Let’s talk retirement

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RYAN   By Guest Blogger Ryan Lewenza
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For our younger, millennial readers you can probably skip today’s blog since I’m going to focus on some of the factors needed to ensure a successful retirement. So you younglings can get back to discussing the benefits of cryptocurrencies, the importance of social responsibility in investing and the best hair products for your beards.

For our older readers in or nearing retirement, grab a cup of coffee and settle in as I’m going to review some important pieces and considerations for a stress-free and rewarding retirement.

First up is knowing how much investments and assets you need to fund your retirement. Of course the main determinant of this is how much ballin’ you anticipate doing in retirement. Are you going to go on many trips? Will you have a secondary property or rental that you have to account for? How much will you give to family and charities? Determining your lifestyle and expenses in retirement is key so it requires a lot of thought and planning. A detailed financial plan is critical to this, which I’ll cover later.

On how much you need let’s start with the ‘Rule of 4’, which is a general rule-of-thumb that with a 4% annual withdrawal rate from the portfolio, there is a very low probability of exhausting or outliving your money. I covered this in a past blog and I believe a 5% withdrawal rate is totally doable and still conservative, but let’s use the 4% withdrawal rate as our starting point.

You can determine how much assets you will need by dividing your estimated yearly income by 4%. For example, if you forecast your spending in retirement of $50,000/year, you would need a portfolio of $1.25 million. Double that ($2.5 million) to support retirement spending of $100,000. This gets you a quick, back-of-the-envelope calculation for your retirement nest egg. But now you need a detailed financial plan to really get into the numbers.

Investments required to support Income Streams

Source: Turner Investments

During the planning process we review our client’s different income sources including CPP, OAS, pension income, and any income from investments/businesses. We also review all the different investments to come up with a detailed forecast of how much we can draw from the portfolio. This is essentially the ‘plug’ in the retirement calculation, as we compare expected expenses with the client’s incomes to then determine the amount of investments we draw from over time to support the monthly or yearly draw.

The financial plan maps out all the different income streams and our financial planners employ strategies to help minimize the tax hit while trying to maximize government benefits. The plan also addresses the future estate and reviews key documents and strategies to deal with the estate process and distribution of assets. The plan is very detailed covering all key aspects of retirement planning and our planners can stress-test the portfolio for different scenarios (e.g., if clients want to assume a higher rate of inflation in their planning).

And the numbers show that retirees with a financial plan feel much more confident and at peace with a completed financial plan. According to a Charles Schwab survey, 65% of people with a financial plan say they feel financially stable, while only 40% of those without a plan feel the same level of comfort.

Why? Because financial plans help address the key risks to retirement. In Fidelity’s annual retirement report, they always highlight the five key risks to financial security in retirement – inflation, health care costs, withdrawal risk, longevity, and asset allocation. The financial plan helps address all these issues.

The Five Key Risks to Financial Security in Retirement

Source: Fidelity

Finally, retirement is not just about the numbers and dollars and cents. There’s a whole psychological component to retirement, which arguably is just as or more important than the numbers.

We spend roughly a third of our lives at work and from this we derive a lot of our personal identity and purpose. So when you transition from working five days a week to zero days, there’s a big adjustment you will go through psychologically. In fact, according to Dr. Riley Moynes, there are four key phases of retirement, which he covers in an interesting TEDx Talks.

He calls phase one the ‘vacation phase’, where you “wake up when you want, do what you want with no set routine.” This phase represents people’s ideal retirement but is short-lived, lasting a few years or so. After you’ve gone on the third cruise and multiple trips down to Florida you ask yourself “Is that all there is to retirement?”

Now you’re in phase two, which is a period of feeling lost and wondering what’s next. Many new retirees struggle with the loss of a routine, that sense of identity and purpose and those relationships you had to give up when you were working. This is a period of “fear, anxiety and even depression” for some.

But after this period of uncertainty and contemplation you move on to phase three, which is experimentation and trial and error. We ask ourselves how can I make my life meaningful again? How can I contribute? During this period you try different things from volunteering, joining a club, and helping look after the grandkids.

Finally, if successful, then you move on to phase four of ‘reinvention and rewire’. According to Dr. Moynes not everyone gets to this phase but based on his studies and experience, these are “the happiest people he’s ever met”. I don’t think my dad’s at this phase yet so I’ll be forwarding this blog off to him.

So there you have it.

A successful retirement will require detailed planning and a deep consideration of both the financial and psychological aspects of retirement. So get to work and start the dialogue with your financial advisor. That’s what we’re paid for!

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

 

136 comments ↓

#1 Paddy on 12.03.22 at 10:44 am

“For our younger, millennial readers you can probably skip today’s blog since I’m going to focus on some of the factors needed to ensure a successful retirement”……uh what Ryan….no, everyone needs to read and heed this advice!

A great book I read recently(I believe it was mentioned by a fellow blog dog) is “Die with zero” by Bill Perkins.
He made an excellent point about giving money away while you’re alive instead of waiting till you’re dead.

#2 ogdoad on 12.03.22 at 11:02 am

Ya, third of your life is at, for 70% of the first world population, a go-nowhere, one horse, miserable, middle managed, toxic, competitive, s*hole….but you get to buy a tesla – *golf clap*

only to realize that you’re not important, you’re irrelevant, boring, suffer from stress related illnesses, old, old feeling and dying faster and faster…forgotten losers…but you’re REALLY good at frowning – YAY.

FIRE, peeps! If you can. Stop working towards a stupid car or a 3-car garage (how irresponsible is that, really?)…work towards your 1.25mil – should that be the goal. A tesla does not make you Elon – it makes you duped. A house doesn’t make you cool. it makes you content and boring (but if that’s your bag…have at ‘er)

I’m ear to ear….everyday!

Happy Saturday! You deserve it. Hugs!

Og

#3 Blair on 12.03.22 at 11:03 am

Ryan, when you talk about desired annual income, is that before or after tax?

#4 Bubbles on 12.03.22 at 11:07 am

That’s a great piece Ryan…
Thank you.

On another note someone else here was talking EVs and are not the green machines you think.
Trudeau and his ignorance and carbon tax cash grab and getting rid of oil ASAP is dangerous to your health.
Yup look at Germany…get rid of the nukes now burning coal. Brilliant and T2s carbon tax will offset everyone else!?
Listen to Mikes opening. Just ignorant!!
https://omny.fm/shows/money-talks-with-michael-campbell/december-3rd-episode

#5 THE DANDADA on 12.03.22 at 11:10 am

I’ll NEVER retire 100%

Always be finding a way to build those asset reserves for my family that I’ll eventually leave behind.

#6 BABY'S BUM on 12.03.22 at 11:11 am

VALUE INVESTORS never retire.

Neither will I.

#7 crowdedelevatorfartz on 12.03.22 at 11:15 am

Interesting info.
I had always assumed a 5% withdrawal rate but 4% seems reasonable.
Factoring in CPP and OAS also helps to bump up the annual income a tad.

#8 Ponzius Pilatus on 12.03.22 at 11:17 am

Great post.
I think the challenge is to find the right amount needed to retire.
Putting too much aside for your retirement could cramp your current life style.
I for myself, have already been to many “bucket list “ destinations.
So my need to travel is less.
Though I still like to revisit some of my favourites.

#9 Ustabe on 12.03.22 at 11:22 am

You have your go-go years, your go-slow years, your no-go years and your where did everybody go years.

Of course one bleeds into the other but as someone who is towards the end of the go-go years and is reluctantly accepting more and more go-slow stuff, growing older in retirement also impacts your retirement.

#10 the Jaguar on 12.03.22 at 11:31 am

For our younger, millennial readers you can probably skip today’s blog….._ RL +++

They might benefit from the bit on asset allocation, especially when it comes to registered versus non registered assets. Too many of us arrive at retirement with too many assets in registered investments, scratching our heads over how to drain the money out before mandatory RRIF requirements. Sinan touched on this recently.

Peeps never want to land too long on the subject of longevity either, dismissing it with meme’s such as ” all my grandparents lived into their early 90’s”. Maybe so, but they also ate a 100 mile diet devoid of the chemical stew that currently forms part of our food supply, and they were more active. No snow blowers, Skip the Dishes, or glare of the computer or flatscreen for hours on end. They actually went out to something called ‘dances’. Imagine that. Actuarial Tables are helpful, but the Jaguar’s thoughts are singular on longevity.
Your number one priority on retirement is staying in the best physical shape possible. Estate planning goes with the deep think on longevity as well. It’s not just for peeps with Holding Companies and Family Trusts, it’s for everybody.

As for the psychological challenges, hopefully people have brought in other interests and passions during their working years. If you lived and died solely for your nine to five existence it’s going to leave a deep hole when you finally hang ’em up. Peeps always say ” We plan to travel during retirement”, but guess what? You can’t travel all the time unless you’re really wealthy. Now get busy with those sit ups bar bells.

#11 Flop… on 12.03.22 at 11:31 am

So HSBC took me down to Main and Hastings and decided to pimp me out.

RBC came along and said I wouldn’t mind a piece of that, now I’ve got a new hole in my pants.

When they asked how much of a cut I want, they decided they knew what was best for me, and told me to take the 70/30 option.

If I wanted to go full Muppet Portfolio would this get the job done…

M48BC

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

RBC Investease Growth Portfolio.

Cash and fixed income: 30%

Symbol/Name PercentType
C
Cash
2% Cash

XGGB
ISHARES GLOBAL GOVERNMENT BOND INDEX ETF (CAD-HEDGED) UNIT
10% World fixed-income securities

XBB
ISHARES CANADIAN UNIVERSE BOND INDEX ETF
18% Canadian fixed-income securities

Equities: 70%

Symbol/Name PercentType

XEC
ISHARES CORE MSCI EMERGING MARKETS IMI INDEX ETF
7.5% Emerging market equities

XEF
ISHARES CORE MSCI EAFE IMI INDEX ETF UNIT
14.5% International equities

XUS
ISHARES CORE S&P 500 INDEX ETF UNIT
24% U.S. equities

XIC
ISHARES CORE S&P/TSX CAPPED COMPOSITE INDEX ETF
24% Canadian equities

#12 Andrewski on 12.03.22 at 11:34 am

Re health care costs, just read an article that says:
“Many people want to age at home, but it’s stunningly expensive for someone to stay at home and have 24-hour personal support worker care. In today’s dollars, it’s probably $250,000 to $300,000, just for 24-hour private care,” states Leanne Kaufman, president and chief executive officer for RBC Royal Trust.
Any opinion on that Ryan?

#13 TurnerNation on 12.03.22 at 11:38 am

How about Where to retire with the Former First World Countries being wound down? March 2020 kicked this into hyperdrive

Our Rulers using Energy as tool against us. Trust the Science! Maybe one day we will figure out the generation of electricity on a large scale. Energy Poverty, get to know it.

.For the second time in a week, Alberta’s electricity system controllers issued a warning that the grid is under extra stress. (globalnews.ca)

https://www.golem.de/news/strommangel-in-der-schweiz-elektroautos-muessen-in-der-garage-bleiben-2211-170022.html
https://www.eugyppius.com/p/switzerland-facing-an-unprecedented
The Federal Council of Switzerland has therefore published draft legislation, which outlines four tiers of escalating measures to conserve electricity and avert potential blackouts. The first prescribes a lot of temperature restrictions for things like refrigerators and washing machines. The second includes more unusual rules, such as the demand that heating in clubs and discotheques “be set to the lowest level or switched off completely,” and that “streaming services … limit resolution of their content to standard definition.” The third foresees cutting business hours, banning the use of Blue Ray players and gaming computers, and also limiting the use of electric cars, which should be driven only when absolutely necessary. A fourth and final tier mandates closure of ski facilities, casinos, cinemas, theatre and the opera


— Food supply. Watch it.

https://www.castanet.net/news/BC/397966/Avian-flu-leads-to-B-C-turkey-shortage-ahead-of-Christmas
Avian flu leads to B.C. turkey shortage ahead of Christmas

#14 Domino on 12.03.22 at 11:41 am

There are many great tools available on the web showing the withdrawal if monies. The real unknown is your expiration date.
Back to real estate
Many writers here suggest renting is better then owning. Playing with the numbers sometimes it appears so.
Now having said that I sleep easily knowing that I own a home worth a big number that if need be I can sell and now rent and have a pile of cash on hand . I do not believe that if I rented and invested the savings re mortgage,taxes, upkeep,etc etc— that the investments would be anywhere near what the house will deliver.

#15 chalkie on 12.03.22 at 11:43 am

Thank you for the Blog today, Ryan. You have written the blog as if you interviewed myself. In short, after working 52 years, retiring a little later than most retirees leave the workplace, you could not have pegged it any better even if you drew a picture. Great Job.

After my many experiences since leaving the workplace, my views today on Retirement are overrated. Tell your dad he is not alone if he has not reached his dreamed comfort zone.

My routine has been so challenging to try and break, my sleep pattern has not changed over the years from the 4:00 AM wake up to how I still think and react to things that bother me that need fixing.

My retirement is much different than my dad’s was when he retired, he appeared to be happy and relaxed all the time, he was a railroad worker and for the most part, my career was in Corporate management with lots of pressure, 24/7 responsibility.

I have been so far blessed with great health and my retirement nest egg is healthy, but still for some reason, I do not relax well, no matter how poor my night’s sleep was, I still cannot bring myself to take a nap during the day, it is like a feeling of wasted and precious time, but on the other hand, I had nothing to do.

Today’s blog was a godsend for me, showing that I am not alone, but rather among many friends who experience the same emotions.

#16 Andrewski on 12.03.22 at 11:45 am

Link to article:

https://www.rbcwealthmanagement.com/en-ca/insights/the-cost-of-caregiving

#17 Linda on 12.03.22 at 11:55 am

About retirement, one thing to take into consideration is one’s current fiscal reality. If someone about to retire is 1) debt free – no outstanding mortgage, HELOC, vehicle loan or lease expenses, outstanding credit card(s) balances; 2) owns one’s home outright & it is in good to excellent condition – see #1; 3) will receive a work related pension in addition to CPP/OAS & 4) is in relative good health then it is highly likely the amount required to enjoy life in retirement will be much lower than one thinks. Yes, it is entirely possible that in the first few years of retirement one may travel extensively, engage in a higher level of activity for whatever sports/hobbies one might already have or take up new ones. All of which will require time, money or both to do. However, working for a living actually costs more than one may realize. The cost of commuting, work related wardrobe/grooming/meals/$ towards various coworker events like marriage, new baby, promotion, retirement, charity fundraisers etc. is actually more than one might think. Those funds may well cover off much if not all of the cost of retiree activities other than extensive travel. Keep in mind that most people approaching retirement have already acquired all the ‘stuff’, so chances are one isn’t about to go on a major spending spree to replace it. If shopping is your lifestyle, then make sure your income in retirement is at least the same as it was when working.

#18 Sail Away on 12.03.22 at 11:57 am

#111 Observer on 12.03.22 at 9:59 am

From what I observe, Faron doesn’t incite so much as he REACTS to the narcissists (particularly SailAway) and neanderthals who themselves are the ones that endlessly incite.

—————

From what I observe, Faron trolls the comments looking for fights with people who have zero interest in engaging with him, so he insults, mischaracterizes and demeans to get a reaction, and then uses that reaction as fuel to fight, fight, fight… also, the slightest disagreement and he turns a previous positive interaction into a new enemy.

Having run across people like this in life before, I twigged his pathology early, but there are many others on here who engaged in a friendly way and all was fine, until there was an opinion difference… then insults and a new enemy. Toxic.

Remember 2 weeks ago I offhandedly mentioned traction devices would be helpful if hiking Benson in the snow? By no means could anyone expect this would trigger ‘Faron Blitzkrieg’, but suddenly (well after hundreds of comments) I, and SAR, are full of sh!t, for, like, still recommending traction devices. But the topic is irrelevant. If not this topic, it would 100% definitely be something else.

Sad. Funny in a way, but mostly sad. And nobody wants to see it.

#19 TurnerNation on 12.03.22 at 12:01 pm

Life in our UN Smart Cities. Priced out. Yet always broke.

.Peel warns it faces a $2-billion shortfall under Ford’s new housing bill – The loss of revenue would lead to infrastructure cuts and tax and utility rate hikes, says a report from the region’s chief administrative officer. (thestar.com)

——-BTW I’d always heard, for years, that all these globalist changes would be rolled out at the local city level.
Watch closely things are moving fast.
The same story in every city, travel access in/out of the core will be heavily restricted. Comrade what reason do you have to leave your Smart City?

.Forget tolls. Here’s how Toronto can turn the Gardiner and DVP highways into much-needed money-spinners (thestar.com)

.Toronto activists, councillors seek special meeting to discuss strong mayor powers (cp24.com)

.Tory uses strong mayor powers to appoint new Toronto city manager (cp24.com)

#20 Sail Away on 12.03.22 at 12:13 pm

Thanks Ryan, good post!

Another option to retirement is to create the situation of fulfillment, satisfaction and joy at a forever job, whether you choose to work lots or barely at all. Think old-world masters and contemporary Buffett, Munger, Musk, Garth, etc.

Maintain your position, gain fulfillment, have an experienced team at the ready, and share a lifetime of experience. Work is life, life is work. And take long breaks as desired. Also a good option.

#21 earthboundmisfit on 12.03.22 at 12:20 pm

Excellent piece Ryan …. thank you.

“Of course the main determinant of this is how much ballin’ you anticipate doing in retirement.” (Words have meaning.)

You might have included some discussion on alternative, more economical, sources of Viagra (or facsimile) beyond Shopper’s Drug Mart. I suggest “felixforyou.ca”

#22 kommykim on 12.03.22 at 12:22 pm

I think your bar chart would be a bit more relevant to Canadians if it didn’t START at $50K annual income. Most people won’t need the equivalent of their working salary because they won’t be putting money away for retirement, their mortgage is paid off, won’t drive as much, won’t need fancy work clothes, etc.

As for:
“How much will you give to family and charities?”

Sorry man. They get the leftovers and better be grateful for what they get when I’m dead. There’s no “plan” for that.

#23 Faron on 12.03.22 at 12:35 pm

#108 Zero on 12.03.22 at 8:59 am

boring

Boring enough for you to be well-versed.

Frankly, I tried all of your suggestions when I first came here and was met with so much bad-faith trash that, well… My attitude toward steerage has vastly changed. Let’s say this is my outlet for all of my jadedness at the growing prevalence of hucksterism, authoritarianism, narcissism and just outright a-hole FYIGM behaviour. There’s a ton of material to work with here in steerage.

#24 Dave on 12.03.22 at 12:35 pm

DELETED (You are a bigot. Go away. – Garth)

#25 Penny Henny on 12.03.22 at 12:36 pm

A couple of years before I retired I kept a log detailing my monthly expenses and divided it into 4 categories (groceries, entertainment, fixed costs and misc. IIRC). I did this for a full year.
This gave me a starting point in determining how much I needed to live on. I would highly recommend this for anyone nearing retirement.

#26 Penny Henny on 12.03.22 at 12:38 pm

I know I have posted this before but here it is again.
The BEST retirement calculator (Dr. V recommended)

https://financialmentor.com/calculator/best-retirement-calculator

#27 DLT INC on 12.03.22 at 12:41 pm

A most interesting topic. As someone about a dozen years into my (semi)retirement I cannot agree more that it is a good idea to have a plan of what one would like to do in his or her retirement years. We were fortunate enough to have parents who, though by no means wealthy, had streaks of frugality which fortunately ( or unfortunately, depending on how you looks at it) rubbed off on us.
As such, when retirement age rolled around, funds were available to do so without a lot of concern as to how we might afford it. Coupled with the government’s retirement pensions, continuing part time self employment and investment income we find very little need, if any, of actually dipping into our savings in order to finance our modest lifestyles.
Do we miss the luxurious housing or fancy trips? Not much. We’ve done a few cruises etc. but there are other things to make one’s life interesting.
We both read a lot, for instance. I find that there is an awful lot to learn in this world. I would highly recommend that learning new things is a really good way to pass the time, whether it is fixing things that break down from time to time or making things, you can’t go wrong.
Even though I’ve gone under the knife a few times in the last number of years, I’ve discovered how important it is to remain physically active. Just because one can’t move a quickly doesn’t mean you should stop exercising. It really pays off, I find and I think should be incorporated into one’s retirement plan.

#28 Penny Henny on 12.03.22 at 12:45 pm

#4 Sail Away on 12.03.22 at 12:13 pm
Thanks Ryan, good post!

Another option to retirement is to create the situation of fulfillment, satisfaction and joy at a forever job, whether you choose to work lots or barely at all. Think old-world masters and contemporary Buffett, Munger, Musk, Garth, etc.

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

I agree.
Retirement doesn’t have to mean doing nothing. As long as you have the funds it can be whatever you want it to be. While you physically able of course. (With or without crampons).

#29 Millennial Realist on 12.03.22 at 12:52 pm

A good piece Ryan, and useful for all ages, even us millennials. (Notwithstanding your poking fun at us, but hey, humour is always good.)

Enjoyed the photo of the scooter boomers as well :)

Speaking of that, plus demographics and changes, I recently saw an amazing thing near my hood –

Four dudes on Harleys, and not one of them looked like he was older than 70!!!

I swear, I have yet to see a motorbike rider anywhere without thinned out silver hair in the last two years, but these guys looked barely retired.

Maybe Gen Xers will be chasing the paleos at Port Dover next year………

#30 Penny Henny on 12.03.22 at 12:53 pm

#12 Andrewski on 12.03.22 at 11:34 am
Re health care costs, just read an article that says:
“Many people want to age at home, but it’s stunningly expensive for someone to stay at home and have 24-hour personal support worker care. In today’s dollars, it’s probably $250,000 to $300,000, just for 24-hour private care,” states Leanne Kaufman, president and chief executive officer for RBC Royal Trust.
///////////////

Shoot me if I get to that point.

#31 Observer on 12.03.22 at 1:01 pm

#115 Ustabe on 12.03.22 at 11:12 am
#111 Observer on 12.03.22 at 9:59 am

#108 Zero on 12.03.22 at 8:59 am
#69 Faron on 12.02.22 at 7:20 pm
#58 Russ on 12.02.22 at 5:41 pm

Yes, that is correct. I was adopting the language of the right when they complain about getting cancelled.

=================================
Your endless attempts to incite ….

^^^^^^^^^^^^^^^
From what I observe, Faron doesn’t incite so much as he REACTS to the narcissists (particularly SailAway) and neanderthals who themselves are the ones that endlessly incite.

My observation as well. For instance Faron wasn’t on this thread, wasn’t posting, until both Sail Away and Old Boot laid on the dog whistles and called out to him. Or was that yesterday? The day before? Who cares, it happens over and over. Sail Away needs the attention and loves it when folks who either do not know or do not care about how the Faron we know was created jump to his defense.

^^^^^^^^^^^^^^^
Exactly.

#32 Shawn on 12.03.22 at 1:08 pm

Retire on $50k?

#22 kommykim on 12.03.22 at 12:22 pm

I think your bar chart would be a bit more relevant to Canadians if it didn’t START at $50K annual income. Most people won’t need the equivalent of their working salary because they won’t be putting money away for retirement, their mortgage is paid off, won’t drive as much, won’t need fancy work clothes, etc.

*********************************
Well, I will say that a retired couple with zero savings but a paid for house can live fairly comfortably on CPP and Old age pension and GIS (if applicable). There seems to be a LOT of money for seniors. Alberta has a Seniors benefit for low income seniors. There is help with drug costs as I understand it.

BUT for investors and the target audience of this blog, $50k is WAY too low to shoot for. If you have been planning for retirement, $50k for a couple is quite a fail. Sorry. (And sure there are exceptions for rural people who like to do a lot themselves. You can be quite happy on $50k I guess, but it’s not the target audience here).

Why not shoot for a life style that you would like to become accustomed to? You don’t want to starve and deprive yourself too much now to live high in retirement. Find a balance but aim a whole lot higher than $50k

#33 Melinda on 12.03.22 at 1:10 pm

Thank you, “chalkie”, for your contributions to the blog comments. (I only search for you these days and sometimes Jane24 although hers are rare.) It’s good to hear the perspective of someone a bit older on the subject of Canadian real estate.

Also, thanks Garth and the guest bloggers for all the great content.

#34 Victor Llearna on 12.03.22 at 1:30 pm

There was this girl names patty that was always late for work. her nickname was ‘Patty Late’ and everyone if office call her that.
I wonder if Patty Late is always late for everything after retiring.

#35 Wrk.dover on 12.03.22 at 1:39 pm

#11 Flop… on 12.03.22 at 11:31 am
___________________________________

An enormous sincere thank you for financial advice on this financial blog!

I plan to research these ETFs, and perhaps invest the whole package, as a percentage rather than whole hog.

In other words, this portfolio could be yet another ETF within our existing cobbled up dawgs breakfast.
_____________________________________

And, hey Sail Away, I’m now ditching ATI at break even, which I had called intriguing months ago.

#36 Reality is stark on 12.03.22 at 1:41 pm

There is a lot of disinformation regarding the war in Ukraine.
Here is the bottom line: The US will fund this thing until the US buck weakens. The US buck ain’t about to weaken anytime soon.
Ukrainian pilots are being trained on F-16 and F-18’s.
Ukraine will control the skies by the end of next year.
Unfortunately for Zalensky the war ends when Russia gets too weak and rogue states begin making claims on Russian territory.
It’s a U.S. proxy war. It’s likely best the two sides come to some sort of agreement on the disputed territories before the U.S. decides who gets what.
It’s not Zalensky’s money and he has to abide by the golden rule, “He who has the gold makes the rules”.

#37 Russ on 12.03.22 at 1:54 pm

I suggest anyone at or near retirement go back and re-read
#15 chalkie & #17 Linda

Retirement and getting old can be tough, but then… if it was easy everyone would do it. :)

I stayed working during C-19 years because there was no travel option the wife was interested in. Finally we got C-19 last summer and the “fear of flying” she had was substantially diminshed.

In terms of inflation, I feel many people do not understand that inflation target of 2% will not lower prices. The costs we see now are here to stay, but if we make target then prices rise more slowly than the past two years.

Modern travel experience costs for this couple (as frugal to moderate style) is:
– car, hotel/motel, meals @ 200 – 300 /day
– air/hotel/car rental @ 300 – 500 /day
– cruise (balcony) @ 500 – 1000 /day *
– yacht (owned) @ 100 /day *

* looking at an Antartic cruise tour that is over the top at 35 grand for 30 days, air, etc, all in. The missus wants to do it and I mentioned this to dear ol’ Mom. She quickly remarked, “Just do it! It’s only money.” Such wisdom.

* motor-sailor so most of that is day – day fuel, ice cream & eats ashore. Do not under-estimate ice cream costs. 2 scoop cone at Thetis Island marina is 10 bucks.

Fortunately for me I am able to participate in some projects at the ol’ work site. This helps counter some of these post C-19 infltion costs and keeps me happy too.

Cheers, R

#38 Wrk.dover on 12.03.22 at 1:56 pm

#30 Penny Henny on 12.03.22 at 12:53 pm
#12 Andrewski on 12.03.22 at 11:34 am
it’s probably $250,000 to $300,000, just for 24-hour private care,”
Shoot me if I get to that point.
____________________________

I’ve seen that situation up close. It isn’t pretty, and the private facilities at that price level are light years nicer.

My mother spent a decade in a Chartwell joint, without the care, and it was akin to a cruise ship for a few grand per month.

So, I bought a couple weeks’ rent worth of Chartwell stock but have watched it slowly die.

#39 The Dude on 12.03.22 at 2:01 pm

I am a bit confused. If you have a withdrawal rate of 4% but your average rate of return is 6% as always talked about here, your money will just keep on growing.
I am missing something here.

#40 mike from mtl on 12.03.22 at 2:03 pm

What? That’s so complicated and goes against most Canadians’ existing retirement plan:

1. Purchase property.
2. ???
3. Vacation every day.

#41 Dolce Vita on 12.03.22 at 2:12 pm

Who am I? Why am I here?

Answer those 2 and the 3rd is easy … What should I be doing?

Answered all 3.

Time of my life here in Italia retired, hard not to do in the land of La Dolce Vita and Il Bel Far Niente. People pay big bucks to come here at least once in their lifetimes, I walk in her bosom. A big smile every morning.

You need your health. Without that you have nothing. *

Money does not buy happiness.

Still, you need money to live, should rake in +$100K after tax in retirement income = Top 1-2% before tax bracket for the Paleos. Did OK, without really trying.

I can say I am very happy including La Famiglia.

—————–

What else is there to say other than … I’m going for a passeggiata tomorrow in Venezia.

How many of you Paleos, you to Garth, can do that?

Easy for me, 1h10m train ride and then I see Ponte degli Scalzi & Canal Grande … memories flood in.

——-

* I smoke. All my friends in Canada (none smoke) have all kinds of ailments, body parts replaced, some have parts missing, a few (sadly, 2 of my best friends) have already gone to meet their maker, etc. Me nothing other than hayfever.

Luck of the draw. DNA. Almighty Providence.

Who knows in the end?

#42 jess on 12.03.22 at 2:20 pm

https://www.theguardian.com/money/2022/dec/03/why-inheritance-is-the-dirty-secret-of-the-middle-classes-harder-to-talk-about-than-sex
==========
delinquencies the buy now pay later contribution to inflation?

lagging
Feb 18 (Reuters) – Canadian Imperial Bank of Commerce (CM.TO) has received approval from an Ontario court of a C$125 million ($98 million) settlement to resolve claims in a class-action lawsuit alleging misrepresentations made by the bank and its former executives in 2007 and 2008, the plaintiffs’ lawyers said on Friday.Misrepresentations were found in CIBC’s quarterly financial filings and public oral statements about the Canadian bank’s investments in the United States and its exposure to U.S. residential mortgage-backed securities between May 31, 2007 and February 28, 2008, according to a statement from lawfirm Rochon Genova.

#43 crowdedelevatorfartz on 12.03.22 at 2:23 pm

Vancouver Home sales tanking big time.

https://vancouver.citynews.ca/2022/12/02/vancouver-home-sales-drop/

I can’t wait to see the reaction in the local ( real estate friendly ) media when interest rates climb another 0.5%

#44 George on 12.03.22 at 2:23 pm

Good read

Im calling a better 2023 market predictions from you bro, has to be .2022 market calls were so off that a toddler beat ya !

#45 Dolce Vita on 12.03.22 at 2:25 pm

Oh ya, I forgot.

In my youth I loved quoting my fave Welshman, Dylan Thomas …

“And you, my father, there on the sad height,
Curse, bless, me now with your fierce tears, I pray.

Do not go gentle into that good night.
Rage, rage against the dying of the light.”

He had Daddy issues I learned later on in my old age thanks to the magic of the Internet.

———

The odd “Rage, rage” * can be a good thing; though, the “gentle” is by far more appealing to me.

* provided it is not fueled by an amygdala hijack.

#46 Bubbles on 12.03.22 at 2:35 pm

#15 chalkie on 12.03.22 at 11:43 am

After my many experiences since leaving the workplace, my views today on Retirement are overrated. Tell your dad he is not alone if he has not reached his dreamed comfort zone.
———–
It looks good from far but far from good.
Boring.
I could have retired years ago and not from any PP.
I Built a RE portfolio…pretty much bullet proof.
Got lots of peeps to deal with….it would be boring without that interaction.
Bonus is pass 8 figures.. Its just getting fun.
Best

#47 Ryan Lewenza on 12.03.22 at 2:42 pm

Blair “ Ryan, when you talk about desired annual income, is that before or after tax?”

That’s before tax. That calculation is just a basic starting place. Then we go into the taxes and everything else in the detailed plan. – Ryan L

#48 Yukon Elvis on 12.03.22 at 2:43 pm

#17 Linda on 12.03.22 at 11:55 am
++++++++++++

Great post, you really nailed it.

#49 Alberta Ed on 12.03.22 at 2:43 pm

If you’re entitled to any government benefits — CPP, OAS, etc. — take the money and run. You’re ahead even if you take less and invest it (or spend it as needed on life’s essentials, like good Scotch or a Harley).

#50 Damifino on 12.03.22 at 2:48 pm

When I retired in 2007 at the age of fifty-six I spent a total of one weekend wondering if I’d made a mistake. That concern vanished like a puff of steam on Monday morning. Since then, not one day has passed that I don’t rejoice over my soul-cleansing escape from the arbitrary, half-baked objectives of the cloned managerial swamp.

I began reading books, hundreds of them, on all subjects, fiction and non-fiction. (As a MSU, I should mention that a few of them were Garth’s). I took three years to write a novel. I voluntarily embraced the challenge of weaving together seventy thousand cohesive words into an entertaining story arc. To all you would-be retired novelists: Make it a labor of love since no modern publisher will allow your prose through the door unless it’s utterly devoid of political incorrectness and shamelessly fawns over every woke issue of the day. But be aware… the goalposts are constantly moving. My own novel is chalk full of taboo. I think it’s a damned good read, though. Then again, what would you expect me to say?

I have no bucket list and I detest traveling. I’m most comfortable in my own city (Vancouver, where I was born) in my own home (an excellent 2-bed in a downtown purpose-built rental). I’m a musician and producer. That is its own reward. The “music business” is perhaps the slimiest in the world (except standup comedy). I’ve found that if you make it all about the “music” and nothing about the “business” you can’t go wrong.

I’m a person who loves routine. They only caveat is that I must set my own. I detest having another party scheduling my time. For me, agendas driven by a third party are a nightmare. Although I had a successful and productive career, the greatest thing about leaving it behind was gaining the blessed freedom to set my own objectives each and every day. Even on days when there is no objective. I’m aware some see that as a special kind of hell. I thrive upon it.

Oh yeah, being financially independent helps quite a lot. Pay attention to Ryan.

#51 Ed on 12.03.22 at 2:49 pm

#5…move to a cheaper place to live.

Today I bought
quart of milk
2 poblano pepper2
2 golden bell peppers
6 serano
1 habenero
4 jalepeno
2 anahiem peppers
1 jicam
bunch cilatro
mediun bag of tomattilos
2 large white onions

Total cost 93 pesos…$4.67 USD lol

#52 @J on 12.03.22 at 2:52 pm

So there is this new language processing AI that just came out in beta. I do some research on learning algorithms and have been playing with this AI for the past 24 hours and think it’s a game-changer. It’s literally going to change the way we create things. You can try it out at beta.openai.com

Here is just one example:

Human: Explain the four phases of retirement researched by Dr. Riley Moynes. Use just fives sentences in your answer.
AI:
The four phases of retirement researched by Dr. Riley Moynes are the Pre-retirement phase, Honeymoon phase, Adaptation phase, and Consolidation/lived phase. The Pre-retirement phase is an anticipatory stage where retirees prepare to make the transition from their work life to retirement. The Honeymoon phase signifies a period of positive adjustment and exploration of new activities after retirement. The Adaptation phase occurs when retirees negotiate a new routine and identity and the Consolidation/lived phase is the final stage of successful adjustment to the retirement lifestyle.

#53 Yukon Elvis on 12.03.22 at 2:55 pm

#40 Dolce Vita on 12.03.22 at 2:12 pm

Money does not buy happiness.
+++++++++++++++

Maybe not but once I told myself to shut up I found that I could rent a whole lot of it.

#54 Ryan Lewenza on 12.03.22 at 2:58 pm

Millennial Realist “A good piece Ryan, and useful for all ages, even us millennials. (Notwithstanding your poking fun at us, but hey, humour is always good.)”

I was a little hard on you millennials today but it’s because I struggle with coming up with jokes and adding some humour in my posts like Garth, so when I come up with a zinger I have to include them. – Ryan L

#55 Dolce Vita on 12.03.22 at 2:59 pm

Tomorrow a big day for 2023 inflation?

OPEC+ led by Saudi and Russia to decide on the next phase of production policy.

Production cuts coming seems to be the consensus. then by how much, nobody knows? But, a lot of talk, fear.

Economist Self-Interest Me says go for big cuts, more fat juicy “yeah oil” dividends in 2023. Paying for a CRAZY IVAN maneuver. 🤞

Find out Monday if it was a tempest in a teapot, unnecessary worry.

https://www.cnbc.com/2022/12/02/opec-meeting-oil-output-cuts-on-the-table-ahead-of-russia-sanctions.html

————–

Very good Blog Ryan.

Got me to go all reflective. Something I rarely do nowadays, live for/in the moment is more like it.

Don’t know whether to thank you or heap great gobs of he darn upon you.

– Thank you Ryan.

#56 @J on 12.03.22 at 3:00 pm

Further to my post on the AI, here is its response when I ask for a different style.

Explain the four phases of retirement researched by Dr. Riley Moynes. Use at most three sentences sentences in your answer. Use a space metaphor. Give the answer in the style of a rhyming poem.
AI:
In the first phase you plan,
Your money to stretch as far as you can.
The second, you savor each day,
Meaningful moments as you play.
Third, be mindful of how you spend,
Create a budget so you can extend.
Lastly, when your twilight has come,
Think of legacy and have some fun.

#57 Yukon Elvis on 12.03.22 at 3:03 pm

#18 Sail Away on 12.03.22 at 11:57 am
#111 Observer on 12.03.22 at 9:59 am

From what I observe, Faron doesn’t incite so much as he REACTS to the narcissists (particularly SailAway) and neanderthals who themselves are the ones that endlessly incite.

—————

From what I observe, Faron trolls the comments looking for fights with people who have zero interest in engaging with him, so he insults, mischaracterizes and demeans to get a reaction, and then uses that reaction as fuel to fight, fight, fight… also, the slightest disagreement and he turns a previous positive interaction into a new enemy.

Having run across people like this in life before, I twigged his pathology early, but there are many others on here who engaged in a friendly way and all was fine, until there was an opinion difference… then insults and a new enemy. Toxic.

Remember 2 weeks ago I offhandedly mentioned traction devices would be helpful if hiking Benson in the snow? By no means could anyone expect this would trigger ‘Faron Blitzkrieg’, but suddenly (well after hundreds of comments) I, and SAR, are full of sh!t, for, like, still recommending traction devices. But the topic is irrelevant. If not this topic, it would 100% definitely be something else.

Sad. Funny in a way, but mostly sad. And nobody wants to see it.
++++++++++++++
They tried medications and shock therapy but nothing has worked. Now they looking for an exorcist brave enough to give it a shot. Stay tuned.

#58 dave on 12.03.22 at 3:09 pm

What if Russia doesnt accept the Oil Price Cap…will oil jump to $150. Causing massive inflation?

#59 Tremblant110 on 12.03.22 at 3:16 pm

Being retired now for 13 years starting at age 65 I have the following thoughts;
1.Dying broke is a good idea. The 4 % rule will still leave you with a lot of money at death. Decide early if you want to will your money to the kids or charities or give it to them now and enjoy the money when you’re still alive and then die broke! We took the kids and grand kids on many trips. Its all about memories.
2. Spend more when you’re healthy and can travel in the early years of retirement.
3. At age 80 creating a 10 year plan is very optimistic. Spend your money !
4. Health care costs is the black swan. It’s the cost of nurses or PSWs that will be very expensive often not covered by health plans or available within the public system. A person in a nursing home with dementia and needing additional care e.g PSW can cost well over $100,000 per year. Cancer care can be very expensive.
5. Public health care access to many elective surgeries is intolerably long. A real tragedy if a 75 year old disabled person needs to wait 2-3 years for a new hip or cataracts. You can lose your driver’s licence waiting for eye surgery. You then need the financial resources to pay privately (even in Canada) or you just wait! You can ask the kids to chip in for the procedure !
6. Sudden illness or the death of a spouse is traumatic and not planned. You can spend much of your retirement years looking after a disabled spouse which will end any of those travel plans. Again do it when you can.
7. Renting is good but keep your house as long as you can. When no RRIF money left the house is the final asset.
8. Love your kids as you may need them a lot more than you planned as you age !

#60 Stoph on 12.03.22 at 3:18 pm

#38 The Dude on 12.03.22 at 2:01 pm
I am a bit confused. If you have a withdrawal rate of 4% but your average rate of return is 6% as always talked about here, your money will just keep on growing.
I am missing something here.

—————————————–

Inflation

#61 Linda on 12.03.22 at 3:18 pm

#36 ‘Russ’ – $35K for an all inclusive Antarctica cruise (including airfare) is actually a very good deal for two people. One thing I didn’t mention in my earlier post is that in general retirees are at their most active (& therefore most likely to spend $ on travel) in their first decade of retirement. Obviously younger retirees may extend that time frame. As one ages, the physical toll of travel tends to see one taking shorter trips. Also most travel related health insurance stops quoting rates around the age 75 mark. You can still buy it, but if you have to ask expect the price tag to knock your socks off.

#62 TalkingPie on 12.03.22 at 3:27 pm

#38 The Dude on 12.03.22 at 2:01 pm
I am a bit confused. If you have a withdrawal rate of 4% but your average rate of return is 6% as always talked about here, your money will just keep on growing.
I am missing something here.
********************************************

That’s an easy one. You want to know what happens with the extra 2%. I’ll answer that question with another one: What’s the long term average inflation rate?

#63 IHCTD9 on 12.03.22 at 3:28 pm

#17 Linda on 12.03.22 at 11:55 am

——

Excellent post. I believe this to be our case in the future. We’re just not ballers, simple pleasures. No debts or anything. Even now our COL is under 30K – not including investing, tuition support, or philanthropy. When we retire, I can’t see how it won’t drop from there, at least until health issues or the unforeseen shows up.

I like reading these posts from experienced retirees!

#64 4% rule is flawed on 12.03.22 at 3:39 pm

Ryan, how do you not know that the 4% rule is flawed? If I’m 60 years old, have a million bucks.. and take out 40K per year.. what happens if my portfolio balloons to 1.5 million dollars when I’m 65? I’m still taking 4% of that million bucks out? What if my neighbour retired at 65 and also has 1.5 million? He gets to spend 60K per year..
This is why you use bogleheads VPW method and not the 4% rule. This method maximizes spending while ensuring you don’t run out of money.

#65 Tony on 12.03.22 at 3:40 pm

Mmm, good article. I’m 60 now, retired. I think it’s time see a financial advisor.

#66 Loonie Doctor on 12.03.22 at 3:41 pm

#38 The Dude

The reason for the lower safe withdrawal rate is sequence risk. Basically, if you get unlucky and have a market crash around the time of retirement it lowers portfolio survivability. The 4% rule is based on US historical data and is also pre-fees and pre-taxes. The 4% is the starting year withdrawal and increases with inflation to maintain buying power.

https://www.looniedoctor.ca/2020/01/31/sequence-of-returns-risk/

-LD

#67 IHCTD9 on 12.03.22 at 3:49 pm

#32 Shawn on 12.03.22 at 1:08 pm

Well, I will say that a retired couple with zero savings but a paid for house can live fairly comfortably on CPP and Old age pension and GIS (if applicable). There seems to be a LOT of money for seniors. Alberta has a Seniors benefit for low income seniors. There is help with drug costs as I understand it.
———-

I think it’s pretty common among current retirees. My Parents do it alongside Dad’s seasonal lawn cutting gig. My in-laws do it with a little help from a small IBEW pension.

Both couples love gardening and fill the freezers. FIL still heating with wood off his property. Simple palate, simple pleasures, simple living. Church and Children backup close at hand too, that helps a lot sometimes. They’ve even managed a couple trips to Europe.

#68 Science Based Retirement on 12.03.22 at 3:55 pm

It is easier to criticize than praise, so I will start out by saying that there are both things to praise and criticize in this post. Having said that, and due to time constraints, I shall take the easy road!

1) It was disingenuous to divide income needed by 4% to arrive at the portfolio size required to retire, ignoring CPP, OAS, and for the fortunate, DB pension income. These must all be applied to reduce required income BEFORE dividing by 4%. CPP & OAS are not mentioned until the next paragraph, but they really should have been accounted for before this. As a consequence of not deducting them from the amount needed first, the amounts shown are inflated and will likely scare a number of readers. Inflating the required assets that a retiree may need is a tactic of self-interested financial advisors, so you might want to be more careful about what is said in these posts and/or how it is said.

2) Fidelity mentions health care costs for AMERICAN CITIZENS being financially onerous in general. For Canadians, they list this as the #5 risk rather than #2 ( https://www.fidelity.ca/en/investor/investorinsights/five-risks-to-your-retirement-income/ ). The “health care” risk they talk about for Canadians is for voluntary expenses, such as those needed to renovate a house to allow one to live in it longer as they age, not for diagnostic tests, surgeries, etc. which may have to be paid out of pocket by Americans or for which Americans pay thousands of dollars a year for insurance. While there are exceptions, most health care costs that Canadians face as they age are covered by socialized medical care, both federal and provincial. (I am not saying our system is working, just that medical costs are not as big a financial risk for Canadians).

3) On Fidelity’s Canadian site, longevity is listed as the #2 retirement income risk, not #4. Unfortunately, they show an astonishing lack of understanding of statistics and therefore misinform the public by stating that the average life expectancy of Canadian men is 80, and 84 for women. These are the averages FROM BIRTH. These are inappropriate statistics to use for the longevity of retirees.

Of interest, the U.S. fidelity site gets the longevity statistic right, stating that a male age 65 has a 50% chance of making it to age 87 and a female age 65 has a 50% chance of making it to age 90. (By a quirk of statistics which I won’t get into here, for a couple both aged 65, there is a 50% chance that one of them will make it to age 94).

https://institutional.fidelity.com/app/item/RD_13569_41055.html

Many things kill people from birth to age 65, reducing the overall life expectancy of the population from birth. But for those who have reached 65, they have already survived these things and will not be affected by them going forward.

Another fact is that Canadian life expectancy is higher than that of the U.S. population, so you can add a couple years to the figures for 65 year old Americans if you live in Canada.

And yet, this blog has stated unequivocally that a “good” reason to take CPP at age 60 rather than waiting for a higher payout later is because you may die early (presumably too early to break even, but if you are dead, do you really care?). In fact, as Fidelity.COM has shown (along with many many others), most Canadians vastly underestimate their longevity. Those who take their CPP at 60 but are otherwise of average health and aren’t prone to engage in high-risk activities are overwhelmingly going to live long enough to collect more CPP by waiting. In fact, doing so will 1) lesson the effect of inflation on their finances; 2) lesson the effect of health care expenses as they age; 3) compensate for or eliminate withdrawal risk; 4) compensate for or eliminate longevity risk, and; 5) compensate for or eliminate asset allocation risk. These are obviously good reasons for delaying CPP. Taking it early increases the risk that one or more of the five financial risks will be what you experience.

When Turner Investments runs a financial plan for a client, do you run scenarios to optimize the age at which CPP and OAS are taken to maximize their financial well-being? Clients are of course free to ignore the results, but at least they would be making an informed decision.

#69 ElGatoNeroYVR on 12.03.22 at 3:56 pm

Excellent post Ryan. It ultimatley circles back to the “One Million Dollars Journey”. If one hits the magic mark late 50’s early 60’s (per person so 2 mil per couple) you can retire quite well considering CPP & OAS.
In order to do that if one starts with $0 at 35 and contributes $700 monthly(indexed at 2% inflation) at 7% average return they will hit the mark at 65.
Throw in some sort of DC pension with maching contributions and you hit that mark late 50’s.
Contribute more and you get FIRE.
Ofcourse in order to achieve that you need to “understand” your expenses ,not cut everyting ,but have a reasonable budget.As another poster earlier said ,if you understand your expenses you can target your post-retirement income goal or simply jump to a more fulfilling job that pays less as they always do.

#70 Fortunate one on 12.03.22 at 3:57 pm

Ryan thank you so much for today’s topic and discussion. I was one of those people who retired and was in phase 2 and felt totally and utterly lost. Fortunately I am a RN and I went back to work part time. Currently I am enjoying phase 3 but while in phase 2 I was becoming somewhat depressed trying to figure out… Is this it? I think you have helped a lot more people than you could ever imagine but today’s topic and info. Again, a huge thank you to you, Garth and the team for sharing your knowledge and putting up with the garbage that you do from the steerage section.

#71 Diversified in Mississauga on 12.03.22 at 3:58 pm

Ryan,
Excellent weekend reading!
Good to know my retirement (nearly 3 years into it) is progressing well.
Several years before I retired, I tracked our total yearly spending on a weekly basis. This gave me a reality check of how much we actually spent.
Next, I planned on a 4-5% withdrawal rate, depending on unforseen expenses.
Now we knew what we needed in a slightly higher equity portfolio than a 60/40.
When we hit the numbers, “BAM!”, I pulled the trigger and retired from a rewarding and successful career in the hospitality business.
Never looked back, never a single regret. Neither a caviar or cat food retirement, rather somewhere in the middle!
On the way to Mesa, Az. tomorrow in our 5th wheel for the winter.
No small thanks to you, Garth, and this blog for giving me great advice along the way. ZERO help from anyone in the steerage section.
Thanks again, you all are fantastic!

#72 Wrk.dover on 12.03.22 at 3:59 pm

#41 jess on 12.03.22 at 2:20 pm
Feb 18 (Reuters) – Canadian Imperial Bank of Commerce (CM.TO) has received approval from an Ontario court of a C$125 million ($98 million) settlement to resolve claims in a class-action lawsuit alleging misrepresentations made by the bank and its former executives in 2007 and 2008
_________________________________

Too bad the 2007/8 shareholders are off the hook, rather than the present day (new) shareholders taking the hit.

Non ethical settlement involving ethics breach.

#73 Gravy Train on 12.03.22 at 4:02 pm

#15 chalkie on 12.03.22 at 11:43 am

[…] My routine has been so challenging to try and break, my sleep pattern has not changed over the years from the 4:00 AM wake up to how I still think and react to things that bother me that need fixing.[…]

Talk to your doctor about seeing a sleep specialist. Your sleep is so important for your health, happiness and longevity. You may have insomnia or advanced sleep phase disorder. Have you tried falling asleep at 7 p.m. to give yourself a 9-hour sleep window? If you find yourself ruminating about the past or worrying about the future, consider practicing mindfulness, mindful meditation and cognitive behavioural (biblio)therapy to stay grounded in the present. There are lots of good books out there.

I have been so far blessed with great health and my retirement nest egg is healthy, but still for some reason, I do not relax well, no matter how poor my night’s sleep was, I still cannot bring myself to take a nap during the day, it is like a feeling of wasted and precious time, but on the other hand, I had nothing to do.

Regular exercise, mindfulness, yoga and Qigong will help you relax.

Naps aren’t a good idea. You build up adenosine in your brain while you’re awake, and this buildup increases sleep pressure making it easier for you to fall asleep at night. Naps reduce that sleep pressure.

Try to reduce your intake of caffeine as well, and get lots of sunlight during the day. Hope I haven’t been practicing medicine without a licence.

Today’s blog was a godsend for me, showing that I am not alone, but rather among many friends who experience the same emotions.

You’re not alone. We try to help each other out on this blog site—when we’re not fighting one another. :P

#74 Kyle on 12.03.22 at 4:12 pm

Thanks for sharing this video. Even as a 39M it was super inciteful. It helps me have a better idea where I am headed as at this point I have only focused on the financial. Very very helpful!

#75 jess on 12.03.22 at 4:20 pm

What happens in market if reverse repo rate is increased?
During high levels of inflation in the economy, the RBI increases the reverse repo. It encourages the banks to park more funds with the RBI to earn higher returns on excess funds. Banks are left with lesser funds to extend loans and borrowings to consumers.
https://www.wsj.com/articles/fed-reverse-repos-surge-to-new-record-of-756-billion-after-rate-tweak-11623955198
https://www.bloomberg.com/news/articles/2022-09-28/fed-reverse-repo-use-hits-fresh-record-as-investors-hide-in-cash?leadSource=uverify%20wall

The Fed’s facility offers what are called reverse repos, which allow eligible firms to park cash at the central bank in exchange for a risk-free return.

The rule playing a role in the inflows is a regulation called the Supplementary Leverage Ratio, which determines how much liquidity banks need to have on hand.

reverse repo rate is used to control cash flow in the market. The SLR standard was eased during the most acute phase of the coronavirus pandemic in 2020, when fears about market functioning abounded, and it was restored at the end of March 2021, returning to a tighter standard.After the SLR relief period ended, banks had less flexibility to expand their balance sheets by increasing their holdings of reserves and Treasuries,” wrote bank economists Gara Afonso, Marco Cipriani, and Gabriele La Spada. That had a knock-on effect on money market funds, the main user of reverse repos, which surged cash into the reverse repo facility.https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr1041.pdf
Banks’ Balance-Sheet Costs, Monetary Policy, and the ON RRP
Gara Afonso, Marco Cipriani, and Gabriele La Spada
Federal Reserve Bank of New York Staff Reports, no. 1041
December 2022
JEL classification: G10, G21, E41, E51, E58
==================
What happens in market if reverse repo rate is increased?
During high levels of inflation in the economy, the RBI increases the reverse repo. It encourages the banks to park more funds with the RBI to earn higher returns on excess funds. Banks are left with lesser funds to extend loans and borrowings to consumers.
https://www.wsj.com/articles/fed-reverse-repos-surge-to-new-record-of-756-billion-after-rate-tweak-11623955198
https://www.bloomberg.com/news/articles/2022-09-28/fed-reverse-repo-use-hits-fresh-record-as-investors-hide-in-cash?leadSource=uverify%20wall

#76 Gr on 12.03.22 at 4:21 pm

Hi Ryan, re: “For our younger, millennial readers you can probably skip today’s blog…”

I hope that’s an attempt at ‘click baiting’ some of them to read your whole post.
But if they are regular reader they probably will read it all anyway, and all other post you-all do here too.
Hopefully some will tell there friends to.

I remember my Dad pointing out some actuals in the Toronto Star news paper on RRSP whenI was in high school. So I would remembering to start saving/investing as early as you can to take the most advantage of the magic of compounding growth over time.

If I had only invested all or most of that paper rout money I earned in high school. and the money I blow in lottery tickets (just one at a time) over the years…
Glade I never was a smoker and the cost of them packs!
But if I had just invested much of it…

I was very glade the company I work for had way to invest % of pay check directly into RRSP and now TFSA is an option. I was able to add the highest % allowed thankfully. And they would even then add a few % to your RRSP like free money if you did save some for retirement. They also paid the management fees of the mutual funds, would now be ETF’s, which I’m sure helped lots.
Other wise I might have spent my paycheck. That way we employs could have savings growing for retirement and you never missed the money because you never saw it in the regular bank account.

The boss even gave everyone a copy of ‘the weather barber’ book one year to try and help inform us all more.

We all get old eventually, no way to avoid that, and it’s quicker than you might think when your young.
People that safe enough and can afford to retire sooner seem to live longer for some reason on average too.

#77 Retired in Kelowna on 12.03.22 at 4:21 pm

Great column Ryan. Thank you. I’ve always followed this philosophy for our Retirement Income and we draw about 3% of our Assets for Income. Recently I have started thinking about should our Asset Total that we draw off include our Paid Off House? Currently it does not. Thoughts? Garth?

#78 Ronaldo on 12.03.22 at 4:41 pm

#106 Dr V on 12.03.22 at 2:35 am
95 Ronaldo

Or was this just tongue in cheek?
———————————————————–
I live on that street and not quite sure how they figure their place is worth $4 million more than what it was assessed at just a bit over 2 years ago. Must be the Covid effect. Looking for that Greater Fool I reckon.

#79 Sail Away on 12.03.22 at 5:03 pm

#35 Wrk.dover on 12.03.22 at 1:39 pm

And, hey Sail Away, I’m now ditching ATI at break even, which I had called intriguing months ago.

—————

Thanks for the note. I’ll keep watching since I keep new possibles on the watchlist for at least a year before moving. I’m impressed with your call on Enphase.

#80 Flop… on 12.03.22 at 5:03 pm

Yeah, retirement for myself at the moment is just a dream.

It still has potential, but I’ve seen the other side.

My Mum and Dad moved to the tropics in Queensland, and almost immediately Dad was diagnosed with the cancer he succumbed to earlier this year.

Not much of a retirement.

My Dad after he passed sent me a tie that had sentimental value, and $1000 to invest in my TFSA.

I didn’t bother putting it in the bank in the meantime, as the currency rate is poor at the moment, I got a phone call this week from my In-Laws and today the lightbulb went on.

One of their cousins is not doing so well with their cancer battle in Australia, and so they made the quick decision to go and see him before he passes.

I just got back from gifting them the $1000 AUD that was meant to go into my TSFA for their trip to Queensland, so the money will go back to the same region from where it came from.

My Dad, he’d understand, he always knew I was a poor listener…

M48BC

#81 LowerTheBoom...er...not on 12.03.22 at 5:12 pm

Thank you for today’s post and comments on # 20, # 27 and # 28: meaningful and helpful to our present considerations.

#82 Ordinary Blog Dog on 12.03.22 at 5:15 pm

Nice blog. Thanks.

#83 Bezengy on 12.03.22 at 5:26 pm

A Vespa is an essential part of a solid retirement plan.(see picture above)

#84 crowdedelevatorfartz on 12.03.22 at 5:36 pm

@#68 Science Based Retirement.

Interesting comments.

There is a Retirement Calculator from Stats Can that calculates your private investment funds, private pension plan(if you have one), CPP and OAS.

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjAsO-Fwd77AhXIHzQIHXxmCKIQFnoECBMQAQ&url=https%3A%2F%2Fwww.canada.ca%2Fen%2Fservices%2Fbenefits%2Fpublicpensions%2Fcpp%2Fretirement-income-calculator.html&usg=AOvVaw3cdoQhA8s4uHEsNJoyKehr

Takes about 5 minutes.
Just punch in the numbers and be ;
a) horrified
or
b) happily surprised

#85 Wallflower on 12.03.22 at 5:45 pm

#50 Damifino on 12.03.22 at 2:48 pm
A toast to Damifino who should write another book:
Doing it right, all right?

Me, 58, love travelling, but not the tourist kind.
Strictly a la carte with little itinerary and sometimes zero language skills (like when I dropped into Bulgaria in 2018 not realizing it was cyrillic til I got there – wow, ooops; but sooooooooooooo much fun in the challenge and that is what I like about travelling a la carte; things just pop up!).

I must say I find it VERY interesting that a music person finds treasure in routine. Is that a beat thing?

#86 Ryan Lewenza on 12.03.22 at 6:06 pm

Retired in Kelowna “Great column Ryan. Thank you. I’ve always followed this philosophy for our Retirement Income and we draw about 3% of our Assets for Income. Recently I have started thinking about should our Asset Total that we draw off include our Paid Off House? Currently it does not. Thoughts? Garth?”

We don’t include that since it doesn’t provide any income or capital gains until you sell it. – Ryan L

#87 Ustabe on 12.03.22 at 6:08 pm

84 Bezengy on 12.03.22 at 5:26 pm

A Vespa is an essential part of a solid retirement plan.(see picture above)

Dress for the slide, not for the ride. Grandma is going to have a hard time holding grand kids if Grandpa drops that scooter and she goes down hands first.

#88 Ryan Lewenza on 12.03.22 at 6:09 pm

Fortunate One “Ryan thank you so much for today’s topic and discussion. I was one of those people who retired and was in phase 2 and felt totally and utterly lost. Fortunately I am a RN and I went back to work part time. Currently I am enjoying phase 3 but while in phase 2 I was becoming somewhat depressed trying to figure out… Is this it? I think you have helped a lot more people than you could ever imagine but today’s topic and info. Again, a huge thank you to you, Garth and the team for sharing your knowledge and putting up with the garbage that you do from the steerage section.”

I’m humbled. Thank you.

#89 Faron on 12.03.22 at 6:12 pm

#18 Sail Away on 12.03.22 at 11:57 am

Wow, sneaking in some lies and dead horse flogging. Well done.

#90 BC Doc on 12.03.22 at 6:33 pm

#30 Penny Henny on 12.03.22 at 12:53 pm
#12 Andrewski on 12.03.22 at 11:34 am
Re health care costs, just read an article that says:
“Many people want to age at home, but it’s stunningly expensive for someone to stay at home and have 24-hour personal support worker care. In today’s dollars, it’s probably $250,000 to $300,000, just for 24-hour private care,” states Leanne Kaufman, president and chief executive officer for RBC Royal Trust.
///////////////

Shoot me if I get to that point.
———————————————————-

My in-laws live in the US. They currently require two live in care-givers, 24 hours/day. Cost is $25-30k per month. They are soon to run out of cash and will move into nursing home care at their assisted living facility. This runs $20-25k/month. When they die, the nursing home collects against residual less liquid assets.

My in-laws are in Depends, one with advanced dementia, the other with cognitive impairment.

Ryan, as an MD, I would say here in Canada on the financial planning side, you and Garth should also factor in the MAiD option. Here in BC, the current rate of MAiD is 5% of all deaths (and climbing). On Vancouver Island, it’s 8%. A significant percentage of your clients will not incur high expenses in what Garth refers to in the “thirsty diaper” stage, as they will select the less costly MAiD option.

BC Doc

#91 Andrewski on 12.03.22 at 6:39 pm

#37 Russ, friends are boarding this cruise today:

https://insiderexpeditions.com/antarcticawithjimmybuffett/

#92 Wayne on 12.03.22 at 6:46 pm

Hi Ryan, would love to hear your take on why Pref’s are struggling. Thanks

#93 Flop… on 12.03.22 at 7:27 pm

I’ve heard of a Reverse Mortgage, but not of a Reverse Retirement, but upon further reflection it appears it might have been what I’ve done.

What do most people seem to want to do with their money at retirement, buy a house, or travel a lot seems up there on a lot of lists.

Being from a backwater, I was able to buy a house when I was 19 or 20.

Got bored, felt trapped and old before my time, decided to sell and go out and see the world.

Got a U.K working holiday visa for 2 years, 9/11 happened so it got extended, got a Canadian working holiday visa for one year, now I’m a dual citizen, was granted an Irish working holiday visa, but never activated it.

This information is most likely to help someone who is feeling trapped, maybe even disillusioned, living in the GTA or GVA but then again I was just a boy from Tasmania who started talking to a guy from a new football team with travel experience who walked me through the necessary step to turn the page on that chapter of my life.

Yeah, interest rates have gone up, but maybe in the meantime you forget about real estate for a few years and go and get some life experience and some new friends.

I’ll just focus on two, you can do the reverse of what I did by living in Australia for a year, the Australian/ Canadian numbers of people going in the opposite direction used to be capped at 5000 travellers per year.

The details…

Australian Working Holiday Program

Length of stay allowed…12 months

Cost of Visa… 510Aud

Canadians up to 35 years old.

So a few things, if you get a job you can probably get that money back in the first few days or so.

These age requirements have changed a lot over the years, around 20 years ago when I was living on these visas, 25 was the average age of most of the countries I was interested in,now you have a full decade up your sleeve.

At turning 26 I had just ruled my self ineligible to get the Canadian version, then later in the year they changed the age restrictions to 30, I think, I applied and the rest is history.

https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing/work-holiday-417

U.K Working Holiday Visa

The details…

Length of stay allowed 2 years

Age restrictions up to 30 years old.

Application fee £260

https://www.canada.ca/en/immigration-refugees-citizenship/services/canadians/international-experience-canada/work-travel-united-kingdom.html

So, a lot can happen in 2 years, you can come and go as you like, I travelled all over Europe and the Middle East, but I had buddies who go homesick and went back home for a while or even for special family occasions that they didn’t want to miss.

You don’t have to work if you don’t want to, you don’t have to have employment before you get there, it’s just a back up plan and allows you to stay for a longer period than a normal visitor visa.

I decided of the cuff that I didn’t want to do my trade and decided to get a job for a landscaping company and got to do stuff at The Chelsea Flower Show and work for late Microsoft Billionaire Paul Allen at his Monaco Villa, I could no have planned any of this, door just open when you knock.

You are eligible to work, no sneaking around, I was given a health care card, and you work when and for whom you choose, some countries want to see a little bit of money in your back account upon processing just so they know you’ll be able to fend for yourself for a little while.

Some people think long term travelling means living of a credit card and getting into debt, when I got to Canada I had $10,000 leftover from my time in Europe in the bank ready to see Canada.

You could do Ireland, on top of Australia and The U.K , that’s 4 years you’ve managed to get Canadian real estate out of your head.

Final thought, don’t worry about being lonely, there’s whole communities set up to look after you, I flew to London with one friend, there was a whole network of Canadian/ New Zealand / South African Australian etc travelling companions, they had about 5 apartments on the go, constantly welcoming newcomers and saying goodbye to people whose visas had expired, it was easier for everyone involved including the rental companies just to keep everything ticking over.

I celebrated my first Canada Day in London, and went to work with a massive hangover the next day, I should have stayed home, who was I trying to impress, it was only a working holiday job…

M48BC

#94 Ronaldo on 12.03.22 at 7:32 pm

#1 Paddy on 12.03.22 at 10:44 am
“For our younger, millennial readers you can probably skip today’s blog since I’m going to focus on some of the factors needed to ensure a successful retirement”……uh what Ryan….no, everyone needs to read and heed this advice!

A great book I read recently(I believe it was mentioned by a fellow blog dog) is “Die with zero” by Bill Perkins.
He made an excellent point about giving money away while you’re alive instead of waiting till you’re dead.
—————————————————————
Several years ago I ran across a posting:

“Monday, February 06, 2006

DIE RICH?

I was in the bookstore today just browsing book titles. I saw a book called “Die Rich”. I thought about that for a moment. I realized that “Dieing rich”, is great, but wouldn’t it be better to die broke? It seems like dieing rich isn’t quite maximizing your wealth. Bad planning actually. That’s like dieing hungry with a fridge full of food. You can’t eat it after you are dead.

Unless you give it all to kids and stuff, which is nice, but if you die broke it could mean you gave it to them before you died and at least had a chance to enjoy watching them use some of it. And that shouldn’t be the point of building wealth. You should hopefully have taught them well enough on how to build their own wealth, unless you don’t know how to do it yourself, and then you will undoubtably die broke. Just a thought.”

My own parents both passed on most of their wealth to their 8 children before passing on. My brother in law just moved into a care home after my sister passed away earlier this year. He is 90 and just sold his home and has passed on most of his wealth to his 4 children.

I too plan to do the same. What is the point of sitting on huge sums of money when the young people today are struggling to make ends meet. What sense is their in that when you have a home worth over a million dollars which will be more than enough to keep you in your retirement years where your spending is minimal. We have opened up RESPs for our 3 grandchildren and have maxed them out each year so this will be some relief for the parents going forward.

Once we are at the age where we will be looking at selling the home and moving into a retirement home which would be in the next 10 years then our plan B will take effect. Our pensions will be more than adequate to pay for our accomodations.

At this time we only are looking at 4 years forward like the government does and change our plans accordingly.

#95 Flop… on 12.03.22 at 7:40 pm

Someone out there might get some benefit from this article I saw today as well.

Probably going to use up my allowed monthly word total in a day or two.

Words.

You know what they say, if you’ve got ‘em, type ‘em…

M48BC

“Post-retirement depression: recognizing the signs

You’ve worked all your life with retirement always on the horizon ahead. However, when you finally reach it, it may not be what you expected. While research published in the Journal of Happiness Studies suggests that people do experience a boost in life satisfaction around their retirement, the same study notes that it often precedes a waning in happiness in the following years. In fact, the chances of a person facing clinical depression increase by a massive 40% after retirement, according to the London-based Institute of Economic Affairs.If you’re about to retire or have already done so, looking after your mental wellness is a top priority. That means recognizing the signs of depression early on and taking action. With that in mind, let’s take a look at the warning signs of this mental health condition as well as some of the ways you can manage it.

Sign: Loss of interest in your hobbies
Retirement is the ideal time to pursue a rainbow variety of hobbies and interests. However, if you experience a loss of interest in the things that once brought you pleasure, that could be a sign of post-retirement depression. You may find you fail to enjoy the activities that once made you happy, leading to a disinterest in doing them.

Sign: Finding it hard to sleep
If you’re experiencing any form of depression, it can impact your sleep regimen. Insomnia, or a lack of ability to sleep, has been linked to cases of clinical depression. You may find that you struggle to fall asleep each night or that you rarely sleep through the night. Should you find your sleep has suddenly changed, speaking to a doctor or medical professional is the next step.

Sign: Sleeping too much or too often
Do you feel excessively tired throughout the day? Depression may cause people to experience hypersomnia, or an increased need for sleep. The reason for this could be that the mental condition interferes with a person’s circadian rhythms, messing up their sleep patterns. If you have been sleeping at odd times, such as in the middle of the day, you may need to figure out what the underlying cause is.”

https://www.msn.com/en-ca/health/mindandbody/post-retirement-depression-recognizing-the-signs/ss-AA14PiAH?cvid=b0599d0639a34d318851c1f160147fe1#interstitial=1

#96 Jo on 12.03.22 at 7:54 pm

I don’t thank you guys enough Ryan, Doug, Sinan, Tatiana and Garth. This post is so awesome today not only for the content, but also for all the great comments it incited. Retirement is a little scary, but nice to see I’m in good company. Some great advice from many of the blog dogs today. One thing my partner and I do everyday is be active, walk, ride our bikes, keeps our stick on the ice. Yes, the money thing is important too, and we have these great mentors that have helped us all along the way, for FREE. Thanks Garth and Co., you guys are the best.

#97 Russ on 12.03.22 at 8:02 pm

#37 Andrewski

That looks like a cool tour.

Another good point that is Dr. recommended is to learn/practice language or music skills as you age.

I wonder if we could bring our hatchets* along on the cruise and jam with the Coral Reefers.

* axe is slang for a musician’s guitar, so being as an ukulele resembes a small guitar…

Cheers, R

#98 Dr V on 12.03.22 at 8:06 pm

Great post, and many good comments too!

One thing to consider when figuring out that number is
the composition of your savings/investments. All or heavy on the RRSP? You’ll need more as it is fully taxed.

Also good to separate out your “must have/do list”. Add up your next vehicle, dream vacation, other toy(s), big renos etc. Keep that amount handy or budget for it in the first couple of years. Add it to your “number” from above. Even if your investments fall, you can still take advantage of good deals should they come up.

#99 Albertaguy in AB on 12.03.22 at 8:27 pm

#64 4% rule is flawed

Thanks for that bogleheads reference…i found this..

https://www.bogleheads.org/wiki/Variable_percentage_withdrawal#VPW_Accumulation_And_Retirement_Worksheet

Ryan your thoughts?

#100 VicPaul on 12.03.22 at 9:20 pm

#18 Sail Away on 12.03.22 at 11:57 am
#111 Observer on 12.03.22 at 9:59 am

From what I observe, Faron doesn’t incite so much as he REACTS to the narcissists (particularly SailAway) and neanderthals who themselves are the ones that endlessly incite.

—————

From what I observe, Faron trolls the comments looking for fights with people who have zero interest in engaging with him, so he insults, mischaracterizes and demeans to get a reaction, and then uses that reaction as fuel to fight, fight, fight… also, the slightest disagreement and he turns a previous positive interaction into a new enemy.

Having run across people like this in life before, I twigged his pathology early, but there are many others on here who engaged in a friendly way and all was fine, until there was an opinion difference… then insults and a new enemy. Toxic.

Remember 2 weeks ago I offhandedly mentioned traction devices would be helpful if hiking Benson in the snow? By no means could anyone expect this would trigger ‘Faron Blitzkrieg’, but suddenly (well after hundreds of comments) I, and SAR, are full of sh!t, for, like, still recommending traction devices. But the topic is irrelevant. If not this topic, it would 100% definitely be something else.

Sad. Funny in a way, but mostly sad. And nobody wants to see it.

*********

Thank you Sailo, for sharing your time to clearly lay out exactly what goes on with THE ideological narcissist
that continually fouls the waters of Garth’s financial spa with hateful name-calling…while claiming to be a tolerant lefty.

Geez, his cognitive dissonance must be deafening.

M58BC

#101 crowdedelevatorfartz on 12.03.22 at 9:32 pm

@#91 BC Doc
“A significant percentage of your clients will not incur high expenses in what Garth refers to in the “thirsty diaper” stage, as they will select the less costly MAiD option.”
+++

MAiD option.
Medically Assisted Suicide?
Canada has just changed the MAiD law to allow not only terminally ill people to request MAiD but as of Mar 1st. 2023 people with Mental issues will have the ability to end their life.

“Just give up. Here’s a pill.”

Canada now has some of the easiest rules for assisted suicide……. on the planet….

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwjOz8Xc9d77AhUFMDQIHW8eCKIQFnoECAkQAw&url=https%3A%2F%2Fwww.camh.ca%2Fen%2Fcamh-news-and-stories%2Fmaid-and-mental-illness-faqs%23%3A~%3Atext%3DRight%2520now%252C%2520people%2520whose%2520sole%2Cmeet%2520all%2520the%2520legal%2520criteria.&usg=AOvVaw3J1ak8AGySdJpPeIsHV9ZG

Gee perhaps the Liberals hope that will clear up the hospital wait lines?

Unbelievable.

#102 VicPaul on 12.03.22 at 9:42 pm

#41 Dolce Vita on 12.03.22 at 2:12 pm
Who am I? Why am I here?

Time of my life here in Italia retired, hard not to do in the land of La Dolce Vita and Il Bel Far Niente. People pay big bucks to come here at least once in their lifetimes, I walk in her bosom. A big smile every morning.

*********

I’m thinking of taking the sindaco up on his offer – he’ll give me 30K and a house. I’ll live there for a couple of years and then retire to my spectacular homeland, Croatia – and use the Italian place as an Airbnb.

Dolce, can you confirm the few cities that are giving away residential antiquities?

M58BC

#103 Doug t on 12.03.22 at 10:14 pm

Will cat food be unaffordable when I retire ? Asking for a friend …….sad face emoji

#104 IHCTD9 on 12.03.22 at 10:26 pm

#81 Flop… on 12.03.22 at 5:03 pm
Yeah, retirement for myself at the moment is just a dream.

It still has potential, but I’ve seen the other side.

My Mum and Dad moved to the tropics in Queensland, and almost immediately Dad was diagnosed with the cancer he succumbed to earlier this year.

Not much of a retirement.
———-

Yeah, that’s the crapshoot we all face, Flop. So many former coworkers of mine checked out in their mid 60’s with zero retirement. Some you could say asked for it, but others should have lived to 100.

All you can do is hope for the best, and prepare for the worst. Also makes sense to pack it in as soon as you have enough – if you hate going to work. Or maybe dial it back to part time – personally, I like that plan. I know one guy who retired, but took up a part time gig delivering KFC. Loves it, turn your brain off, 2-3 days per week pay, some good tips here and there, and damn good free chicken every shift he works. Sounds good to me!

I think it’s tough to arrive at a proper perspective wrt money, until you feel you have enough. Up till then, you’re too busy trying to accumulate the required pile. You don’t even think about what you’re going to do with it until after you’ve summited the mountain (using crampons per SAR recommendations). It’s then you might ultimately find you’ve got little use for it beyond the unforeseen. And as you’ve pointed out, you might not end up having a choice either way.

#105 IHCTD9 on 12.03.22 at 10:49 pm

#101 VicPaul on 12.03.22 at 9:20 pm
#18 Sail Away on 12.03.22 at 11:57 am

From what I observe, Faron trolls the comments looking for fights with people who have zero interest in engaging with him, so he insults, mischaracterizes and demeans to get a reaction, and then uses that reaction as fuel to fight, fight, fight… also, the slightest disagreement and he turns a previous positive interaction into a new enemy.

Having run across people like this in life before, I twigged his pathology early, but there are many others on here who engaged in a friendly way and all was fine, until there was an opinion difference… then insults and a new enemy. Toxic.

Remember 2 weeks ago I offhandedly mentioned traction devices would be helpful if hiking Benson in the snow? By no means could anyone expect this would trigger ‘Faron Blitzkrieg’, but suddenly (well after hundreds of comments) I, and SAR, are full of sh!t, for, like, still recommending traction devices. But the topic is irrelevant. If not this topic, it would 100% definitely be something else.

Sad. Funny in a way, but mostly sad. And nobody wants to see it.

*********

Thank you Sailo, for sharing your time to clearly lay out exactly what goes on with THE ideological narcissist
that continually fouls the waters of Garth’s financial spa with hateful name-calling…while claiming to be a tolerant lefty.

Geez, his cognitive dissonance must be deafening.

M58BC
———

The dude is obviously sick. Internet addiction, and a likely case of NPD, could be more going on that we don’t know about. All that’s clear is that no healthy 40 something dude acts out like that without something diagnosable going on. Way too angry, even the slightest jilt results in a full salvo of fire and brimstone, right to the max. That kind of indefatigable triggering and rage shortens lifespans, he really should get himself checked out.

#106 SoggyShorts on 12.03.22 at 10:55 pm

#26 Penny Henny on 12.03.22 at 12:38 pm
I know I have posted this before but here it is again.
The BEST retirement calculator (Dr. V recommended)

https://financialmentor.com/calculator/best-retirement-calculator
****************************
That calculator is “ok”. For a far more in-depth calculator that uses historical data rather than having you guess at returns and inflation etc you can check out this:
https://earlyretirementnow.com/2017/01/25/the-ultimate-guide-to-safe-withdrawal-rates-part-7-toolbox/

#107 SoggyShorts on 12.03.22 at 11:00 pm

#7 crowdedelevatorfartz on 12.03.22 at 11:15 am
Interesting info.
I had always assumed a 5% withdrawal rate but 4% seems reasonable.
Factoring in CPP and OAS also helps to bump up the annual income a tad.

*****************
5% is really high, especially for longer retirements.
For example, someone with a 50-year retirement withdrawing 5% would historically fail(go to zero before dying) 41% of the time!
There are a LOT of factors, so using your own unique situation of pensions, expenses and age is essential when determining a historically “safe” withdrawal rate.

https://earlyretirementnow.com/2017/01/25/the-ultimate-guide-to-safe-withdrawal-rates-part-7-toolbox/

#108 SoggyShorts on 12.03.22 at 11:03 pm

#64 4% rule is flawed on 12.03.22 at 3:39 pm
… use bogleheads VPW method and not the 4% rule….
***************
Those numbers are way too high historically, especially for anyone with a retirement horizon of over 30 years.
Also, you have to be comfortable with some pretty massive swings in spending power each year.

https://earlyretirementnow.com/safe-withdrawal-rate-series/

#109 SoggyShorts on 12.03.22 at 11:04 pm

#39 The Dude on 12.03.22 at 2:01 pm
I am a bit confused. If you have a withdrawal rate of 4% but your average rate of return is 6% as always talked about here, your money will just keep on growing.
I am missing something here.
*******************
The sequence of returns.
If your returns are bad for 5 years while you draw down your PF and then good for 5 years you’ll be in bad shape because the “bad” years affected your whole nest egg while the good ones only increased the leftovers.

https://earlyretirementnow.com/safe-withdrawal-rate-series/

#110 Blutterfy on 12.04.22 at 12:03 am

Garth,

Are you going to do a piece on Alberta soon? Danielle smith (if you missed it she’s the premier now until April), and is doing her best to try to ram through a sovereignty bill. It’s quite spectacular. Scaring off investment from Alberta and all. One of her little birdies also told me that they are planning to fully privatize health care – “ rip the bandaid off, the slow gutting and starvation Kenney tried didn’t work so we’re gonna go all at once with smith”. Verbatim. I bought an extra pack of popcorn last week,

#111 Uncle Charlie on 12.04.22 at 12:20 am

I haven’t visited this blog in ages!

Retirement?

Probably not in this lifetime for me.

I spent most of my life touring with bands and recording albums, going for the brass ring. I came as close as you can get without hitting the jackpot but ultimately, it was a huge waste of time. I had some amazing life experiences though!

Now, at 58 I have around $20k invested towards retirement so needless to say I’ll likely work until I die. (Currently self employed making around $26-$28K per year before expenses).

My father died at 65 after 30 years with the government so maybe I’ll meet his fate as well. Otherwise, I now have to wait until 67 to even consider retiring due to new changes coming into effect with OAP and GIS.

In the meantime, just trying to live in the moment and count my blessings. Yes, even poor guys like me have many. :)

#112 Hugh F MacDonald on 12.04.22 at 2:25 am

Retirement what retirement, I’ll be lucky that I get 100 bucks from CPP. Been a bit of a loser I must say. Regardless I have saved my coins. I dare say I am at the point that I might need a Financial Advisor. Garth, thank you for steering me. I miss Boomer and Smoking man. I hate how mean and petty your commentators have become.

#113 Faron on 12.04.22 at 3:06 am

#106 IHCTD9 on 12.03.22 at 10:49 pm
#101 VicPaul on 12.03.22 at 9:20 pm
#18 Sail Away on 12.03.22 at 11:57 am

You clowns are jabbering about me still? Detecting some severe cases of FDS. All while I was having a lovely evening with close and some new friends.

Tractor, I’ll put my health against your SxS ridin’ (physical), Trudeau enraged and misogynistic (mental), hard drinking (physical and mental) arse any day of the week and any metric. Pretty clear you are still feeling wounded by getting hammered by Old Boot the other day and are sniveling in here to lick wounds with a liar (Sail Away — numerous examples) and a deranged lunatic (VicPaul). Apt company for sturdy conservatives. Congrats.

And, yes, I have anger at many of you just as I would have anger at any immature good who plinked pea gravel at me endlessly. Eventually that shit wears thin.

#114 under the radar on 12.04.22 at 5:51 am

Live an ordinary life rich in commonplace. Attending to the small family office while maintaining a healthy dose of humility maintains perspective for me. It’s great to be on top, but never forget what is given can be taken away.

#115 Att on 12.04.22 at 6:04 am

Horrible advice for millennials to ignore retirement advice. If you wait till you get old to prepare it’s too late Ryan, but you do “you”.

#116 maxx on 12.04.22 at 8:10 am

Thanks Ryan, what a purely excellent piece. Nothing in retirement really works unless you wake up with a sense of urgency – every day.

Our retirement began the day we got married and started planning our savings. There was no time to waste: I imagined that it would be the best time of our lives and that´s exactly what it is. We shoveled everything we could into savings and retired at 47 and 50.

We had ¨the holiday year¨ and then started a business, because endless holidays don´t provide lasting purpose. The friends we´ve made through our business are absolutely wonderful.

Society is hooked (read ¨socially engineered¨) on youth and the optics towards older people are not often favorable. Same as ever. Having said that, I often see boomers who look more fit, have better posture and more bounce in their stride than many younger people.

They´re very much alive. They´re the ones who revel in retirement as the lottery win that it is.

What percentage of people in the history of mankind have even had the possibility of owning their life´s time? The health, the means and the choices as to what to do in retirement? We personally don´t like the expression ¨retirement¨, because it reflects more a ¨withdrawal from¨ as opposed to ¨change to¨.

Saving for ¨change to¨ time ownership was a journey filled with inspiration and real results. It was not the sole focus of our youth, nor should it be, because every single day of life is important. Treats and a bit of spoiling are essential to success in saving.

Saving allowed us to buy, outright, our life´s time – early.

Wonderful post, but it´s equally a great read for young people too.

They need people like you to spark the vision of a great time-ownership phase of life.

Once that vision is created, motivation kicks in and magic happens. We were truly fortunate: both sets of parents had the abilities to avoid debt and save.

#117 Re.,Att on 12.04.22 at 8:12 am

I second that . With the TFSA, younger generation needs to use that vehicle .all gains tax free – retirement pension .Both our boys max it every year .

#118 Earlybird on 12.04.22 at 8:31 am

#112 Uncle Charlie
I believe the Liberal government reverse that horrible decision!! Thankfully!

#119 crowdedelevatorfartz on 12.04.22 at 9:01 am

@#114 Faron
“And, yes, I have anger at many of you just as I would have anger at any immature good who plinked pea gravel at me endlessly. ‘

+++

It all becomes clear.
Pink shirt day…..every day.
Dissenting opinions become “bullying”.
How convenient.

#120 Shaun on 12.04.22 at 9:07 am

I am fast approaching the 4% rule, but then you start hearing financial papers writing about 2.26% or even less than 2%

https://www.youtube.com/watch?v=Fny-pvZS-lo

#121 Tony on 12.04.22 at 9:12 am

Re: #65 Tony on 12.03.22 at 3:40 pm

I’m 64 and my plan is to gamble less and less like a madman with each passing year. Fortunately my brother has a son and daughter so all my money is going to them. My cousin has a son but the last thing he’ll need is more money.

#122 crowdedelevatorfartz on 12.04.22 at 9:13 am

@#111 Blutterfly
“One of her little birdies also told me that they are planning to fully privatize health care – “ rip the bandaid off, the slow gutting and starvation Kenney tried didn’t work so we’re gonna go all at once with smith”. Verbatim.”

+++
I hate to say it but Canada’s free “Health Care” is literally dying.
Dreadful waits and lineups all across Canada IF you lucky enough to even have a doctor.
Billions of $$$ spent on more bureaucrats to meet, discuss, report , dicuss, meet again , report, discuss.

Public/private health care is inevitable.
It will be a major election issue in 2024.

Danielle Smith and her populist pandering to the mob?
What the hell.
Its not like any politician won’t do anythingto stay in power.
One only has to see Trudeau’s pandering for Quebec votes with bill C-21.

As for Alberta Heath care?
A slow shuffling disaster.
It also didn’t help that a large majority of Albertans chose to not have their kids inoculated for Covid or the flu.
So after to years of lockdowns and isolation….these kids have even less immunity than “before days”.

Oh well. At least she fired a bunch of the top Health Care bureaucrats in govt.
I never shed a tear when overpaid, underworked politically appointed hacks get the hook.

The entire Heath Care system needs an enema

#123 Ryan Lewenza on 12.04.22 at 9:22 am

Att “Horrible advice for millennials to ignore retirement advice. If you wait till you get old to prepare it’s too late Ryan, but you do “you”.”

It was a joke. Lighten up – Ryan L

#124 Ryan Lewenza on 12.04.22 at 9:32 am

Albertaguy in AB “ #64 4% rule is flawed
Thanks for that bogleheads reference…i found this..
https://www.bogleheads.org/wiki/Variable_percentage_withdrawal#VPW_Accumulation_And_Retirement_Worksheet. Ryan your thoughts?”

The Rule of 4 is a basic starting point. I’m just trying to give readers a baseline and some tricks to plan for retirement. But yes, adjusting the annual withdrawal rate depending on market returns is wise and would better optimize the portfolio over the long-run. – Ryan L

#125 Tony on 12.04.22 at 9:34 am

If you can play golf you don’t have to worry about retirement. My father used to golf in tournaments after he retired and played golf with Cliff Thorburn and once golfed with Mark Roth of bowling fame. My father’s sister was a scratch golfer at the Bayview Golf and Country Club. My first cousin Catherine married one of the golfers there.

#126 Ryan Lewenza on 12.04.22 at 9:42 am

Wayne “Hi Ryan, would love to hear your take on why Pref’s are struggling. Thanks”

Concerns of a recession. Yes, the rising rates is good for Canadians prefs given our fixed resets but with the recession concerns credit spreads have widened which has pushed corporate bonds and preferreds lower. Credit spreads is the difference between government and corporate bond/pref yields. During recessions concerns rise that corporations will not be able to payback the maturing bonds/prefs so they fall more than government bonds with corporate spreads rising. But when the recession concerns recede, spreads will tighten and prefs will recover. – Ryan L

#127 BABY'S BUM on 12.04.22 at 9:54 am

Interesting comments on this one.

Looks like Retirement hit a sore spot for many since its simply not an option.

All I can really emphasize is that you have to find something you enjoy doing while surrounding yourself with people you enjoy being with.

That said…. it is not that easy to do but heck, you gotta at least try.

#128 IHCTD9 on 12.04.22 at 9:54 am

#114 Faron on 12.04.22 at 3:06 am

And, yes, I have anger at many of you just as I would have anger at any immature good who plinked pea gravel at me endlessly. Eventually that shit wears thin.
————-

Bro, it’s worth booking an appt. to get checked out, even if you believe nothing’s wrong. The kind of anger you display here rarely just stays on the Internet, we’ve seen ample evidence of that in recent years. Metal health issues need to be taken seriously – very seriously.

Somethings wrong, Faron.

#129 Dharma Bum on 12.04.22 at 10:22 am

Retirement is great.
For me, anyway.
I am a lazy bum.
I’m 5 years into retirement (I retired as soon as I could), so I’m still in that initial “vacation” stage – multiple trips, no set schedule, lots of sleep ins, do what I want, when I want, etc., etc.
Loving it.
This first stage could last indefinitely, given my predisposition for laziness. Wu Wei, mostly.
Nature never hurries, yet all things get done.
Anyhoooooo…
I realized I wanted to retire after my first day at actual full time work back in 1983.
“This really sucks” – and I have to do it for…how long???
Sheesh.
So, I immediately read a spate of books on the subject (over the next few years), including several of Garth’s and that Chilton one – The Wealthy Barber.
I opened an RRSP and a spousal RRSP, a joint open investment account (plus a TFSA as soon as it was a thing). The wife opened her RRSP and TFSA.
We started saving and systematically investing every single month for around 35 years.
Eventually, through the magic of compounding, I had enough EFFYOO money to tell the boss EFFYOO.
And voila – here I am – full time bum!
Hiking, riding, skiing, walking, roadtripping, barbecuing, smoking (the cooking kind), building, hobbying, reading, podcast listening, movie watching, puttering, working out, listening to music, photography, visiting the kids in their respective cities, helping, volunteering, side hustling, and drinking late morning coffee.
By the way, with the right systematic saving and investment plan, you don’t have to make any serious sacrifices throughout your working life. I always took vacations, had a boat, raised 3 kids, bought a house, and enjoyed all non-work related activities.
Now, it’s all fun, all the time.
Plus, the divvies keep on divvying.
Gotta love it.
Now, time for a nap.

#130 Dharma Bum on 12.04.22 at 10:31 am

Spikes are for sidewalks.

#131 Ponzius Pilatus on 12.04.22 at 10:48 am

#126 Tony on 12.04.22 at 9:34 am
If you can play golf you don’t have to worry about retirement. My father used to golf in tournaments after he retired and played golf with Cliff Thorburn and once golfed with Mark Roth of bowling fame. My father’s sister was a scratch golfer at the Bayview Golf and Country Club. My first cousin Catherine married one of the golfers there.
———————————
Funny,
You say that.
I used to love playing golf.
But since I retired, the love has disappeared.
And with it my proficiency.
And the equipment and the green fees are getting exorbitant.
But then, pickle ball came along.
All is good.

#132 IHCTD9 on 12.04.22 at 10:55 am

#119 Earlybird on 12.04.22 at 8:31 am
#112 Uncle Charlie
I believe the Liberal government reverse that horrible decision!! Thankfully!
———-

Yes, they did. We’re still at 65 for the max. Although my feelings are it’ll be a miracle if I get to retirement and am still able to get CPP max at 65. It’ll probably go higher in the next decade, no matter who is running the show.

#133 crowdedelevatorfartz on 12.04.22 at 11:14 am

No matter how often our stammering Prime Minister obfuscates…..the “silver tsunami” is cresting….

https://nationalpost.com/news/canada/the-health-system-is-bad-now-its-going-to-get-a-lot-worse-and-heres-why

#134 Bluebird on 12.04.22 at 3:10 pm

Excellent article Ryan, thank you !!!

#135 Rudolf Reusse on 12.04.22 at 6:13 pm

When the greater Toronto area was running out of land in the seventies to create more subdivisions, many builders started to erect instead condominiums where the sky was the limit. Emphasis was given only to architectural features to attract purchasers to buy into the new living concept. But from the beginning little or no attention has been to the quality of workmanship and materials used for the construction. Proof: many condo structures are now already in need of major repairs or improvements. In addition many condominium units were sold to speculators and became overpriced rental accommodations. It certainly has not solved the housing shortage in the City of Toronto.

Now a new construction boom is contemplated. Ford’s decision to
release large parcels of land within the “Green Belt” has already triggered secret land purchases from speculative developers ready to build the largest homes on the smallest lots possible. Doug Ford’s promise to build 1,5 million homes by 2031 is simply unrealistic. In addition to the required infrastructure, his “Fata Morgana” will also require 1,5 million cars on the road to go to work or to buy milk.

Rudolf Reusse

#136 ulsterman on 12.04.22 at 11:18 pm

There’s so much variety in retirement needs. My parents live in Ireland and are both retired with paid off homes. Dad does little but walk the dog and watch TV. Seems reasonably content. Lives on his state pension of about 180 pounds a week comfortably because so many things are free or heavily discounted in the UK for pensioners. My mum is similar. Reads for most of the day, watches some tv, and has two cheap one-week vacations in Spain each year. The idea of 50k being “not nearly enough” would be comical to them.

I think many people project their 40-year old dreams onto their 70-year old retirement vision of their lives. Most 70 year olds live pretty sleepy and sedentary lives that are quite cheap to finance.