid off. Probably can find $24,000/year+ right there. In years past that was part of most peoples’ retirement plans, although a shocking number of people go into retirement with a mortgage these days.

So Arthur’s best bet is probably to pay off the mortgage and then divert all of the same amount of money each month into his TFSA until retirement or it maxes out, at which point he should max out his RRSP (which will be limited by his pension) and then fill up a good ol’ cash account. (Margin accounts are ok if you know what you are doing but I wouldn’t go there. And what is the point of having a margin account if you aren’t going to use margin?) Assuming his mortgage is near done he could realistically get around $240,000 saved up. That is not $600,000 but it is better than nothing. And that combined with not having a mortgage payment in retirement might be enough to maintain a constant lifestyle. Using the same ratio $240,000 would throw off $16,000 a year for a total of $66,000 a year which is only $19,000 a year less than he has now, so he actually might have a bit more spending money assuming no mortgage.

Obviously I am assuming $2,000 a month in mortgage payments, and that it is close to being paid off. All the numbers will change depending how far off my guess was. Also retiring at 60 is a lofty goal for most people but realistically isn’t always a very good idea. My friend took early retirement from the police force after 25 years but immediately went back to work for them as a consultant. That is what typically happens. Better hours but the retirement income wasn’t enough.

#73 Wrk.dover on 08.10.20 at 6:37 pm

Wife’s teaching DBP goes up by CPI -1%, to max 6% /yr.

That works out to only 10% increase oa in last 14 years.

Best strategy during first decades of retirement is to continue saving, until inflation eats that luxury.

So far, saving 1/2 of the DBP has been doable. Using the other 1/2 for travel was getting pretty meager pre-covid. It was about to be re-budgeted to 25% saved /75% for travel.

The savings will be handy when domestic help needs to be hired at the dotard stage.

#74 Nonplused on 08.10.20 at 6:51 pm

#21 Right on #17 on 08.10.20 at 3:21 pm
If you’re waiting to retire to live your lives, forget it. I have taken a break in my 40s and if there’s one thing it has taught me, it’s never to wait for retirement at 65. You’ll be on fixed income and worried about spending all the time.

I totally agree with #17 CJB … keep making money, and enjoy what you do every day!

——————-

This is a true story I kid you not:

My first job out of university was building a bridge in small town BC. After the crew went home me and a more experienced engineer would lay out the site for the next day with survey instruments. A retired 70 year old guy would often wander over and shoot the **** with me as I was more or less hostage to the total station. One day he says to me to me “Well Nonplused, I’m going back to work so I might not see you again!” I was like “Back to work? You are 70!” He says “I’m out of money.” “Why did you retire if you didn’t have enough money? I asked. “Well Nonplused, I’ve been married 7 times. I kind of learned not to keep too much money all in one place.” “7 times!” I exclaimed. “The first one died on me and that kind of got it going”, he said.

He had lots of other good advice that I unfortunately didn’t heed until it was too late. For example “Treat all the women you know well my friend, you never know whether or not you are going to be married to them one day.” RIP old friend. And thanks for letting me use your boat. And for the homemade beer. It wasn’t bad.

#75 Ontario is open for business on 08.10.20 at 7:07 pm

Doug Ford’s phase 3.5

‘Going out of Business’
‘Everything must go’
‘Come back next week, after the fire’

#76 Flop... on 08.10.20 at 7:14 pm

” You should spend every day fixing that. Do a monthly budget to chop spending and funnel enough into savings to at least max out both TFSAs. In retirement, cash flow from these plans will not count as income and further erode CPP and OAS payments – unlike RRSP money.”- Thor Turner.

Mrs Flop was happy doing the RRSP Rodeo for the first little while when we got married, thanks to this blog, I got her on the TSFA Train.

She does both, but still talks more about her RRSP because a guy in a suit does it, as opposed to me doing her TSFA in a loincloth.

I will get Garth’s paragraph at the top tattooed on my back.

That way she can read it every night, as she beats me over the head from behind with a tree branch for messing up the sink.

Love hurts…

M46BC

#77 IHCTD9 on 08.10.20 at 7:17 pm

#22 Mattl on 08.10.20 at 3:26 pm
You make my point for me. 150K is not nothing but its close, that draws down at 600 per month. That will get you a single bedroom on the downtown eastside, or a new Hyundai every 5 years.

Teachers have an income side problem. If you make 70K, and have a family, your rent or mortgage alone is going to wipe out 30-40% pre tax income, easy.

There isn’t enough there unless you live like a pauper, stay single forever, eschew kids, or have a strong second income. You just aren’t saving a few mil by retirement on 70-80K, not with a family, and today’s cost of living.
—-

I know it’s a personal decision, but IMHO, these days – a good solid committed marriage makes all the difference.

A crap marriage (ending in divorce) is a disaster – and it’s statistically a 50/50 chance you might get flayed.

It’s a tough go today for single income earners, even 6 figure ones. You pretty much have to choose between a house or saving for retirement unless you’ve got one of those golden government DB pensions. Even then, you’ll need to be in the upper echelons of the civil service to swing home ownership alone and still retire in comfort.

The Millennials actually have this figured out. Among the Mills, marriage rates are dropping, but so are the divorce rates. IE – they are being careful, and the resulting marriages seem to be stronger as a result. A new class of high earning dual income families is being born. For the first time ever, educated Women are more likely to be married than their uneducated counterparts.

For us, a solid marriage makes a huge difference on the financial front, both now and also for retirement – and that’s on top of living a life “rejoicing in the wife of my youth”. Add in the fact we live in small town Ontario, and suddenly houses, kids, private schools, retirement savings, and toys are no problemo.

For the millennials on down the line, it’s going to require some serious (and early) planning on what life’s goals are going to be, and how you’re going to get there.

#78 Entrepreneur on 08.10.20 at 7:19 pm

Pensions, are for old people, last stage of their lives, usually. When on pensions they should not be allowed to a paying job, takes away a job from our youth. People are selfish to keep on working, get a life, leave it for the young ones to carry on.

More small businesses should come on here, let our leaders (major, premiers, parliament) know what is happening on the ground. The more SB speak out the better.

Do not mentions numbers, figures but like #42 The West mentions the struggles, the time put in, kind of taxes, taxes, and more, your endless hours, sleepless night, customer issues, product issues, etc.

Write it down (leave out the figures and any avoidance of) and submit. Or just say one or two words of expression. Our globalist leaders need to hear this.

Pierre Poilievre (got the spelling right this time) is listening.

#79 SoggyShorts on 08.10.20 at 7:20 pm

#136 Doug in London on 08.09.20 at 10:33 pm
@SoggyShorts, post #3:

I learned to read by the time I finished grade 1 in June of 1968 and you should learn to read also.

****************************
Maybe you should have stayed for some summer classes back in ’68…

You said “Why would ANYONE want U.S. bonds when there are FAR BETTER places to put your money?”
And then Sail Away and I both asked repeatedly
“Like what?”
“What is ‘far better’?”

To which you have yet to respond.

You said that you sold bonds in 2018 at the market bottom to buy equities. Great.
You said that you sold bonds in 2020 at the market bottom to buy equities. Great.

So
1. When did you buy the bonds that you sold in 2018?
2. When did you buy the bonds that you sold in 2020?
3. When will you buy your next bonds?
4. What did you mean by “far better” in the quote above?

#80 dogwhistle on 08.10.20 at 7:22 pm

#44 Bill on 08.10.20 at 5:00 pm

People’s party. LOL.

More distraction from Quebec that older gentlemen fall for as they believe it will protect them.

The fragile generation that thinks #diversity and wearing a mask is a threat but that will be oh so glad to have a nurse from the Philipinnes or Jamaica wipe them. Pathetic

#81 Bezengy on 08.10.20 at 7:22 pm

CJB on 08.10.20 at 3:05 pm
Why would someone ever retire? just take a holiday if you need a break. People that stop working are pathetic. If a person is able to enjoy an active lifestyle; hobbies, trips, socializing, why not work as well.
————
Because there just isn’t enough time. If you want to go camping, motorcycling, four wheeling, fishing, visit the kids, and do the stuff you’ve always dreamed of doing like travelling and restoring old tractors and motorcycles time is short.

#82 Winterpeg on 08.10.20 at 7:29 pm

If one is underfunded in the TFSA in the last couple of years before retirement, is it best to fund the TFSA rather than the RSP, if a choice has to be made?

If you are in a high-income year, with a DC pension (not DB), then pick the RRSP. Use the tax refund to fund the TFSA. – Garth

#83 Linda on 08.10.20 at 7:32 pm

#64 ‘I’m’ – insofar as I’m aware, all public pension plans are a condition of employment – mandatory. The only way one could possibly access that money to purchase an annuity would be to commute it – which the plan might not permit. Even if it does, one must either retire or quit in order to trigger the commute. Fine if you are ready to move on, not helpful if aren’t.

As for purchasing an annuity, yes, one might be able to buy an annuity that pays more than the pension might. However most annuities end upon death, just like a pension would. Those that permit spousal ‘inheritance’ would likely reflect that cost in the amount paid by the annuity just like a pension would & again, the annuity would end upon the demise of the surviving partner. The premise behind commuting is to have full control over the funds. Once you buy that annuity, you no longer control those funds. Seems like a lot of work just to end up in the same position……

Never buy an annuity in a low-rate environment. This is the worst ever. – Garth

#84 Don Guillermo on 08.10.20 at 7:34 pm

#81 Bezengy on 08.10.20 at 7:22 pm
CJB on 08.10.20 at 3:05 pm
Why would someone ever retire? just take a holiday if you need a break. People that stop working are pathetic. If a person is able to enjoy an active lifestyle; hobbies, trips, socializing, why not work as well.
————
Because there just isn’t enough time. If you want to go camping, motorcycling, four wheeling, fishing, visit the kids, and do the stuff you’ve always dreamed of doing like travelling and restoring old tractors and motorcycles time is short
******************************************
Time speeds up as you get closer to end of life … much like the end of a toilet paper role. Use time wisely.

#85 Steerage on 08.10.20 at 7:34 pm

#25 crowdedelevatorfartz on 08.10.20 at 3:34 pm
@#17 CJB
‘People that stop working are pathetic.”
++++

Perhaps…..
After spending the better part of 45 years listening to intellectually bereft coworkers, managers and customers prattle on needlessly …… i deserve a break?

Maybe they deserve a bigger one … so the most prolific and gaseous blogger there has ever been finds the time somehow while working… we can only weep if you retire and have nothing to do but blog even more!

#86 Flop... on 08.10.20 at 7:50 pm

I comprehend this is not a virus blog, but I will follow up on something I was reporting on here maybe back in May April this year, just in case it turns into one.

Do you remember that healthcare workers site on Heather and 33rd as this thing started to rumble on?

Well, it’s been rumbling on alright.

Back then they had handwritten signs that they covered in garbage bags at night, as if not to alarm the public too much, the results ended up looking like some sorta ghetto covert operation.

Well, I haven’t been back driving past since late May, as I’ve been working on a major renovation in Kitsilano.

Today marked my return to this route.

All change.

People used to ask me on here are the general public getting tested here, the healthcare worker signs and the lack of any sort of attendance suggested a big no.

Today, I turned the corner at around 8 am, it was the calm before the COVID Storm.

Just witches hats and a professionally made sign, appeared to be out of place.

‘COVID Testing’ was written in the city’s colours of white and sky blue.

On my return home I wanted to rub both my eyes but distracted driving can land you a hefty ticket.

Pedestrians lined up down the hill, maybe twenty, social distanced of course.

Cars, on a good gay before maybe 4 or 5, right when this thing was taking off, most days one or two, sometimes not a soul, well besides the six police officers.

Today there were maybe 5 cars inside, and cars lined all the way to Cambie Street, a block and a half away.

Let’s go with 5 cars inside, 25 cars outside, and 20 pedestrians.

So yeah, if you want a eight inch piece of wood shoved down your throat , til your eyes water, this is the place I’d start.

Either that, or any East Vancouver bar…

M46BC

#87 Cheese on 08.10.20 at 7:54 pm

Just turned 39, make around $32k/yr gross, have ~150k invested, there is no hope and I don’t imagine the future anymore.

#88 Corban on 08.10.20 at 7:57 pm

Some food for thought:

https://www.reddit.com/r/CanadaPolitics/comments/i5e4fa/78_of_bc_residents_support_banning_foreigners/

It’s like saying 78% of BC residents don’t understand how low foreign ownership actually is, and the outsize impact that the ~90-95% local ownership has on the market. Does anyone remember Cam Good flying those asian canadians around in the helicopter and spreading the FOMO?

Never underestimate public ignorance. Trump doesn’t. – Garth

#89 Ace Goodheart on 08.10.20 at 7:59 pm

#70 ImGonnaBeSick:

Interesting.

I’ll take your word for it then.

I wonder why Elon couldn’t get his robots to weld? Maybe a robot uprising?

He was literally hand assembling Model 3s in a tent in the parking lot.

And people still thought he was a genius.

“A tent? Amazing. Who would have come up with that ???” Um…..stone age people ?

#90 Ponzius Pilatus on 08.10.20 at 8:01 pm

Garth is right.
Older people are younger now.
Biden is 77, and I just saw him riding a bike.

#91 ImGonnaBeSick on 08.10.20 at 8:05 pm

#78 Entrepreneur on 08.10.20 at 7:19 pm
Pensions, are for old people, last stage of their lives, usually. When on pensions they should not be allowed to a paying job, takes away a job from our youth. People are selfish to keep on working, get a life, leave it for the young ones to carry on.

—–

How about we let people do whatever they want to do in regards to their work and retirements and let the market decide if they are needed or not?

What a ridiculous statement.

#92 SoggyShorts on 08.10.20 at 8:06 pm

#17 CJB on 08.10.20 at 3:05 pm

Why would someone ever retire? just take a holiday if you need a break. People that stop working are pathetic. If a person is able to enjoy an active lifestyle; hobbies, trips, socializing, why not work as well.

*****************
What an asinine comment. Some people have hard jobs, and/or have much more interesting ways to spend 40h a week.
I’m looking forward to ~40 years of retirement, you go ahead and work until your deathbed. I’m sure your last words will be “I should have spent more time at work”
Pathetic indeed.

#93 Flop... on 08.10.20 at 8:06 pm

My 7 year old iPad decided to change the word day to gay.

Maybe because I started talking about getting a piece of eight inch wood shoved down your throat.

I guess I could double check everything before I hit submit.

Every one of my 15,000 or so posts has multiple mistakes.

It’s probably more entertainment this way, so I’ll just keep doing it the same way if that’s alright with you…

M46BC

#94 crowdedelevatorfartz on 08.10.20 at 8:07 pm

@#63 MF
“Did you think they work for free and are just volunteering their time?”

+++

Well its been my experience over the past several decades that most govt employees spend more time avoiding work than they do working.
Any excuse, harassment, stress, unsafe working conditions, (Covid is like manna from heaven for the truly lazy), ….on and on and on until even the Human Resources depts are larger than the organization they are designed to manage.
How many govt staff are sitting at home …right now…..getting paid to do nothing? 25%? 50? 75?
Revolting waste of money and truth be known…..has anyone noticed?
Do we really need that many bureaucrats pushing paper back and forth?
China will eat us for breakfast..
Anywho.
In your haste to brand me as a whining idiot.
Which I am.
My comment wasn’t about their lack of work ethic( a topic for another day perhaps)….it was about their guaranteed pensions which are topped up by the taxpayers in the private sector when ever the govt employee pensions dip into the red( more and more often it seems) and need extra cash to remain solvent…..
How much longer will the private sector citizens keep paying into an obviously unfair, broken, bankrupt cash grab system?
Especially when most private sector citizens can only dream of the perks the lazy sloths in govt collect……

Well, one only has to look at the enraged mobs in Beirut to see what people do when they have had enough of incompetent, arrogant, greedy, corrupt systems………..

Public sector pensions and the extra cash they suck off the taxpayer teat to remain running….are coming to an end….one way or another.
Count on it.
:)

#95 Steve on 08.10.20 at 8:13 pm

In response to Garth comment on my previous post. My wife both work full time and struggle with not having enough time. She has a house cleaner come every two weeks, which results in me getting all my stuff moved( others call put away). I hate it. I much prefer doing my myself. So you cannot buy time back. So if can live a modest lifestyle and retire sooner. Do it, you never know when you are done. Also riding my bike is a simple pleasure, that I wish I could do more often. Back to work now.

#96 El presidente on 08.10.20 at 8:17 pm

88 Corban on 08.10.20 at 7:57 pm
Some food for thought:

https://www.reddit.com/r/CanadaPolitics/comments/i5e4fa/78_of_bc_residents_support_banning_foreigners/

It’s like saying 78% of BC residents don’t understand how low foreign ownership actually is, and the outsize impact that the ~90-95% local ownership has on the market. Does anyone remember Cam Good flying those asian canadians around in the helicopter and spreading the FOMO?

Never underestimate public ignorance. Trump doesn’t. – Garth

Well trump is their champion…leads by example……apparently the spanish flu ended WW2 because all the soldiers got sick

#97 crowdedelevatorfartz on 08.10.20 at 8:18 pm

@#85 Steerage
“the most prolific and gaseous blogger there has ever been finds the time somehow while working… ”
+++

I’m just a fast reader and typist.
I’m usually up at 5am…log on, eat breakfast….spew vitriol. ( multi tasker extraordinaire …I can eat, fart and spew simultaneously…..)
Head to work for 6am….log on….spew more vitriol if necessary while drinking coffee.
Start work at 7am.
Log on around 9am ….spew rebuttal vitriol at the angry crowds of Dogs that bite…..
Log on after work, 4pm ? 5? Spew more vitriol at more angry dogs while cooking dinner……

Its my solution for everyone’s Covid19 lack of exercise.
Gotta get everyone’s heart rate up so they can burn calories…..

Is it working?

No need to thank me.

#98 crowdedelevatorfartz on 08.10.20 at 8:21 pm

@#87 Cheese
“Just turned 39, make around $32k/yr gross, have ~150k invested,”

++++

Dont be discouraged!
You are doing excellent. You are way ahead of most Canuckleheads.
Keep doing what you’re doing and you will retire in a much better place than most.

#99 ImGonnaBeSick on 08.10.20 at 8:23 pm

#89 Ace Goodheart on 08.10.20 at 7:59 pm

I had programmers at Fremont, first of all Elon decided to go with Kuka robots, which are incredibly precise, but they’re not as common as Fanuc or Nachi, so the talent pool was much smaller. Second, Elon didn’t hire experienced skilled trades, he hired kids with technical knowledge to maintain, and although they were smart kids, they didn’t have the knowledge or the drive to keep the lines running. Breakdowns would last tens of minutes rather than 1-5 mins in the big 3 facilities – sometimes they would leave for break rather than get the lines back running. Also, the tip dressing programs were awful and schedules need to be tweaked as metal changes and weld tips wear. Also their tip change protocols were awful.

This is probably not the blog to praise Unifor and UAW workers, but I work with a ton unionized skilled trades, and when on the job, they are absolutely awesome to work with. They’re also a lot of fun to have beers with after, even if we don’t see eye to eye on politics.

#100 Peppy Sue on 08.10.20 at 8:25 pm

Planning for living well in retirement is important, but ensuring you have enough money to keep you living well after the ‘good retirement’ years, when you may need long-term care, should always be on a retiree’s radar. Too many sad outcomes there if you’re not prepared.

#101 Cto on 08.10.20 at 8:25 pm

knowing what we know now, his best investment would have been a 2nd house….
Its very clear after 10+ years that,p hear in Canada, the BOC and FEDs will always support the too big to fail housing sector, even at the destruction of defined benefit pensions.
There is no limit to the moral hazzard they will commit or tax payer money they will hand out.

#102 IHCTD9 on 08.10.20 at 8:28 pm

#32 bob on 08.10.20 at 4:19 pm
Hi Garth,

Expenses *should* go down, because most people will have a mortgage paid off and kids expenses gone, and they save on work commuting costs.

I’m in my 40’s, and already, the cost savings from daycare and afterschool are substantial. Add another two decades and hopefully no failures-to-launch, no more extra mouths to feed.

Our yearly family vacations will soon just be the two of us.

Am I missing something?
——

Nope, you’re not. At least not for those raising a family.

I’m also 40-something and am (I think) on the last leg of child rearing. I found my 40’s was a rapid fire conquering of milestones. The mortgage paid off, elementary tuition done, then high school tuition down for 1, and 1 to go (we sent ‘em to private school for both), nest egg hit the point where we should reach our goal by 65. Next up, post secondary tuition, and also crossing our fingers for zero launch failures after that.

Our thirties were an upward spiraling tornado of expenses, now as we approach 50, the expenses are winding down to where they were when we were first married and rented – except our income is much higher.

If all goes well, I’ll be done the big bills by early 50’s and heading into some seriously easy living on the financial front. No debt, just feeding us two, taxes insurances and utilities – that’s it.

Can’t wait!

But, I see a new Silverado High Country, and a sweet YAMAHA Wolverine 850 sxs in my future. Ms. IH also mentions a new road bike too, and some fancy vacations…

Or Covid might eat my job and I’ll end up joining the ranks of the Millennial baristas. :(

#103 TurnerNation on 08.10.20 at 8:29 pm

The Pension-Bankers getting in on the New System action: “Now you’se can’t leave”
The global slave system. Line ups; masks; submitting to tons of new rules. Let’s keep that illusion going. I love the new system – it keep same safe!
Big Pharma lurking in the wings. This will be a very profitable period in history. And heed this pathetic weblog.
Also – no idea who is this fella but have a read:
“This is the most dangerous time in the history of man. The seriousness of this plot cannot be underestimated. It is not due to any threat of conventional war, and it is not due to any threat of nuclear decimation, it is based on the fact that this is a psychological war waged by psychopaths against all mankind, and it is being advanced by a small group of monsters that have taken control of the minds of the masses through long-term indoctrination and policies meant to breed dependency. Fear is the new weapon of mass destruction, not because it is legitimate, but because the people have lost all will to be free, have lost all ability to think, and seek shelter and comfort as a collective herd only capable of existence in a society that is based on totalitarian rule.” – Gary D. Barnett”

#104 Mr Canada on 08.10.20 at 8:32 pm

# 60 MF on 08.10.20 at 5:50 pm
Not sustainable??

Here is the 2018 annual report from the Ontario Teachers Pension fund:

https://www.otpp

Great – so when do we as taxpayers stop guaranteeing this Teachers Pension Fund ?

#105 ImGonnaBeSick on 08.10.20 at 8:53 pm

Here is one of the first articles that I’ve seen that (very) briefly hints at possible changes to TFSA (besides this blog). Now most of what Mr. Carrick is saying is stuff your TFSA to the brim immediately due to upcoming tax hikes, but this is the little tidbit I don’t like to think about;

“Sure, there’s a risk that the federal government could change the TFSA rules. But slapping a tax on withdrawals of money faithfully committed for years to a TFSA is the sort of breach of faith that gets governments punted out of office. It would be smarter to focus changes on future TFSA contributions – perhaps by introducing a lifetime limit.”

https://www.theglobeandmail.com/investing/personal-finance/article-tfsas-rrsps-and-the-tax-hikes-to-come/

#106 Uncle Charlie on 08.10.20 at 8:57 pm

“Invest the TFSA funds into equity-based growth assets. Ignore market volatility, the virus or your own tepid emotions.”

Garth, just to clarify, were you suggesting for him to invest in equity-based growth assets only within his TFSA, or a balanced 60/40 mix with the 60% in equity-based growth assets?

He needs growth and the DB pension provides enough balance. That is why emotion needs to be set aside as there will be more TFSA volatility. – Garth

#107 AB on 08.10.20 at 8:58 pm

#87 Cheese
Don’t be discouraged. You are a good saver. Congratulations. No reason to live in an over priced location for retirement. As for those “teachers “ bragging about a 200,OOO plus retirement income collecting OAS that is BS. Their income is too high for OAS. Keep your chin up. Keep up the good work.

#108 Sail Away on 08.10.20 at 9:08 pm

#66 James on 08.10.20 at 6:11 pm

Shooting at the White House!

Hmmm….who’s missing from the comments section today….?

—————

Well, someone was shot near the white house.

Who’s missing? Smoking Man?

#109 laughing my rear off on 08.10.20 at 9:10 pm

Hey Flop,
Your gay/wood comment made me laugh out loud, thanks.

#110 Sail Away on 08.10.20 at 9:13 pm

#51 Ace Goodheart on 08.10.20 at 5:13 pm

————–

Re: Elon Musk

Hey Ace, anyone ever tell you it’s petty to denigrate those more accomplished than yourself?

But I guess you might have done more than Elon, so maybe all good?

#111 Steerage on 08.10.20 at 9:14 pm

#97 crowdedelevatorfartz on 08.10.20 at 8:18 pm
@#85 Steerage
“the most prolific and gaseous blogger there has ever been finds the time somehow while working… ”
+++

I’m just a fast reader and typist.
I’m usually up at 5am…log on, eat breakfast….spew vitriol. ( multi tasker extraordinaire …I can eat, fart and spew simultaneously…..)
Head to work for 6am….log on….spew more vitriol if necessary while drinking coffee.
Start work at 7am.
Log on around 9am ….spew rebuttal vitriol at the angry crowds of Dogs that bite…..
Log on after work, 4pm ? 5? Spew more vitriol at more angry dogs while cooking dinner……

Its my solution for everyone’s Covid19 lack of exercise.
Gotta get everyone’s heart rate up so they can burn calories…..

Is it working?

No need to thank me.

You spew it all day long! Must be washroom breaks….. you wouldn’t be caught dead doing it on work time…. only civil servants do that…. well well we are grateful for your ruminations…

#112 Ponzius Pilatus on 08.10.20 at 9:29 pm

#85 Steerage on 08.10.20 at 7:34 pm
#25 crowdedelevatorfartz on 08.10.20 at 3:34 pm
@#17 CJB
‘People that stop working are pathetic.”
++++

Perhaps…..
After spending the better part of 45 years listening to intellectually bereft coworkers, managers and customers prattle on needlessly …… i deserve a break?

Maybe they deserve a bigger one … so the most prolific and gaseous blogger there has ever been finds the time somehow while working… we can only weep if you retire and have nothing to do but blog even more!
————–
I feel you.
At least CWS’s post used to be in the morning and in the evening, and were short.
No he’s posting during the day, wasting his client’s time and money.
And now he’s blathering along and it takes longer to scroll by.
And BTW, what happened to the quota system.

#113 Elon Fanboi on 08.10.20 at 9:29 pm

#51 Ace Goodheart….” So when he talks about AI and putting micro chips in people, and flying to Mars, I am just like “OK, Elon, but do the people who build your tech for you actually tell you they can do this?”

Because they are the people who would be doing it. Not him.”

————-

Just last week SpaceX returned 2 US Astronauts to earth in their Dragon crew capsule after launching them back in July. They put their competitor..mighty Boeing to shame, who are still about a year behind SpaceX with their crew capsule.

Then 3 days later they did this…..

https://youtu.be/s1HA9LlFNM0

This is their prototype Mars rocket with the most advanced rocket engine on Earth.

And don’t forget this unbelievable sight..from a couple of years ago…not CGI.

https://youtu.be/l5I8jaMsHYk

SpaceX has come out of nowhere in a decade and now dominates the space flight industry.

So yes…..his people can do it.

#114 Ponzius Pilatus on 08.10.20 at 9:35 pm

#108 Sail Away on 08.10.20 at 9:08 pm
#66 James on 08.10.20 at 6:11 pm

Shooting at the White House!

Hmmm….who’s missing from the comments section today….?

—————
Well, someone was shot near the white house.

Who’s missing? Smoking Man?
—————-
You keep Smokey out of this.
You could not hold a Candle to him.

#115 NoName on 08.10.20 at 9:47 pm

@ Ace Goodhart and IamGettingFlu

Here is a good book you guys might be interested in reading.

https://www.amazon.ca/Robot-Take-Wheel-Autonomous-Driving/dp/1948062267

#116 NoName on 08.10.20 at 9:54 pm

#113 Elon Fanboi on 08.10.20 at 9:29 pm

You should read a bit about jeffies bezos space program blue origin…

#117 n1tro on 08.10.20 at 10:13 pm

#148 SoggyShorts on 08.10.20 at 1:48 am

That’s just not realistic. If you are estimating something to within 2 decimals, it’s not really an estimate, is it?
Don’t get me wrong, I think it was a bad estimate, but absolutely no one gave any estimates on it using decimals.

#149 SoggyShorts on 08.10.20 at 1:57 am
It’s also not how people talk in general.
When I see a price tag of $19.97 and my wife asks how much it is I say $20. It’s inaccurate, but close enough for the purpose
———————-
I think you proved the point I was making. No one gave any concrete numbers (decimals or not) but rather, very wild guesses, with rounded numbers.

An “estimate” is based on something that has happened to give a guideline as to what could happen. ie. How long will Project B take to complete? Well based on Project A which was very similar, it will take X amount of time.

A “guess” on the other hand is just that, came from nowhere of substance.

And for those apologizing for the health minister, if you move the goal post far enough, any guess could come true. “It is safe to assume gold will return to an investor between 30% to 70%.” Great news! When? This year? This decade? Details matter.

We aren’t talking about the weather or $19.97 being referred to as $20. The health minister’s comments among others are what sent the Canadian and world economies into the toilet.

The last thing apologists forget is even if the health minister was talking “in general”, she is still so far off the mark. 30% to 70% will be infected based on the response taken. So if everyone is locked now and forbidden to see each other Wuhan style, then it is “safe to assume” 30% would still be infected…..her words not mine.

Did that happen?

#118 TurnerNation on 08.10.20 at 10:13 pm

#51 Ace Goodheart I flipped though a book about his life. A early photo of him in Cuba
This guy was being groomed as an elite. How many Uni grads do this. Hanging with an A-list actor too. Meeting Castros? Come on this guy is pawn of the elites bought and paid for.

Remember, any technology they tell us about already decades old and perfected. (It is developed using those unlimited black budgets i.e. the ‘war on terror’ how much did that suck from us.)

“The caption from the picture:
In 2013, Musk visited Cuba with Sean Penn (driving) and the investor Shervin Pishevar (back seat next to Musk). They met with students and members of the Castro family, and tried to free an American prisoner.”
https://imgur.com/3OLf0lZ

#119 IHCTD9 on 08.10.20 at 10:21 pm

#98 crowdedelevatorfartz on 08.10.20 at 8:21 pm
@#87 Cheese
“Just turned 39, make around $32k/yr gross, have ~150k invested,”

++++

Dont be discouraged!
You are doing excellent. You are way ahead of most Canuckleheads.
Keep doing what you’re doing and you will retire in a much better place than most.
——

Yes Sir. What did Mr. T say a few days back, 3K average saved for retirement in Canada? So cheese, you’re doing 50X better than a whole lot of people.

Throw 500.00/month at it till 65, and you’ll have ~850K kicking off 40k per year. Add in CPP and OAS and you’re probably at 55k per year. Almost as good as a teachers pension. I don’t even know a single person outside of family doing that well.

PS. That 55K assumes leaving that 850k intact – that could be for the kiddies eventually if you have ‘em. If not – you can spend it all!

Finally, a true story I heard just tonight. Mid 50’s medical professional, wife is a teacher. Both less than 15 years in said professions. 2 kids who are un-launched “professional students” with parents footing the bill. Eldest just got accepted into Med school in Australia, estimated cost is $475,000.00.

They’ve got 15 grand saved for retirement.

#120 TalkingPie on 08.10.20 at 10:38 pm

Canada’s biggest financial problem is that the majority of its citizens are 100% convinced that they need to live in a tiny handful of cities “because that’s where the money is,” and then don’t earn decent money.

Yeah, if you’re earning a quarter million a year, go ahead and pay the premium to buy/rent in Toronto or Vancouver. Otherwise, there’s a big wide country out there where you can live a nice life doing whatever normal job you’re doing without indenturing yourself.

Up until Covid, discounting what I was spending on pilot lessons, the girlfriend and I were getting by just fine on about $4,000/month or less. Three paid-off cars, 2,700 sq ft house (bought 2 years ago with 20% down), modest pool, an hour’s drive to downtown Montreal, if we care to go – I didn’t much care for downtown activities even during the 10 years I lived there. We’ve been to a dozen or two countries in our time, eat decent meals at home, and don’t feel like we’re missing out on much of anything important, aside from not having had kids yet.

After 4 months of not working due to Covid, I’m getting to the point where I’d like to be working and earning money again, but overall life is good!

#121 Bill on 08.10.20 at 10:54 pm

DELETED

#122 Ace Goodheart on 08.10.20 at 11:35 pm

RE: #110 Sail Away on 08.10.20 at 9:13 pm

#51 Ace Goodheart on 08.10.20 at 5:13 pm

————–

Re: Elon Musk

Hey Ace, anyone ever tell you it’s petty to denigrate those more accomplished than yourself?

But I guess you might have done more than Elon, so maybe all good?

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

I’m not denigrating him. I’m celebrating him. He’s quite the accomplishment. He’s the equivalent of the Wolf of Wall Street in the tech world.

He’s a massively skilled promoter. He will have his own chapter in the history books. What he has managed to build, on top of one badly managed, unprofitable electric car company, is just unbelievable. It makes the Danish Tulip Mania look like 50 cent day at Dollarama.

I just like to point out that the guy never invented anything, never built anything, and doesn’t seem to know all that much about tech.

He is just really, really good at getting investors to part with their money.

One day he will become one of the most hated men on the planet. But people will still have to admire, what he did.

#123 SoggyShorts on 08.11.20 at 12:31 am

#114 Ponzius Pilatus on 08.10.20 at 9:35 pm
#108 Sail Away on 08.10.20 at 9:08 pm
#66 James on 08.10.20 at 6:11 pm

Shooting at the White House!

Hmmm….who’s missing from the comments section today….?

—————
Well, someone was shot near the white house.

Who’s missing? Smoking Man?
—————-
You keep Smokey out of this.
You could not hold a Candle to him.

***************
HA! At least Sail knows the difference between your&you’re.
Heck, I’d rather read a Sail doppelganger post than a smokey incoherent ramble.

#124 Charles Scaling on 08.11.20 at 12:36 am

Dear Garth,
Thanks for all the work you put in writing your “Pathetic Blog”
It’s very educational and I have learned a lot from it but in the end I “go my own way” because I have to. I see the world differently from most people and so my life is based on standing on my own two feet with few expectations other the changing seasons

#125 Millennial 1%er on 08.11.20 at 12:47 am

jesus. Reading blogs like this makes me realize how young I am. Starting to dump as much as you possibly can into your TFSA/RRSP at 25 is a lot better than at 55

#126 uncle dave on 08.11.20 at 1:06 am

#17 CJB on 08.10.20 at 3:05 pm

Nobody ever said on their death bed ‘ I wish I had worked more’

#127 Hard Rock on 08.11.20 at 3:38 am

#17 CJB, why would anyone retire? Good question. Some people just don’t know anything else. I have a good friend who recently sold his “side hustle” for $200 Million ( no typo) and still gets into the office at 7:30 am. Sure, he has a nice house, family man, vacations, but do nothing, not in the DNA of some, go figure. On the other side, I jumped at the chance twenty five years ago the second it was possible to manage investments online and haven’t tied in a tie since. Different strokes. I might have made a lot more money by staying in the game, but, that’s life.

#128 Nonplused on 08.11.20 at 3:41 am

#39 Faron on 08.10.20 at 4:30 pm
#90 crowdedelevatorfartz on 08.03.20 at 9:29 pm

@#77 Nonplused

Faron has been noticeably absent while the fake “Sail Away” has been bragging about his wealth……….figure it out.

Or as Ponzie suggested….

ITS A FULL MOON

—————————

Crap there are fake Nonpluseds out there too:?

#129 Stan Brooks on 08.11.20 at 3:46 am

M2 money supply has increased by 12.5 % on yearly basis in Canada, here is the data from BoC (from 1,750 to 2,000 trillions)

https://tradingeconomics.com/canada/money-supply-m2

That implies 12.5 % monetary inflation in the last year, here is the definition of monetary inflation:

https://en.wikipedia.org/wiki/Monetary_inflation

Monetary inflation is tightly correlated (causation effect) with the cost of living, inflation of assets.

If your income was stagnant in nominal terms in the last year it means it was reduced by 12.5 % in terms of purchasing power (assets + goods averaged).

If you are on CPP/OAS and your ‘pension’ (or whatever that pitiful beggars giveaway is called) is ‘indexed’ at 1-2 %, congratulations. Also congratulations to all savers who get greeted with higher and higher banking fees while getting zero return on their savings.

CPI’s bastardized ‘inflation’ measures nothing.

Remember folks, when you contributed to the CPP the money (5 gran a year between you and your employer)
in 1980-es and 1990-es for example was entirely different money from the current in terms of purchasing power.

Just wait and see how the purchasing power will further deteriorate in the next decade or two.

I am hearing Marc Carney is now becoming economic advisor to Trudeau so expect fun times ahead.

1 Big Mac a day seems a ‘reasonable’ expectation for 40 years of CPP average contributions for people who will retire 1-2 decades from now if we account for the expected/guaranteed zero rates, close to zero ‘inflation’ indexing and the double digits yearly M2 increases.

Is that ‘increase’ in assets prices caused by a booming economy or by excessive money printing?

You decide. But there is much more of this to come so brace for impact. It is hitting the fan, literally as we speak.

Cheers,

#130 Wrk.dover on 08.11.20 at 6:04 am

re-read #73 & #129 if you have budgeted to live on the full amount of your retirement income.

Cat food

#131 Sail Away on 08.11.20 at 6:58 am

#122 Ace Goodheart on 08.10.20 at 11:35 pm
RE: #110 Sail Away on 08.10.20 at 9:13 pm

#51 Ace Goodheart on 08.10.20 at 5:13 pm

————

Re: Elon Musk

Hey Ace, anyone ever tell you it’s petty to denigrate those more accomplished than yourself?

But I guess you might have done more than Elon, so maybe all good?

————-

I’m not denigrating him. I’m celebrating him. He’s quite the accomplishment. He’s the equivalent of the Wolf of Wall Street in the tech world.

He’s a massively skilled promoter. He will have his own chapter in the history books. What he has managed to build, on top of one badly managed, unprofitable electric car company, is just unbelievable. It makes the Danish Tulip Mania look like 50 cent day at Dollarama.

I just like to point out that the guy never invented anything, never built anything, and doesn’t seem to know all that much about tech.

He is just really, really good at getting investors to part with their money.

One day he will become one of the most hated men on the planet. But people will still have to admire, what he did.

————-

Uh huh. Ever hear of SpaceX?

You know, the company that invented the first viable self-landing, reuseable rockets, is the first privately owned company to launch to the ISS, and has enormous NASA and Air Force contracts?

#132 Captain Uppa on 08.11.20 at 7:46 am

Cleaning and bike-riding as retirement goals? – Garth

—————————————-

You should never assume what makes people genuinely happy. Simplicity can have great rewards.

My parents are happier than they have ever been in their 70s and they live modestly.

#133 Do we have all the facts on 08.11.20 at 7:46 am

My sister and I went through a number of stages as the health of our mother and father began to fail. After our mother died we hired a part time caregiver so that our father could live in his home. Once he required 24 hour care we had no choice but to arrange for accommodation in an extended care facility.

We selected a facility close to our residences to so that we could take turns visiting on a regular basis. What we didn’t expect however was the total monthly cost, including supplies, of his accommodation. Fortunately his pension income and a supplement from Veterans Affairs just covered the total cost. However if his total monthly income had been lower my sister and I would have been required to make up the difference or face the prospect of travelling to over 50 kilometres to one of the extended care beds available in a lower cost facility.

I am sure many of the readers of this blog are not aware of the chronic shortfall of reasonably priced private or semi private accommodation for extended care in Canada. Based on our experience if you require nursing care and wish to live in a private room, to reduce the risk of infection, it may set you back $6,000 a month or more to avoid a waiting list and have a choice of location.

The waiting list for a private or semi private bed in an extended care facility at the minimum rate of $2,800 per month in Ontario is growing every day. Land costs in urban areas are increasing and as a result an increasing number of new extended care facilities are being constructed in communities surrounding larger Cities.

This situation will only get worse as the waiting list for a bed in a long term care facility in Ontario increases from 35,000 to more than 60,000 as the current population ages. Added to the problem is the fact that over 30,O00 long term care beds in Ontario are located in older buildings and require substantial renovation or replacement to meet minimum standards of care.

My point is that if you want a choice of where you live as your health fails and you require accommodation in an extended care facility be prepared to pay a significant premium. Many seniors in Ontario have no choice but to live in a long term care facility that makes regular visits by their family and friends more difficult.

Choice of accommodation in Ontario if, or when, your health begins to fail could require $60,000 a year over and above Old Age Security.

If you want to avoid living four to a room in a basic long term care facility I would suggest that you start saving today.

#134 crowdedelevatorfartz on 08.11.20 at 8:12 am

@#111 Steer Rage
“you wouldn’t be caught dead doing it on work time…”

++++

Wouldnt really matter since I’m one of the owners and the other silent owners are very happy with my excellent sales numbers, my efficiency upgrades to various systems in the biz, and my extraordinarily unmatchable flatulence ( the staff stop texting and go do their jobs).

#135 crowdedelevatorfartz on 08.11.20 at 8:15 am

@#112 Pouting Ponzie
“And now he’s blathering along and it takes longer to scroll by…..
++++

Your incredibly dexterous index finger will thank me in later years……

#136 crowdedelevatorfartz on 08.11.20 at 8:21 am

@#128 Nonplused
“Crap there are fake Nonpluseds out there too:?”

++++

Imitation.
The height of flattery…..or flatulence in my case.

#137 crowdedelevatorfartz on 08.11.20 at 8:38 am

@#129 Stan Brooks

It appears that former best buddy and co contributor to WE…. Finance Minister and trust fund recipient ….Bill Morneau might be out on his Butz….

https://www.ctvnews.ca/politics/trudeau-seeks-advice-from-mark-carney-on-economic-recovery-plan-1.5058179

I could save Trudeau time and money with some financial advice.

“Stop spending more money than you actually have…….”

#138 models are useless on 08.11.20 at 8:56 am

Any predictions made from models whose basic assumption is: “No one will react as events develop” are completely erroneous and using them could only be done by complete idiots or people wanting to use fear to panic the public into some extreme behaviour.

If a stock market prognosticator said: “my model predicts the S&P will reach 50 billion in 6 months based on its current rapid growth rate and the assumption that no one will sell as prices go higher” they would be rightly ridiculed and scorned.

Public health officials have fawning admirers though so I guess their incompetence is ok with that crowd.

Maybe their decision to use fear and panic, based on the idea that the majority of people are idiots, is the right one.

The problem is the idiots are the ones who blindly accept anything a person in a white coat says as gospel.

#139 Dharma Bum on 08.11.20 at 9:07 am

Another whining moaning compalining entitled teacher.

Surprise!

#140 R on 08.11.20 at 9:20 am

#51 Ace Goodheart
With respect to Elon Musk’s rate of innovative change, and learning from experience, try to keep up.

#141 go getter on 08.11.20 at 9:22 am

#87 cheese “Just turned 39, make around $32k/yr gross, have ~150k invested, there is no hope and I don’t imagine the future anymore.”

You sound like a real go getter.

In cottage country Ontario if you are lucky enough to find a handyman, expect to pay around $50/hr, cash.

The local student painters bought their own cottage nearby, and they are out there in their million dollar pad, partying and living it up every weekend.

Young kids all over the lake are refitting old barges to meet the demand, where the main barge company has a 4 year backlog of work and chooses not to work on weekends. He prefers to tend to his boat collection.

I just received an invoice from my electrician, $4,000 for a day and a half’s work (includes materials, but how much do breakers cost these days?)

Got quotes for 3 laundry cabinets, $5,000 to $7,000 installed. Bought them at Ikea for $950 instead, pretty much same quality. Took 3 hours to install, by myself. With a helper would have been half that time.

I hear there are guys that specialize in installing Ikea cabinets. I bet they are making a killing. If you can watch a youtube video or understand pictogram instructions, you too could do it.

But I expect a long list of excuses why you can’t do any of these things instead.

Enjoy your bleak future, I think you welcome it, let’s be honest.

#142 TurnerNation on 08.11.20 at 9:26 am

#68 TRUMP2020 of course buddy, of course. Children are the target here, get them into the New System asap.
Online zombies. Those #s on the telescreen will be used to re-make the world. Step by step.


#37 TurnerNation on 07.26.20 at 3:34 pm
Children’s playgrounds must remain fenced off as danger zones. Sports, clubs and scouts, birthday parties are banned. No school recitals either.
The screen will be their life. Big global ruling tech corps like Google classroom will use the most advanced psychological training and control techniques. Children will be raised by the new technology global state.
My First Amazon account.

#60 TurnerNation on 06.10.20 at 8:45 am
Guess what there’s a solution and plan for that. As we know the handful of large tech companies and A.I. rule the world now. Apps like Google Classroom mean the kid will be at home, isolated from other kids, plugged into State propaganda teaching.

#86 TurnerNation on 05.22.20 at 3:41 pm
Life is online now, the big tech companies running our world will control what goes into our minds, especially those of kids (Google Classroom). Playdates and birthday parties for children? Also banned. Too dangerous.
https://en.wikipedia.org/wiki/Cultural_Revolution#Transition_period

#144 TurnerNation on 07.01.20 at 9:53 am
Parents will work from home and #stayhome.
Kids will be educated by the New World Order tech companies, schools already adopted Google Classroom.

#143 Mattl on 08.11.20 at 10:11 am

#77 IHCTD9 on 08.10.20 at 7:17 pm

100% agree and Garth has said same.

#144 crowdedelevatorfartz on 08.11.20 at 10:11 am

Flights arriving today at YVR ( Vancouver)

https://www.yvr.ca/en/passengers/flights/arriving-flights?q=

Several from China, the US, and Germany…. the rest are internal flights.

And all these people are self isolating for 2 weeks?

Give me a break.

Get ready for Covid Part Deux

#145 IHCTD9 on 08.11.20 at 10:35 am

#125 Millennial 1%er on 08.11.20 at 12:47 am
jesus. Reading blogs like this makes me realize how young I am. Starting to dump as much as you possibly can into your TFSA/RRSP at 25 is a lot better than at 55
___

You gotta roll with life, but getting as much cash in there as soon as possible will pay big.

We started at 26 with very small amounts – but it went in every month come hell or high water. By our early thirties we had kids and a mortgage, our bank account hit overdraft all the time for a couple of years – but the nest egg deposit went in no matter what – even if we were in the red that month.

You make your life choices and try to still hit your marks. We’d be liquid millionaires right now if we had passed on kids. We could have retired at 52 if other choices were not made. As it is, we’ve done everything we set out to – and should be comfy by 65.

Arthur wants to retire at 60, but decided that at 50. Too late. You need 4 decades to make the magic happen if you’re a regular working schmo. It takes 20 years just to understand the plan is actually working – that’s when you finally start to see a nice chunk building up.

Another way to look at it is that you need 50% of what you hope to retire on in the bank 10 years before you hope to retire. If Aurther wants to retire with a million in the bank at 60 – he’ll need 500 grand by 50. These days you may want to play it safe and say 600 grand. 10 years doesn’t build anything – it’ll be almost all deposits still after a decade.

#146 Elon Fanboi on 08.11.20 at 10:37 am

#113 No name…” You should read a bit about jeffies bezos space program blue origin…”

Currently vapourware. They have not even reached orbit yet.

#147 NoName on 08.11.20 at 11:16 am

#146 Elon Fanboi on 08.11.20 at 10:37 am
#113 No name…” You should read a bit about jeffies bezos space program blue origin…”

Currently vapourware. They have not even reached orbit yet.

Remember a race between turtle and rabbit, jef is in no hurry his hardware will be better, he sells off 1B of his amazon every year to finance blue, unlike space needs to provide commercial flights to finance operations.

#148 Sail Away on 08.11.20 at 12:10 pm

#147 NoName on 08.11.20 at 11:16 am
#146 Elon Fanboi on 08.11.20 at 10:37 am
#113 No name…” You should read a bit about jeffies bezos space program blue origin…”

Currently vapourware. They have not even reached orbit yet.

————

Remember a race between turtle and rabbit, jef is in no hurry his hardware will be better, he sells off 1B of his amazon every year to finance blue, unlike space needs to provide commercial flights to finance operations.

————

What if the rabbit has already been running for 18 years, has taken the title from the previous champion Boeing rabbit, and continues to run faster and faster, gathering bags full of luscious green lettuce?

The Bezos turtle is still in the egg. It doesn’t matter how much cash it’s fed- the growing process takes time. And let’s be honest- Bezos is an online shopkeeper, not a technical genius.

Remember all the ‘Tesla Killers’? Where are they now? Yep… outclassed and mostly gone, but a new one crops up every few months.

You can tell it’s hopium when words like ‘will, would, could’ are used. I much prefer to place my money on ‘is’.

#149 Sail Away on 08.11.20 at 12:16 pm

NoName:

Also, remember you said Elon’s LEO Starlink system would never work? Well, it’s working, and working very well.

Full Beta testing is ongoing now and hundreds of new satellites are going up constantly.

It’s fine to be wrong, as long as you can learn from it and recalibrate. Only a fool maintains a position after clearly being proven wrong and you don’t strike me as a fool.

#150 NoName on 08.11.20 at 12:47 pm

#149 Sail Away on 08.11.20 at 12:16 pm
NoName:

Also, remember you said Elon’s LEO Starlink system would never work? Well, it’s working, and working very well.

Full Beta testing is ongoing now and hundreds of new satellites are going up constantly.

It’s fine to be wrong, as long as you can learn from it and recalibrate. Only a fool maintains a position after clearly being proven wrong and you don’t strike me as a fool.

C’mon sa, fool… You may very well be correct on this one.

I never sad that spacely sprocket internet would not work, what pointed out is that it won’t be as convinient and accessible without pizza box size antenna.

#151 Sail Away on 08.11.20 at 1:05 pm

DELETED

#152 JB on 08.11.20 at 1:37 pm

#123 SoggyShorts on 08.11.20 at 12:31 am

#114 Ponzius Pilatus on 08.10.20 at 9:35 pm
#108 Sail Away on 08.10.20 at 9:08 pm
#66 James on 08.10.20 at 6:11 pm

Shooting at the White House!

Hmmm….who’s missing from the comments section today….?

—————
Well, someone was shot near the white house.

Who’s missing? Smoking Man?
—————-
You keep Smokey out of this.
You could not hold a Candle to him.
***************
HA! At least Sail knows the difference between your&you’re.
Heck, I’d rather read a Sail doppelganger post than a smokey incoherent ramble.
………………………………………………………………….
Yes I would have to agree his incoherent ramblings were amusing and his Twitter / Periscope videos were absolutely crazy. Especially his casino jaunts and his musings with his wife on drinking. Oh and yes you are correct he could not spell or use proper grammar if his life depended on it.

Going to miss him…… :(

#153 Gb on 08.11.20 at 5:36 pm

Garth,

I think you fail to account for a few things in this post:

1) the added CPP and OSI to the pension income

2) typically people will have their mortgages paid off (a huge cost savings)

3) most families are shelling out for RESP’s and various recreation activities for their kids (hockey, ballet etc etc)…..typically 4-5K + per year….this expense ends

4) 2 cars if both works…..can now be easily reduced to one vehicle (big saving on the extra monthly, gas and insurance)

5) A little nitty gritty but depending on your occupation, the clothing expense drops…..Possibly 1-2K.

So I disagree with you in reference to the cost of living situation in retirement.

I do however agree with you on the perils of assuming a DB pension plan is gold plated……it’s out of your control and could easily disappoint. So…..having a decent back up portfolio would be prudent….yes

#154 Doug in London on 08.11.20 at 9:22 pm

@CJB, post #17:
Why NOT retire if you can afford it? I can say I LOVE being retired. If you want to go anywhere you don’t have to fight to get enough vacation time, you just go. I find there’s ALWAYS something to do retired. It’s awesome, I can sleep in as late as I want, take my time doing what I want, and if I go anywhere I can go during the week when it’s not so crowded. I enjoyed being in Grand Bend on Monday, doing fun things like parasailing and riding a Seadoo, without the weekend crowds. At long last I have time for other interests and hobbies. Only a fool would keep working and endure the ball and chain of a job if they can afford to retire and be free. Life goes by fast with each passing day, you’re not getting any younger.

#155 John on 08.11.20 at 10:26 pm

#11 Stone on 08.10.20 at 2:44 pm

Some days I truly wonder if the research and effort put into this blog is worth it, when the reaction is ‘nothingburger.’ Maybe it’s time to leave you to your own wondrous intellect, while I move on to something more useful. – Garth
———————————–

Garth, thank you and please ignore him. He totally missed your point. He only speaks for himself.

#156 George S on 08.12.20 at 10:03 am

I have been retired for four years on a federal DB pension. I will tell you that even if your pension is almost the same as your pre-retirement income there is going to be a serious shock when you retire. A lot of your time was spent in a controlled environment where you had plenty to do to keep yourself amused and upon retirement you have to entertain yourself for about 50 extra hours a week. Travel is expensive for most people. You really don’t want to “live like a refugee” (I always think about that line from that song) unless you absolutely have to.

After 25 years of contributions I only had an accumulated total of $35k in RRSP contribution room. The premiums for a federal DB pension are so high (you have to include “employer’s contributions” too because they are part of your compensation for the job) that you have very little RRSP contribution ability so if you want to have any accumulation of tax sheltered investments you are left with TFSAs and your primary residence.

The high premiums are the reason that federal DB pensions pay out a reasonable sounding pension. If you play around with MS Excel using your salary and various investment amount and return scenarios you will find that if you invest the same amount as you are investing each year in your own self administrated DC pension plan that you will get about the same amount of pension after the same number of years of contribution. I recommended to my kids that they put 18% of their income into RRSPs or DC pension plan each year and then take their tax refund and top it up to the TFSA max. It is almost the only way to get an individually administered pension plan to be adequate at an earlyish retirement age.

The big plus for a big group DB pensions plan is the spreading out of risk over a large group of people and having large amounts of money to move around, it is more efficient and has very low management costs compared to an individual plan. In addition, because it is a large group, there are going to be some people that die young, some people that are single, some married, some that live to 115, etc. So that each individual only has to save enough money to cover their pension until about age 86, the average age of death of somebody that has survived to 60 years old (I think it is 84 for men and 87 for women)

The big downside to DB pensions is that they can are generally a gigantic pool of money that attracts all sorts of “predators” so they are inherently unsafe. There is a book that makes very interesting reading titled “Retirement Heist”

Your recommendation to commute your DB pension if you can is a good one. The calculations are done actuarially and are based on a relatively low rate of return on investments. Providing you get a good financial advisor you can be way ahead of the game when you do retire.

I find that there are quite a few gems of advice in the comment section as well as the text of your blog posts. Very consistent advice over the years. Much appreciated.