Retirement checklist

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RYAN   By Guest Blogger Ryan Lewenza
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Retirement is a big deal! We work our butts off for decades, socking money away every year so that we can build up enough savings to fund our retirement years. How much do we need, what taxes will we pay in retirement and what happens with my estate when I’m gone? These are common questions we get from clients in or approaching retirement and it requires a lot of analysis and planning to ensure clients get it right. Today I provide a ‘checklist’ of key aspects that need to be considered and worked out to ensure a successful and rewarding retirement.

First up is you need a financial plan that maps out your retirement spending needs and the portfolio cash flows that will help fund the retirement expenses. This is absolutely critical as you need to see the detailed numbers so you can better visualize your retirement picture, mapping out the years ahead and how it’s all going to be funded. Plus I find this exercise greatly helps people in making the decision of when to actually pull the trigger and retire.

Our certified financial planners work with our clients in building out these retirement plans and they focus on things like:

* Estimating your annual expenses in retirement. Our planners go through a detailed spending list to help clients determine their annual spending amount. As a general rule you’ll need 70-80% of pre-retirement annual income to fund your retirement. There are three stages of retirement – early, middle and later stages – which has different implications on spending patterns. The goal of the plan is to map out these different spending patterns over time (e.g., higher initial spending as retirees travel more).

  • Forecasting returns and cash flows from the investment portfolio. This includes determining the annual income from the portfolio, making conservative forecasts for market growth (we use 3% to be on the conservative side) and future long-term inflation levels (we continue to use 2%). Using these estimates we can develop the projected growth rates from the portfolio, which then goes into calculating how much the portfolio can safely provide in annual income without running out over the client’s life. We then compare this analysis to the estimated expenses to make sure they line up. If not, then we would look at making adjustments like cutting back on spending or increasing savings ahead of retirement.
  • In determining retirement cash flows we incorporate personal and government pensions, annuities and other income sources. For some clients we include a scenario where they sell their home and re-invest the proceeds to help fund their rent and other retirement expenses.
  • Finally we overlay taxes in the analysis, as our planners strive to minimize taxes while maximizing government pensions.

Second, you need to figure out what you’re going to do with your government pensions like CPP and OAS. For CPP the focus is on when to start receiving it. You can start receiving the CPP between the ages of 60 to 70 with the standard age of 65. Readers of this blog know Garth’s preference is for taking CPP benefits early (age 60) as he prefers the ‘bird in the hand’ approach and if the government is going to give you money, then take it.

Third, you should review your health care situation to ensure you’re covered for anything that may arise. While we have a pretty good public health care system it will not cover everything so some may need to consider supplemental health care coverage. According to a survey from Global News, they found that respondents expect to pay $5,391 in out-of-pocket expenses annually after the age of 65. The focus of any supplemental plan should be on covering drug costs, potentially expensive dental costs and travel insurance.

Fourth, you need to make sure your financial affairs are taken care of in case the unforeseen happens. This includes ensuring your will and POAs are up to date and you have the correct beneficiaries on all your different accounts. The will ensures that your estate is distributed according to your wishes and the POA is there in case you become incapacitated. You should also ensure your family members or executor(s) have copies of these critical documents and have the names of the institutions and account numbers. Basically have your ‘ducks in a row’ just in case something happens as poorly planned estates can leave behind a mess for your family members and beneficiaries.

Finally, while the focus of retirement is usually around finances, there’s another important aspect and that’s the emotional side of making this huge transition. Assuming you work eight hours a day for 30 years you’re clocking in over 11,000 working hours! For many people (me included), work can define who we are, giving us purpose and a sense of self. So not only do retirees need to figure out how to fill up all those new free hours, they also have to come terms with retirement and the loss of identify, boredom and loneliness that can arise in retirement.

To address this, retirees need to be proactive and open to new things and adventures. This includes things like taking on new hobbies, staying physically active, traveling, spending time with friends and family and doing charitable work. Money and financial freedom won’t matter much if you’re not actively working on the emotional side of retirement.

Retirement can be an amazing new chapter in one’s life but there’s a lot of work and planning that needs to be done to ensure a successful retirement, so hopefully today’s blog provided a few good tips on how to get there.

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

73 comments ↓

#1 morrey on 07.03.21 at 12:20 pm

Very helpful synopsis.

#2 crowdedelevatorfartz on 07.03.21 at 12:51 pm

My Hobbies in retirement will be to keep in touch with all my blog pals,
The Ponze, Sara, Faron, Canaduh A, etc, etc etc.
Be sure to send me any forwarding addresses, emails , etc. for birthdays, weddings, Holidays, Bar Mitzvahs, etc. as I have much love, wisdom and elevator etiquette to share in my later years.

#3 SW on 07.03.21 at 12:56 pm

Good article. Thanks!

#4 Habitt on 07.03.21 at 12:59 pm

Great post Ryan. Thanks unfortunately most of the herd has a one asset strategy real estate

#5 tbone on 07.03.21 at 1:04 pm

Retirement is good , I highly recommend it .

#6 Dogman01 on 07.03.21 at 1:06 pm

#135 Sail Away on 07.03.21 at 10:35 am
Hmmm…. be careful of blind spots when investing in ESG ideals. Fraudsters abound:
He Convinced the Elite He Invested for Good. Then the Money Vanished. https://www.wsj.com/articles/he-convinced-the-elite-he-invested-for-good-then-the-money-vanished-11625238031

——————————————

Years ago a guy came into my government workplace, slick, big talker, massive vision. He sold the executive on this IT app mashup that literally “would do everything”. The IT staff were kind of slack jawed and not in a position to naysay this executive dream. The guy was just like the Mono-Rail Salesman, https://www.youtube.com/watch?v=ZDOI0cq6GZM .

He soon gained an executive position in the organization and was fired some six months later (no executive was ever fired without a huge severance , so he must have stolen or murdered someone). We had to carry on with this fantasy app project investing millions until it finally delivered something not fit for purpose and not fit for use, no one had the bravery to take ownership and cancel the train wreck. Total waste of tax payer dollars.

I bet the IBM did the same thing to the Federal Govt with the Pheonix Payroll system; https://www.cbc.ca/news/canada/ottawa/phoenix-pay-system-cost-report-1.5138036
Amazing how careless serious people can be with other people’s money. I suspect ESG is a monorail and those companies that are too woke will soon go broke.

“When I was young and naïve, I believed that important people took positions based on careful consideration of the options. Now I know better. Much of what Serious People believe rests on prejudices, not analysis. And these prejudices are subject to fads and fashions.”
– Paul Krugman

“There is a tendency to confuse good manners and good tailoring with integrity and intelligence. J.K. Galbraith”

#7 Rex Sutcliffe alias Wrecks on 07.03.21 at 1:06 pm

Very good article Mr Lewenza; and timely too. Retirement
stages (3) you mention struck home for me as I’m between the second and third (87 yrs). Retired at sixty as it was set by company and union. So I started driving a school bus until 80. I found that investing in flow through
shares one of the best ways to build wealth; DIY investing
I enjoyed but now I’m invested with your company.

#8 ogdoad on 07.03.21 at 1:07 pm

Excellent post, Ryan. Thanks

Re. 11000hrs of work defining someone. I think this is very true and I think the older you get the harder it is to ‘rewire’ habitual tendencies.

I worked about 5000hrs before throwing in the towel and the lingering effect of office politics stuck like a bad rash at first, but as the dust cleared, and the habits faded…pure ZEN baby!!

Now the challenge is how to subject the kiddoes to as much experience as possible – while staying with in a budget :)

Happy Saturday!

Og

#9 Youngguns_wc on 07.03.21 at 1:20 pm

Great article. I have an issue with “ As a general rule you’ll need 70-80% of pre-retirement annual income to fund your retirement.”

If you are 40 years old today with a mortgage, car payments and two teenage kids in hockey that might seem like an ideal range.

But closer to your retirement you “SHOULD” have your house and car paid off. Kids out of the house and on their own. In retirement you can have a high net worth and low income. Low income can qualify you for many government grants. Old age and GIS are just a few. After 65 you can also defer your property taxes. Ask people living in Point Grey how those multi millionaires do it. If most of your retirement income is coming from your TFSA (Planning Dude) than there would be no income tax on capital gains and dividends. Some people might be able to comfortably live off 40 to 50% of their pre retirement income.

#10 My Body My Choice on 07.03.21 at 1:36 pm

Relaxing on a beach is great for a couple of weeks, but after that it’s really boring.

Many people who retire early end up craving new goals and new challenges. Some go back to work part-time, self-employed, and are able to achieve a much more balanced work/leisure routine.

Some switch careers, some move out of the city and buy a hobby farm, growing boutique crops, raising farm animals as pets. They have more free time to get involved in community, working part time or volunteering. People with skills and energy and a willingness to continue to learn and grow will usually find many new opportunities.

Remember: “Adversity Is Our Strength” ;-)

#11 S.Bby on 07.03.21 at 1:42 pm

My retirement plan is to hit the lottery.

#12 Don on 07.03.21 at 1:49 pm

I don’t plan to retire until my maker retires me.

WTF am I to do with time? PRICELESS time. IMO, no one deserves to retire. TIME is too valuable. Again, that is my opinion. I am entitled to my opinion, just as Garth has the right to fly his flag.

#13 LewenzaCountry aka Prince Polo on 07.03.21 at 1:50 pm

Mr. Lewenza – hope you had a nice little holiday!

Garth quite effectively torpedoed the FIRE movement yesterday. Surely, TI must have clients that are successful in exiting the rat-race between the ages of 40-55? Do any of these early retirees ever regret it?

#14 Sail Away on 07.03.21 at 1:56 pm

#2 crowdedelevatorfartz on 07.03.21 at 12:51 pm

My Hobbies in retirement will be to keep in touch with all my blog pals,
The Ponze, Sara, Faron, Canaduh A, etc, etc etc.
Be sure to send me any forwarding addresses, emails , etc. for birthdays, weddings, Holidays, Bar Mitzvahs, etc. as I have much love, wisdom and elevator etiquette to share in my later years.

———-

Good plan.

My retirement dream is that Wrk.Dover will accept me as a perma-apprentice for instruction in the secrets of pre-industrial technologies.

#15 Marxist on 07.03.21 at 2:06 pm

The BoC criminally lets interest rates go low to bloat the real estate market. Tiff Mackle sees no inflation.

Remember…Adam Vaughan is laughing at us serfs as his home price increases every month.

Justin Trudeau has a vested interest in lumber and property investment companies.

John Tory is also a home owner living in a condo and has become extremely rich with his investments.

#16 kc on 07.03.21 at 2:11 pm

to the people who don’t understand the history of Canada and what had/has happened to the history of the “mass graves” found in areas…

it was from people dieng of natural causes. NOT being killed by nuns and schools….

understand history before you fall for everything

https://www.macleans.ca/news/canada/how-a-smallpox-epidemic-forged-modern-british-columbia/

#17 Keith on 07.03.21 at 2:12 pm

I reckon in thirty plus years, you’ll log over 60,000 hours at work 30(50 x 40) with part time gigs in the teen age and university years. Choose your occupation wisely.

#18 SoggyShorts on 07.03.21 at 2:12 pm

“… market growth (we use 3% to be on the conservative side) and future long-term inflation levels (we continue to use 2%).” -Ryan
*******************
That sounds pessimistic rather than just conservative.
If your PF is throwing off 3% while inflation eats 2% then isn’t your spending power effectively just 1% of your stash each year?
Or are these “bounce your last check” rather than leave an inheritance plans?

I get that historical returns are different than a conservative plan, but this seems extreme to me- my SWR is at just over 3.5% after inflation.

#19 SoggyShorts on 07.03.21 at 2:22 pm

“Estimating your annual expenses in retirement. Our planners go through a detailed spending list to help clients determine their annual spending amount. As a general rule you’ll need 70-80% of pre-retirement annual income to fund your retirement. There are three stages of retirement – early, middle and later stages” -Ryan
************************
Personally, I went with 100% for all 3 stages.
Early Stage: Lots of travel
Middle Stage: More comfort
Later Stage: Medical care

Other than choosing to spend time in much cheaper countries I don’t see my expenses going down.

#20 Don on 07.03.21 at 2:24 pm

#16 Absolutely.

People are so gullible and the crooked journalists know it.
They will just open the sewer press and pump out filth to rouse emotions. if not all, 99% of the dead have died of natural causes. They were not murdered and hidden away in unmarked graves. They used the words “unmarked graves” very creatively.

#21 Dave on 07.03.21 at 2:27 pm

Great post!

#22 Quintilian on 07.03.21 at 2:36 pm

Great retirement plan, if it were the 1950’s

The world has changed Ryan, your plan is a recipe for an early death from working and the stress of an overload of cortisol from observing your friends enjoying the creature comforts courtesy of the working heroes’ taxes.

If you are not wealthy through inheritance, or you are not a lawyer, or a doctor, you are better off taking cover within the tribe.

Best not to accumulate traceable assets.

Live off the government social system.

Unless fundamental changes take place.

#23 SoggyShorts on 07.03.21 at 2:37 pm

#9 Youngguns_wc on 07.03.21 at 1:20 pm
I have an issue with “ As a general rule you’ll need 70-80% of pre-retirement annual income to fund your retirement.”
closer to your retirement you “SHOULD” have your house and car paid off.

**************************
I’d include a paid-off house as income.
If your mortgage payments are $1500 and then you pay it off, simply count that as $1500 in income & expense
or
On the other side if your pre-retirement expenses included a $1500 mortgage payment then if it’ll be paid off you simply don’t count that $18,000 in your pre-retirement income when calculating your required post-retirement income.

Either way zeroes it out on both sides of the ledger.

The math is even easier if you’re a renter though:
I don’t actually own anything that matters financially (I could replace everything that isn’t sentimental for ~$25K)
So expenses remain the same until medical bills change that (hopefully not for 50 years)

M41 FIRE’d 7mo

#24 Economist on 07.03.21 at 2:40 pm

America, Canada and Britain are Orwellian prisons.

The average (bottom 80%) American or Canadian man net income is for $2,000 a month.

60% goes toward rent, higher in Toronto, NYC and London, UK . 25% for food, and 15% for transportation.

Young people don’t stand a chance for retirement.

#25 Ustabe on 07.03.21 at 2:41 pm

A number of years ago my a couple of doors down neighbour approached me and asked if I could interpret a letter he had received from Service Canada.

It was , in goverment-ese, simply telling him and his wife that they qualified for GIS and would see an increase going forward.

A couple of convos later I ascertained they had zero RRSP, zero personal pension and zero TFSA with in and around $300,000 across a credit union, a couple of banks and IG or whatever they called them selves at that time. Paid for house, no real debt. Typical worker bees.

With permission I asked my guys if they would take them on and they did.

They seem to be living a good retirement, a sturdy vehicle, a pop top camper, they travel to visit kids once or twice a year. Spend winters here, not on cruises but they never expected to cruise. I see her in the grocery store every now and then and the cart is not full of cat food. House and yard are in decent repair/shape although I notice his yard is looked after by a guy from a local church who specializes in folks who need a hand.

I have no idea what his $300,000 is doing. Nor do I know what he takes from that as income but it seems you can retire on $300,000 plus government pensions.

They appear happy at any rate. No dog tho, probably can’t afford one.

#26 TurnerNation on 07.03.21 at 2:48 pm

Odd day Friday. Dow 30 and Nasdaq 100 were jammed to highs, all day.
Yet these ETFs closed red: Semiconductors (SMH), Oil Services (OIH), Homebuilders (ITB), Biotech, (XBI) Financials (XLF)

—————–
In lawless Toronto this week a police officer was fatally run over on purpose. Two others were slashed with broken bottles elsewhere. You just know that in USA the suspects would have been stopped in their tracks – long before.
In Kanada SJW have allowed police two main tools: 1. Say Pretty Please Stop. 2. Call in a social worker/mental health rep.

– At this point is it a stretch that the people likely hired to pull down solid, heavy statues all over (how do you do this?), also were hired to set our towns on fire? At this point we cannot rule our arson or weather.

————————-
On the Economic Shutdowns globally. Ah yes the Delta Wave is here. The Sleep Waves:
https://en.wikipedia.org/wiki/Delta_wave
Have you woken up to what’s going on?
Yes the HEADlines are designed to get inside your head. This war, WW3, is for your Mind.

.‘We’re prisoners’: Australia locks out thousands more citizens as virus slip-ups mount (washingtonpost.com)

.Portugal Announces Curfews as Delta Variant Spreads Concerns (nytimes.com)

.Banning all fans from Olympics still an option, Tokyo 2020 organizers say (globalnews.ca)

.St. Louis area health officials urge all residents to wear masks indoors as delta variant takes hold (stltoday.com)

.Ontario is the only place in North America where indoor dining isn’t allowed.(toronto.ctvnews.ca)

.Saskatchewan NDP calls for COVID-19 vaccine requirements at events like Rider games (globalnews.ca)

…………………….
— Yep all for our minds.

.Neuroscience reveals how a year of social distancing broke our brains. (fastcompany.com)

#27 crowdedelevatorfartz on 07.03.21 at 2:55 pm

@#17 Keith
“I reckon in thirty plus years, you’ll log over 60,000 hours at work 30(50 x 40) with part time gigs in the teen age and university years. Choose your occupation wisely.”

+++

A 45 year work span ( 20 – 65 ) could work out to roughly 81,000 hours at approx. 1800 hours per year.

Depressing but not unheard of.

What’s even more depressing is people slave away at the salt mine for that long and have zero….zero ….to show for it.

#28 SoggyShorts on 07.03.21 at 2:57 pm

#10 My Body My Choice on 07.03.21 at 1:36 pm
Exactly! (although with short breaks I can spend far more than a couple of weeks on the beach before I get bored)

One of the things I’m looking forward to with retirement in SEA is the low-cost-no-pressure-business ideas.
I’ve got a few that will have under $5k startup costs with zero commitment.
There are, of course, huge downsides to opening a business overseas like
1. You often need a local partner who owns 51%
2. Any great idea you have will be stolen and replicated at a lower cost

BUT if you don’t actually need the money it becomes more of a way to just be involved in the local community. After a decade of running my own company for a living, I love the idea of having one(or more!) that doesn’t need to be profitable.

FIRE isn’t really about retirement, it’s about not needing to work.

#29 Joseph R on 07.03.21 at 2:57 pm

#15 Marxist on 07.03.21 at 2:06 pm
The BoC criminally lets interest rates go low to bloat the real estate market.

——————————————————

The BoC kept the interests low to protect the oil sands following the oil price crash and the corporate exodus in 2015-16.

Real estate is paying the price for Trudeau’s protection of the oil sector, our biggest export.

That’s news to me that JT as interests in the lumber sector. Any sources on that?

That said, lumber future prices dropped 40% in June. The lumber crisis looks to be behind us. You will have to wait a while before you see prices drop at Home Depot.

#30 I Hate Toronto on 07.03.21 at 3:19 pm

I am going to retire just so that I never have to go back to downtown toronto ever again. No longer commuting to that hellhole is like being cured from a chronic disease.

#31 Barb on 07.03.21 at 3:33 pm

“…the loss of identify, boredom and loneliness that can arise in retirement.”

——————————–
Good post, Ryan.

The first one in my case.
My opinions were more valued among peers in my career.

But happy to say I’ve never had one bored or lonely retirement day in 20 years.

#32 tbone on 07.03.21 at 3:54 pm

I have a stash at BMO in mutual funds that i have ignored for 30 years . After fees i netted 7.3 % per year .
3% does seem conservative .

#33 TurnerNation on 07.03.21 at 4:10 pm

Better save up and retire abroad. Life in Kanada:

Oh boy control over our travel again. I mean we can’t have healthy people – who must take anyway 4-6 CV tests for every return airplane trip, travelling can we?

.Over 270K Canadians got the Covishield vaccine. They may not be eligible for EU travel (globalnews.ca)

— ThoughtCrimes detected. Lose your career.

Cathy Jones is off CBC’s 22 Minutes after 28 years
https://www.thecoast.ca/halifax/cathy-jones-is-off-cbcs-22-minutes-after-28-years/Content?oid=26732325
Though Jones is not at liberty to discuss the details of her departure, she denies rumours that she was fired because of political differences or a refusal to comply with COVID-19 protocols

———–
———-
What’s next? LAND the goal of any war.
March 2020 when “WW3” began. LANDlords came under immediate attack with the Keep Your Rent movement, a masterful national marketing campaign.

– Next up you were banned from the land. All parks, playgrounds, national and provincial parks, sports fields, trails, boat launches were OFF LIMITS.

What could be next in the Get off The Land dept?
Does this jive with what you are seeing in the media, today?

https://www.vancouverislandfreedaily.com/news/lawyer-large-scale-transfer-of-crown-land-to-first-nations-will-shock-b-c-s-system/

Lawyer: Large-scale transfer of Crown land to First Nations will shock B.C.’s system
Jack Woodward says the next generation will see large chunks of B.C. move to Indigenous ownership

#34 the Jaguar on 07.03.21 at 4:12 pm

Good advice today, Mr. Lewenza.

The comment “So not only do retirees need to figure out how to fill up all those new free hours, they also have to come terms with retirement and the loss of identity, boredom and loneliness that can arise in retirement.”. Hopefully will be well absorbed.

Most people in the modern world are just running so fast that the world is passing them by.

They can make all the right financial moves, but if they don’t stay on top of, and invest in their relationships they can wind up feeling rather empty when retirement comes around. Men suffer more.
Unfortunately our societal norms of judging men as the ‘great providers’, while ignoring their emotional needs leave many in crisis when retirement comes around. A colleague of mine once told me that “After the kids were born, everything changed. It was steak for the kids and hamburger for me, and when the kids left the nest we couldn’t pick up the pieces of who we were anymore as a couple”. Imagine how retirement impacts that scenario. Be vigilant in this regard.

On a more positive note, we are all very thankful here in Calgary that the intense heat wave has finally ended and we are back to mid to high twenties. Last night the sky opened up and the rain fell hard. We are grateful. Alberta is again ‘Open for Business’, the pandemic is on the run, and unless anyone missed their cue..” It’s a great time to be alive”. Thank you to all my fellow citizens for you sacrifice, your compassion, and your humanity. Onward.

Feels like it must be time for “La Fiesta Del Mariachi”……………

https://www.youtube.com/watch?v=12_eYjSP5G8

#35 Dwight Botnen on 07.03.21 at 4:13 pm

On their death bed, nobody ever wished they had spent more time at the office.

#36 Science Based Retirement on 07.03.21 at 4:27 pm

Excellent, just excellent, but then you mention:

“Readers of this blog know Garth’s preference is for taking CPP benefits early (age 60) as he prefers the ‘bird in the hand’ approach and if the government is going to give you money, then take it.”

Garth is WRONG, dead WRONG on this unless all of his clients are deathly ill or too poor to get by without taking CPP early. Show us the math! In almost no case will a person be better off taking CPP early. Most should hedge their bets by taking it at 66 to 68 – odds are totally in their favour that by doing so they will obtain more in lifetime CPP benefits AND they will have substantially protected themselves from market risk, inflation risk, and longevity risk. By taking CPP at 60, they squander this protection.

#37 Penny Henny on 07.03.21 at 4:30 pm

Assuming you work eight hours a day for 30 years you’re clocking in over 11,000 working hours!-Ryan

#17 Keith on 07.03.21 at 2:12 pm
I reckon in thirty plus years, you’ll log over 60,000 hours at work 30(50 x 40) with part time gigs in the teen age and university years. Choose your occupation wisely.
////////////////

He must be deducting coffee, smoke and washroom breaks.

#38 NSNG on 07.03.21 at 4:46 pm

Rich Dad, Poor Dad

If you haven’t read this book, you should.

I have heard about this book for years but I never got around to reading it. I finally read it recently since I had some free time and was bored.

It is a mindset changer. Many of the concepts I already knew and practiced so it wasn’t revolutionary for me but it did help fine-tune some thoughts.

One of the things it talked about was a board game called cash flow. The book is probably a couple of decades old now and so, having read about the game, I figured there was an app for that. No luck. Hmmm. I decided to do a web search and I found an online version of the game so I gave it a run. It is very basic – probably targeted at kids – but it does teach some simple concepts. If you have kids you might want to give them a run through it to change their thinking about how money works after you have tried it yourself.

Couple this game with the book and it will probably plant a seed in you. I’ll leave it at that.

https://www.richdad.com/classic

#39 Ryan Lewenza on 07.03.21 at 4:54 pm

Soggyshorts “ If your PF is throwing off 3% while inflation eats 2% then isn’t your spending power effectively just 1% of your stash each year?”

There’s also the portfolio yield component which currently is 2.5%. So we use 5% for total portfolio return for our plans. Now we target and do provide returns above this 5% but we tell clients plan on 5% so if you get 7% then great but this way you know you’re covered. – Ryan L

#40 Linda on 07.03.21 at 4:57 pm

Thoughts on retirement. First, my work never defined who I was. It was something I did to ensure I could achieve whatever goals I set myself – purchasing a house; setting aside funds to ensure my eventual retirement was going to be more than subsistence level living; travel etc. Second, I was concerned whether I might have difficulty managing to remain engaged, active etc. once I retired. All those hours spent working, commuting to/from work added up to quite a lot of time. So I made lists of things to do & try. I can report that i still haven’t done everything on those lists because the time I thought I would have in abundance disappeared like snow during a Chinook. The days just fly by! i had thought once I retired things would slow down time wise. Not! As for loneliness, there are many group activities available to retirees. Plenty of opportunities to meet people or at least be around them. Third, income. Pretty well every retiree I spoke to prior to taking the plunge told me I wouldn’t need as much income as I thought I would. They were right. Working for a living costs more than you think it does. Basically it comes down to how you manage money. If you are the kind of person who lives within your means prior to retirement chances are you will not have any financial concerns once you retire. If you are the kind of person who lives payday to payday & always runs short of funds retirement isn’t your best option, because that kind of behavior isn’t likely to end once retired.

#41 Irish Stew on 07.03.21 at 5:16 pm

Retirement is always a balance between living for now and ensuring you have enough money set aside for later years.

Some of the elders I speak w/ say they struggle to get their money out….and never have as much as they thought they had after tax.

I have missed out on many properties and other purchases in pursuit of retirement goals – I am 46 years old. While my retirement is funded well now – I feel I have neglected the here and now as well in its pursuit.

Be happy w your decisions.
You live only once.
Find balance.
Help others who need it.

#42 Nonplused on 07.03.21 at 5:29 pm

I met an old man when I was a young newly minted engineer. Once the crew left for the day me and another senior engineer would grab the total station and mark out the lines for the next day’s activities.

The old man was a retired surveyor himself so he liked to come regale me with tales from his many years stomping around the forests of BC, mostly surveying pipelines and logging.

One day he came up to me and announced “Well Nonplused, I’m going back to work! I don’t know if I’ll see you again before you leave.”

“Back to work?” I asked, “You are 70 years old!”

“Well I’m out of money.”

“Out of money? Why did your retire then?”

“Well Nonplused, I’ve been married 7 times and divorced 5. I kind of learned not to keep too much money in one place.”

The lesson of the old man is thus: “The best laid schemes o’ mice an’ men. Gang aft a-gley”.

Save for retirement if you can, because failing to plan is planning to fail. But it doesn’t hurt to have a backup plan.

My friends and I will during nice summer days go for a ride on our motorcycles usually with a pub in some small town as a destination. Lunch and a beer before we head home. The pubs are usually lousy with other bikers, many with long hair, beards, tattoos, and an expensive Harley parked out front. I often wonder to myself “How are these folks getting along? What is their source of income?” But yet there they are enjoying the day and seemingly without a care in the world. Are they all gang members selling drugs? That can’t be there are literally 1000’s of them. Are they all investment advisors? Do they all have trust funds? Mystery abounds. One thing is for sure they don’t work at a bank.

#43 History is hard on 07.03.21 at 6:03 pm

#16 kc on 07.03.21 at 2:11 pm
Did you read that link kc? While it is likely that most in the unmarked graves died of disease, this article does not really support your point.
Smallpox didn’t exist in NA until settlers arrived. The outbreak could have been contained with a quarantine (sound familiar?). It’s just another example of the callous treatment of indigenous people.

#44 ogdoad on 07.03.21 at 6:05 pm

oh, Ryan, btw. 3%? So what would you recommend to the clients who want to keep some/most/all of their principle? You want to beat market expectations, don’t you?

Ahhh. Fail safe. So when markets go south one year the diff. btw. your forcast and reality appears less. Love it!

Og

#45 Don Guillermo on 07.03.21 at 6:09 pm

#34 the Jaguar on 07.03.21 at 4:12 pm

Feels like it must be time for “La Fiesta Del Mariachi”……………

https://www.youtube.com/watch?v=12_eYjSP5G8

************************************
Great video, Thanks Jag. It’s filmed in front of the church (Iglesia San Rafael o Santa Escuela de Cristo) in beautiful San Miguel de Allende. I know many Gringos retired there that are certainly not bored and/or lonely. Our famous Canadian Taller Cranston was living there when he passed at the much too young age of 65.

#46 crowdedelevatorfartz on 07.03.21 at 6:18 pm

@#33 Turner Nation
“Jack Woodward says the next generation will see large chunks of B.C. move to Indigenous ownership”

++++
Private Land.
Does that mean the Taxpayers will still be on the hook to put the forest fires out?

#47 oops on 07.03.21 at 6:23 pm

#22 Quintilly somth.

Sorry you missed the boat.

Way more expansion on fundamentals needed

#48 cuke and tomato picker on 07.03.21 at 6:38 pm

Excellent Ryan perfect information for people to prepare for retirement. We are very thankful that we bought a smaller home and yard for our retirement because at 62 and 58 we had a good deal of energy. However now at 78 and 74 we do not have the zip we used to. We have downsized our flower beds and garden plot to make life easier for ourselves.

#49 Bezengy on 07.03.21 at 7:00 pm

I’ve spoken to literally hundreds of men who were planning to retire, all who asked “how much do you think I need to retire?” After some serious talk about about other factors like identity, quality of life, etc., ninety nine percent of them all asked me one simple question. “So, how much do you think I need to retire?” Many men I know returned to work shortly after retirement for various reasons, but certainly not because they needed the money.

#50 George S on 07.03.21 at 7:01 pm

Turner Nation #29 or thereabouts said:
“.Saskatchewan NDP calls for COVID-19 vaccine requirements at events like Rider games (globalnews.ca)”

You should realize that nobody listens to the NDP in SK any more. They have turned into persistent whiners. Scott Moe, our Premier said ‘we’re close enough to 70% vaccinated, all restrictions stop on July 11th’
He listens to the public health advisor and does what he says to do.

#51 Joseph R. on 07.03.21 at 7:31 pm

#42 Nonplused on 07.03.21 at 5:29 pm

Are they all gang members selling drugs? That can’t be there are literally 1000’s of them. Are they all investment advisors? Do they all have trust funds? Mystery abounds. One thing is for sure they don’t work at a bank.

———————————————————–

Retired Dentists would be my guess.

#52 Dude Looks lIke a Lady on 07.03.21 at 7:58 pm

Hi, just curious if comment #45 from Eric Brazau should be allowed on the blog?

Thanks.

That slime slipped through. Now gone. Thanks. – Garth

#53 Wrk.dover on 07.03.21 at 8:58 pm

The best I can come up with is, pre-retirement, live on your projected retirement income, while saving the excess for retirement.

The money earner in this household (not me) did just that for her last four years of employment, and is still saving that extra $1000/mo, 15 years into retirement, because the retirement income wrk.d out to be more.

It turns out, you only need a couple of thousand a month to live and another thousand a month for travel, in non covid years, if your property tax, insurance, utilities yada yada car budget, fixed recurring costs are under a thousand/mo within that couple thousand/mo. to live on.

You’ll need the big bucks when you hit stage three!

#54 Damifino on 07.03.21 at 9:12 pm

#40 Linda

I can report that i still haven’t done everything on those lists because the time I thought I would have in abundance disappeared like snow during a Chinook. The days just fly by! i had thought once I retired things would slow down time wise. Not!
——————————–

Absolutely true! And I’ve been out for 14 years. Where did all that time go? It certainly wasn’t spent brooding around the house. It takes so little to eat up a day.

#55 Lead Paint on 07.03.21 at 11:08 pm

#16 kc on 07.03.21 at 2:11 pm

Are you trolling or fully ignorant? Did you read the article you please posted?

“The colonial authorities … knew that would spread smallpox throughout British Columbia,” she says. “That was an act of genocide against Indigenous people. … At that point in time the [government] wanted to be able to claim those lands without having to compensate or recognize Indigenous title.”

Imagine being indigenous and reading the likes of you.

#56 Lead Paint on 07.03.21 at 11:11 pm

Today is the 50th anniversary of the death of Jim Morrison. Can’t help but think that the late great Smoking Man has him cornered in an awkward conversation in heaven.

#57 crowdedelevatorfartz on 07.03.21 at 11:11 pm

@#43 History is Hard
“Smallpox didn’t exist in NA until settlers arrived.”
+++++

Actually some indigenous bones found in both North and South American at an ancient aboriginal gravesite showed signs of disease.

https://www.nytimes.com/2002/10/29/science/don-t-blame-columbus-for-all-the-indians-ills.html

The healthiest aboriginals were nomadic and lived off the land and sea, rarely grew crops, and didnt live in urban settings.

The large “City States” of South America were rife with disease and there was a marked decline in their health 1000 years before Columbus arrived.

Smallpox, measles , influenzas were all new to the natives….and decimated them.
As had happened for generations of European countries for hundreds and thousands of years. ( Black Death ring a bell?).

The Europeans didnt intentionally arrive to spread plague and pestilence. It happened.
Did they take advantage of it?
Of course.
As any military backed civilization exploring a new country would.
Dare I suggest, if roles were reversed and the natives of the Americas arrived in Europe with new strains of disease to decimate the population 500 years ago…..

We wouldnt be having this conversation right now because they would just apologize and leave?

#58 Tarot Card on 07.03.21 at 11:48 pm

Thanks for the Blog Garth
Excellent post Ryan
I have been retired five years and it’s not what I expected.
First I highly recommend you get into physical shape as soon as you can, because it gets harder and harder every year you age.
Second my biggest problem is putting it off till tomorrow, unlike work, in retirement there are no deadlines.
So if you are good at day planning and goals then set them up!
Three, everyone has advice, pay off the mortgage as quick as you can and so on. I have 350,000 in TFSA earning north of 10 percent, why would I pay off a 250,000 mortgage at 1.68 percent?

Garth has covered this topic many many times.
I have friends who all they work to pay off the mortgage quicker. A financial planner can determine what’s best for you.
Forth, I do agree with working part time I have a small business earning between $500 and $1,000 a month.I also day trade 500 to $1,000 a month it’s fun. But gosh some days it’s crazy look at Ballard Power this stock moves three or four dollars in both directions in a day?
It’s down from $55 dollars to around $22 And Cargo Jet this puppy moved $10 in one day, and some days moves five or six dollars in both directions Crazy world. It’s down from $250 to $186 Nerves of steel.

And my slow moving ETFs move 5 to 10 cents a day and earn 6 to 8 percent dividends. And are always higher by the end of the year, Again what works for you.

Fifth, to the poster above about doing the math on taking CPP early, again Garth has covered this many times but I will give you a real example.
My wife’s CPP at 65 was $900 at 60 it was $600 real numbers as my wife just turned 65. Now forget about OAS for a minute.
My wife took CPP early put the $600 a month into a TFSA, unlike her friends who spent the money on cruises, she now has over $40,000 @10 percent, if she now withdrawals the difference of $300 a month and still earns 10 percent the money will never run out. And the best part it’s tax free. So while you wait to 65 you will pay taxes on $900 my wife will have $40,000 saved and only pay taxes on $600 a month.but again consult a financial planner and use a percent that works for you.

It’s called the eighth wonder of the world….. compound interest.

Remember my favourite rule what works best for me may not be the best solution for you.

Good luck! retire heathy, your body is your best investment.

#59 IHCTD9 on 07.04.21 at 12:01 am

#9 Youngguns_wc on 07.03.21 at 1:20 pm
Great article. I have an issue with “ As a general rule you’ll need 70-80% of pre-retirement annual income to fund your retirement.”

If you are 40 years old today with a mortgage, car payments and two teenage kids in hockey that might seem like an ideal range.

But closer to your retirement you “SHOULD” have your house and car paid off. Kids out of the house and on their own.
——-

In our case, we never saw most of our income. Things have slowly improved over the years as the big bills get knocked over. 5 more years (2X uni tuition support) and we’re in the clear for the first time ever. We’ve lived on way less than half our take home since day one (kids, private schooling, mortgage, tithing, investing etc…). A few years we spent running into overdraft regularly because we ran out of cash before we ran out of month – but the priorities we set were paid every time, one way or another.

Seeing 70-80% of our income would be a windfall of epic proportions after all these years never getting half that much to land in our chequing account.

The basic COL bill is only ~35K/yr in a paid off, empty nest house out here. Our CPP’s/OAS’s/DBP should be 60K minimum (at 65). Just about every retired couple I know is getting by (today) for under 50k/yr.

#60 Summertime on 07.04.21 at 12:36 am

Shouldn’t a ‘G7 country’ have a decent pension plan in first place, either through federal, provincial government or through a mandated employer and employee contributions?

And Ryan, what is up with that great public health care system so people now have to start thinking about private care?

People, we sell this dream as a ‘social country’, remember that.

with houses priced at 20 time annual income, and retirement mission impossible.

#61 Nonplused on 07.04.21 at 1:08 am

#51 Joseph R. on 07.03.21 at 7:31 pm
#42 Nonplused on 07.03.21 at 5:29 pm

Are they all gang members selling drugs? That can’t be there are literally 1000’s of them. Are they all investment advisors? Do they all have trust funds? Mystery abounds. One thing is for sure they don’t work at a bank.

———————————————————–

Retired Dentists would be my guess.

—————————————–

That made me laugh. Steve Martin in “Little Shop of Horrors” came to mind.

#62 Bottom of the 9th on 07.04.21 at 1:37 am

#7 Rex Sutcliffe alias Wrecks on 07.03.21 at 1:06 pm

Very good article Mr Lewenza; and timely too. Retirement
stages (3) you mention struck home for me as I’m between the second and third (87 yrs).

____________________

Wrecks … sorry to break it to you, but you are actually in the 4th stage. If you were a baseball game, you would be in the bottom of the 9th. Maybe even overtime! Just don’t pee off the umpire.

#63 Schools out for summer! on 07.04.21 at 2:00 am

#16 kc on 07.03.21 at 2:11 pm

to the people who don’t understand the history of Canada and what had/has happened to the history of the “mass graves” found in areas…

it was from people dieng of natural causes. NOT being killed by nuns and schools….

understand history before you fall for everything

https://www.macleans.ca/news/canada/how-a-smallpox-epidemic-forged-modern-british-columbia/

_____________________

Great post … except for the fact that residential schools didn’t even exist during the time frame of this smallpox epidemic.

Please feel free to give me more history lessons so I can debunk them.

#64 Ryan Lewenza on 07.04.21 at 8:53 am

ogdoad “oh, Ryan, btw. 3%? So what would you recommend to the clients who want to keep some/most/all of their principle? You want to beat market expectations, don’t you?”

For our financial plans we assume a 5% total return which is broken up into 3% market growth and 2% portfolio yield (dividends and interest). We target and have delivered 7% returns from our balanced portfolio but when developing these plans we base it on the more conservative 5% total return. We do this since it’s in our nature to be more conservative and ensure all bases are covered. – Ryan L

#65 Sail Away on 07.04.21 at 9:00 am

A few passages from John Muir’s, ‘Travels in Alaska’:

The Trip of 1879

p. 94: ‘Strolling about the [Kupreanof] village, I found a lot of human bones scattered on the surface of the ground or partly covered. In answer to my inquiries, one of our crew said they probably belonged to Sitka Indians slain in war. [Thlinkit] Chief Yana Taowk seemed to take great pleasure in kicking the Sitka bones that lay in his way.’

p. 126: ‘While I was looking among the rocks and bushes for a smooth spot for a bed, I found a human skeleton. My Indians seemed not in the least shocked or surprised, explaining that it was only the remains of a Chilcat slave. Indians never bury or burn the bodies of slaves, but just cast them away anywhere.’

#66 Dharma Bum on 07.04.21 at 9:26 am

For the majority of my 35 working years, I woke up miserable. I never had a job that I really liked. Well, not for long, anyway. I pretty much dreaded going in to the office. Every day.

Ever since I started working it was like, every single day of my life was worse than the day before it, so that every day, was the worst day of my life.

https://www.youtube.com/watch?v=-81WdyD-8Ro

Then I retired. Instant happiness. Now, every single day of my life is BETTER than the day before it. So, it’s like every day is the BEST day of my life. It’s fun to wake up happy.

Saving and investing for 35 years was the key to salvation. Hallelujah. Eff-you money is sweet.

It’s good to be a bum.

#67 Jane24 on 07.04.21 at 9:38 am

You do not need 70 to 80% of your pre-retirement monthly cash to enjoy retirement. This is scaring folk without cause. Shame on you Ryan. IF all your bills are paid which means no kids still at home, no car loans, no big debts and no mortgage you can enjoy a wonderful life on 50% of your pre-tax income.

I retired at 59 and am now 66. I have never been so wealthy in my life. Think very carefully before you upsize your house in your 50’s. You are moving in the wrong direction. Get the sucker paid off or move down.

#68 IHCTD9 on 07.04.21 at 10:12 am

Ryan, what do you think of a couple stuffing their TFSA’S in the standard B+D right thru retirement? For passing on purposes assuming not needed to live off of.

#69 Dharma Bum on 07.04.21 at 10:14 am

#2 crowdedelevatorfartz

My Hobbies in retirement will be to keep in touch with all my blog pals,
The Ponze, Sara, Faron, Canaduh A, etc, etc etc.
———————————————————————————-

I am highly saddened to learn that I did not make the cut.

#70 Ryan Lewenza on 07.04.21 at 10:33 am

Jane24 “You do not need 70 to 80% of your pre-retirement monthly cash to enjoy retirement. This is scaring folk without cause. Shame on you Ryan. IF all your bills are paid which means no kids still at home, no car loans, no big debts and no mortgage you can enjoy a wonderful life on 50% of your pre-tax income.”

I did state it was a ‘general rule’ and your personal situation is not the norm based on my numerous conversations with clients. But I guess shame on me for providing some general figures and points. – Ryan L

#71 Linda on 07.04.21 at 6:46 pm

#54 ‘Damn’ – I have a theory. There are little time elf thieves who move the clock hand when you aren’t looking:) I’ve tried to catch the little devils but no luck thus far……

#72 RT on 07.04.21 at 7:39 pm

@Ryan why do you choose a guideline based on pre-retirement income vs pre-retirement spending?

It seems to me that since people can control their pre-retirement spending by making smart / difficult choices, they can more quickly reach their savings goal. Income on the other hand is a bit less controllable.

I get that a rule of thumb might be to expect that people’s lifestyles grow to match their income, but it seems natural to question this if the tradeoff is years more at work.

#73 Don't Believe The Hype on 07.05.21 at 11:11 am

Excellent post, Ryan.
@ Tarot Card on 07.03.21 at 11:48 pm Thanks for your insight. Very useful.