Can you afford to stop working? It’s a burning question for most. So, how do you stack up?
The average pre-tax median family income of old, retired snorts is $65,300. Of that, about $17,000 (typically) comes from CPP (average $717 a month) and OAS ($687). So, a quarter is government money. The rest must flow from a pension or investments (including RRSPs and tax-free accounts).
How big is the average RRSP? Just over $142,000. The median contribution is about $3,600 a year and (obviously) this isn’t enough to kick out all the income people will need for the last two or three decades of life.
Pensions?
There are 4.4 million of us with defined benefit pensions, typically folks who have worked for some levels of government, or as teachers, soldiers, cops, firefighters or politicians. (My DB pension is $29,000 per year, which I am fortunate enough not to need so it’s donated.) Only 1.2 million people are members of some kind of workplace DC plan (defined contribution) – typically a group RRSP with matched employer amounts and sitting in crappy insurance-company mutual funds.
Thus, a mere 5.7 million people have a pension plan. With 19 million souls employed (which is only half the population) it means 70% or workers have zippo to fall back on – other than government pogey (that seventeen grand a year, on average).
You see the math here? Sucks. Seven in ten have no pension support. CPP and OAS are not enough to live on. The average RRSP is $142,000. The average TFSA is $32,234. So the average investment liquid nestegg is just over $176,000. If you add in real estate, median Canadian net worth is $330,000.
Now everyone is different. Some people have investment real estate and non-registered investment accounts. Some live in Cape Breton, where a fine house is $200,000 and others live in North Van, where that doesn’t even buy a nice garage. Some will be saved by inheritances. Others will be whacked by divorce settlements or maybe dementia. There is no one-size-fits-all when it comes to planning the last third or quarter of your life.
In my experience, (a) most folks wildly underestimate how much income they’ll need, (b) people spend vastly more in retirement than they expected to, with more time on their hands and (c) if you retire on less than half your employment income, plan for unhappiness.
Bank of Montreal’s now-famous report recently found Canadians think they’ll need an average of $1.7 million by the time they hang up their tools. As you can see from the above, that’s 1%er stuff. Totally unrealistic. A survey by the Penguin bank reveals the average retirement age anticipated (or desired). It’s 61. That means about 25 years of life left to finance. Can that happen with liquidity of less than $200,000, or even using a full average net worth of $330,000?
A decumulation calculator, like this one, helps figure it out.
Assuming a 5% annual rate of return on investments and an equal level of inflation, $330,000 in wealth would provide an annual income of $15,000 for 22 years, before being exhausted. So, add that to the CP/OAS income stream and you get and you get $32,000 per year – or about half what most currently-retired couples are bringing in.
In a word, this is deterioration. Average finances are getting worse, despite 70% of people owning real estate, which has just had its best decade ever. The trouble is that incomes have failed to keep pace with costs, so housing has been supported by epic levels of debt while the savings rate has declined (other than during the two pandemic years) and retirement savings contributions have been on the slide for a dozen years.
Says CIBC: “The poll said that 57 per cent are concerned about how they will achieve their retirement goals by their desired age. Additionally, 66 per cent of non-retired respondents are concerned they might run out of money during their retirement.”
And this doozie:
Amid widespread retirement concerns, the survey found that 85% of non-retired Canadians have no official plan to achieve their retirement goals. Among those surveyed, 37% said they delayed their retirement due to the economic environment. Amid current economic conditions, 57% of Canadians surveyed said they are focusing on meeting their more immediate financial needs over planning for the future.
This is a trainwreck. Do not be part of it. Keep reading.
About the picture: “I’m a long time reader of the blog,” writes Joseph, “and tell most people I know to read it. I also took one of your life lessons to heart and got a dog with my girlfriend. Arthur is an Aussie Shepherd Border Collie cross. He’s five months old and full of crazy energy. Tucker the cat is almost 3 and has no time for the pup. This is a rare moment where they’re both sleeping peacefully and probably the closest they’ve been without Arthur jumping up and taking paws to the face like an average Joe would against the heavyweight champ. The Rubbermaid lid is a handy door blocker that Arthur will soon solve.
174 comments ↓
Chicken little soiled his pants.
https://ca.finance.yahoo.com/news/bank-of-canada-holds-key-rate-steady-first-major-central-bank-pause-hikes-150827854.html
“Overall, the latest data remains in line with the Bank’s expectation that CPI inflation will come down to around 3 per cent in the middle of this year,” the Bank of Canada said in a statement released alongside the rate decision.
Imagine the amount of lying in order to achieve that.
How come inflation is only subdued here while roaring everywhere else so people will keep increasing rates?
As expected – stubborn, blind, confused central bankers.
I thought you’d post early today after the rate announcement. Also thought the post would be about the rate announcement. So, no rate increase, means inflation will increase with our dollar lowering in value.
Good for the pensions that are indexed to inflation though.
Sad to think that $1.7MM is top few %, if not top 1%.
I’m 51, wife is late 40s and our net worth is about $3MM. I don’t feel like a Top few % person. I feel we are in good shape financially, however I don’t feel there is much wiggle room for unexpected expenses.
So after long years of strong growth in a rich G7 country 85 % of people can not retire…
Somebody care to explain, please? A politician, central banker, economist?
That is one of the most noble things I have heard Garth. I would expect that donating that money provides far greater satisfaction that spending it.
that will end well with 35 to 70 year mortgage amortizations.
Tiff has now acknowledged he is T2’s puppet.
Why isn’t the dog lying on something soft like a blanket? He wants to be near the cat as all dogs do, so move his dog bed. Sheesh.
When I was an idiot kid in my early 20s who was still smart enough to start saving early, I asked the nice lady at the bank how I should invest in an RRSP and of course they pointed me at an escalator GIC we seemed like such a great idea at the time but in reality it was doing less than nothing – treading water or losing money against inflation. I’m much wiser now, but I see so many people still think of either their a savings account or a GIC when it comes to investments.
So, no surprise: BoC left the interest rate unchanged today.
And a comment following up on yesterday’s question to the steerage section:
Tiff will not make a decision based on the value of the currency. As stated in the BoC monetary policy page (https://www.bankofcanada.ca/core-functions/monetary-policy/):
“The objective of monetary policy is to preserve the value of money by keeping inflation low, stable and predictable. This allows Canadians to make spending and investment decisions with more confidence, encourages longer-term investment in Canada’s economy, and contributes to sustained job creation and greater productivity. This in turn leads to improvements in our standard of living.
Canada’s monetary policy framework consists of two key components that work together: the inflation-control target and the flexible exchange rate. This framework helps make monetary policy actions readily understandable, and enables the Bank to demonstrate its accountability to Canadians.
Canada’s flexible exchange rate
Canada’s flexible exchange rate, or floating dollar, permits us to pursue an independent monetary policy that is best suited to Canada’s economic circumstances and is focused on achieving the inflation target. Movements in the exchange rate also provide a “buffer,” helping our economy to absorb and adjust to external and internal shocks.
Understanding exchange rates
The foreign exchange market determines how much the Canadian dollar is worth. At the Bank of Canada, we very rarely intervene to support its value. ”
Also, it is worthy of note that according to the BoC, rate setting actions take time to take effect, so Tiff would be amply justified in waiting. From the same policy page (emphasis added):
“Monetary policy actions take time
Monetary policy actions take time – usually between six and eight quarters – to work their way through the economy and have their full effect on inflation. For this reason, monetary policy is always forward looking and the policy rate setting is based on the Bank’s judgment of where inflation is likely to be in the future, not what it is today.”
Has it been 6-8 quarters since the current 4.5% level was set?
Note that the rate setting decision is based on “where inflation is likely to be in the future, not what it is today” – straight from the BoC’s mouth/page.
So no, Q1 inflation will not be the key factor in Tiff’s decision for April, 2023’s rate announcement. It will rather be the expected inflation figure 6 quarters from Q2, 2022, if BoC is to be believed.
(My DB pension is $29,000 per year, which I am fortunate enough not to need so it’s donated.)
——–
Such a bugger.
Ever thought of using your excess cash flow to pay living wages to the Amazons?!?
Grievance on the way.
Emma Zaun
Shop Steward
Tiff wimps out. No surprise. 3% by summer, eh? About as sure as the Leafs winning the cup.
“Keep reading”
But the comments are even worse (like mine for example)! A train wreck plus meteor strike with famine sprinkled on top. Pathetic!
What I heard ( edited) :
-Inflation, while still too high, is coming down due primarily to lower energy prices.
-Growth in China is rebounding in the first quarter, the strength of China’s recovery and the impact of Russia’s war in Ukraine remain key sources of upside risk.
-In Canada, employment growth has been surprisingly strong, the unemployment rate remains near historic lows, wages continue to grow at 4% to 5%. Inflation eased to 5.9% in January, reflecting lower price increases for energy, durable goods and some services.
-Price increases for food and shelter remain high, causing continued hardship for Canadians.
-Overall, the latest data remains in line with the Bank’s expectation that CPI inflation will come down to around 3% in the middle of this year. +++ ///
BOC cannot control global energy/ commodity prices, and with ‘China rebounding’ and no peace negotiations in sight for the war it seems like energy prices will go up. If ‘unemployment is at historic lows and wages are up’ why are the banks setting aside 2.4 Billion in loss provisions unrelated to mortgage debt? Food and shelter costs remain high? No sh_t Sherlock, and those are the necessities of life. 3% by July? I’m skeptical.
I enjoy this blog for the information it provides, like the average income for retirees. Which leads to my next point. I am the happy recipient of one of those much envied ‘gold-plated’ government pension plans in addition to CPP. No OAS as yet, but coming soon. My partner however only has CPP plus RRSP/TFSA/investments. OAS coming soon there as well. Our combined gross income from all sources including that much envied DB government plan is roughly $80K. I’d add my gold plated plan contributes less than half of the annual combined gross. Suffice it to say that an unfortunate life event such as divorce would be a complete financial disaster for us both despite that much cherished DB plan. So the fact that the ‘average’ retirement income is only $65,300 before tax underscores the importance of planning for one’s future.
Now, we live what I consider a very comfortable life on that combined income. However, we entered retirement with no debt whatsoever other whatever charges we rack up on our credit cards from the previous month. We never carry an outstanding balance on our cards. And yes, we own our home outright, so our housing costs are limited to property taxes, utilities & maintenance. My point? One can live comfortably on far less than a $1.7 million nest egg, but that comfort very much relies on being debt free & having reliable sources of monthly income. Unless or until CPP contributions – a DB pension available to all working Canadians – are increased enough to provide a much higher monthly benefit to retirees those who can’t or won’t set aside funds for their future are not going to enjoy their so called ‘golden’ years. Yes, I know CPP contributions have been increased & will continue to increase in the short term, but frankly the annual hit should be at least $6K per annum & preferably $8K so that retirees get at least $30K or more in retirement to live on, because they are going to need it. Seriously.
I’m shocked at the low number of employees participating in a DC plan. I wonder if this is caused by employers not offering a pension savings plan (or enough match) or low take-up of RRSPs in general. Something to be said for the forced saving model offered by DB plans.
So Tiff is betting on lower energy costs to cool inflation. Meanwhile, Buffet just upped his stake in Occidental Petroleum. Who do you think is going to be right?
The car dealer tells us we need more horsepower than are actually necessary.
The realtor tells us we need more rooms than are actually necessary.
The financial advisor tells us we need more savings for retirement than we actually do.
They all do this for their own self-interest. They are framing us.
Let’s put the rational thinker hat on, shall we?
1. it would be absurd to think that in Canada many could have 1.7mil for retirement – most Canadians barely make ends meet. Many if not most aren’t earning that much during their entire life, even before-tax dollars.
2. if a high percentage of retirees had that type of savings, they would be meaningless because prices for retirees-dedicated services would skyrocket accordingly (same as happens when the minimum wage increases – the necessities of life go up in tandem).
3. it’s actually good (even if it’s a cynical perspective – but realistic) that a chunk of retirees have very little savings, because they will keep prices for retirees-dedicated services reasonably low, thus accessible to the better-off retirees.
There are a LOT of nice activities to do when retired, many which are completely free (or almost), such as:
– reading
– walking
– socializing
– off-season traveling
– volunteering
– various non-expensive hobbies
We North-Americans are taught to spend-spend-spend, because that’ll buy as happiness. And that leads us to a life of unhappiness.
In conclusion: don’t fret during you good years about retirement. You’ll get there, and at the end you’ll die, like everyone else.
That is indeed very decent of you to donate your DB pension, Garth. I hope to one day be a position to be so generous.
No surprise from the Tiffster. He chose a lower dollar and higher inflation, as expected.
It’s funny to hear all those central bankers talk now about how monetary policy has lags. While I agree, why weren’t they talking about this when they held policy rates at or near zero for eons when inflation took off and persisted? Funny how it only works one way, apparently. It’s almost as if their policy is intellectually inconsistent and they’re trying to come up with plausible-sounding excuses not to prick the asset bubble and continue inflating away the debt. Institutional failure, anyone?
This is the central bank equivalent of “Thoughts and prayers”.
Thanks Garth, good article.
The industry can also play a role in retirement calculations.
Organized crime, for example… employees rarely have to worry about money for retirement, or retirement at all. Peace of mind.
That Dingo took my baby, and Tiff took my future.
Fun calculator, thanks Boss!
Pulling 4% of initial balance yearly while earning 3% above inflation, lasts 43 years.
Earning 3% below inflation affords only 19 years.
Oh tiff!
This coming from a moneyman, I suppose the implication is a small financial seismic tremor, easily calculated by an actuary.
But what might be incalculable is the social and political fallout which is more worrisome.
If history is any guide as the watering hole dries up, the animals start to look at each other differently.
Greedy curmudgeons will be a force to deal with, God help us.
Im really looking forward to more food inflation.
If the BOC raised rates it would fight inflation but it would create a situation where people who paid WAY too much for their house could no longer make payments. They would have to sell and that would cause home prices to return to normal.
We don’t want that.
Im happy working my ass off and paying rent while SOME Canadians make billions of dollars in untaxed unearned wealth without work.
What a Country you have here.
3% by July. Clueless, or worse
Canada.
– Debt
– Retirement cliff
– Real Estate
– 6 months of crappy weather
Lucky us with these 1st world problems.
#3 Chris on 03.08.23 at 11:00 am
Sad to think that $1.7MM is top few %, if not top 1%.
I’m 51, wife is late 40s and our net worth is about $3MM. I don’t feel like a Top few % person. I feel we are in good shape financially, however I don’t feel there is much wiggle room for unexpected expenses.
—————————————————
Interesting. We are in the same boat. (although I can only wish to be 51 again) Roughly the same size portfolio. We feel exactly the same way… in good shape but still need to be careful.
“incomes have failed to keep pace”
The best trick that capitalists ever pulled off is convincing people that the ruinous effects on the retirement prospects of workers caused by capitalists’ cancellation of pension plans and stagnating wages for the last 40+ years was a spending problem on the part of us working stiffs.
If you’re feeling pleased with yourself because you don’t have that problem, and you think it’s because you’re smarter and/or more disciplined than the 70% of Canadians who do have that problem, I can tell you right now that you’re wrong. You’re just conceited, and earn more money than those 70% of Canadians. From looking at the blog dog income breakdown on Garth’s polls from time to time, it’s a pretty safe bet.
#4 Summertime on 03.08.23 at 11:03 am
So after long years of strong growth in a rich G7 country 85 % of people can not retire…
Somebody care to explain, please? A politician, central banker, economist?
________________________________________
Why would you want to ask them? Those are absolutely the wrong people to ask.
The right people to ask are the ones who who found a way to make the situation work for them. Any investor who figured things out early, employed some discipline along the way, stayed invested over the long term, and now doesn’t need to worry.
Hard to spot those type of people as they probably ‘live quietly amongst the masses’, as our host instructs every so often.
So Dollarama will continue to beat earnings estimates, eh?
Ruh roh, looks like trashy Elon Musk’s fraudulent software has needlessly killed another person. Note that these are the accidents in which FSD/EAP don’t blink off at the last, most impossible, second.
Feds Suspect Tesla Using Automated System in Firetruck Crash
We also learned today that Tesla doesn’t fasten steering wheels on it’s cars properly. Elon Musk is a disgusting person.
The demonstrable deterioration in Canadians’ finances serves as an important clue as to why “no one wants to work anymore.” The younger generations are getting screwed and are getting fed up with it. When you remove the possibility of reward it affects people’s motivation. Go figure.
As to expenses in retirement, my immediate bubble suggests that you can get along with quite little if you’re lucky enough to stay healthy. My mother in law didn’t top $40k her entire career, yet raised a daughter – part of it by herself – sent her to semi-private school, and is living happily, though modestly, on her pension. Father in law lives off of zero savings or pension – exists only on OAS. He gets by, but it’s definitely nothing to strive for.
My parents are better off, yet probably spend well under $80k combined per year. Dad, at 79, still works a few months out of the year by choice. They’d easily have the means to spend a lot more but for some reason, despite their age, they don’t want to dip into their savings and investments. I’m told that there’ll be a healthy inheritance one day. I say we’ll talk about it in 25 years or so.
Spouse and I are lucky millennials that currently have employers that offer defined benefit pensions, though I’m hoping to change professions soon, which will cause me to lose mine. We each make average money but finances are looking okay. I credit living in a low cost of living area (by Canadian standards) and being able to differentiate between wants and needs.
Good thing I don’t plan on ever retiring
Don’t read the comments anymore and rarely leave one. However, I want to thank you. This is the fourth column in a row where you have hit it out of the park: frightening summations of Canadians’ financial affairs. I’m 69, my wife is 61. We both retired at 60 and should have a comfortable retirement no matter how long we live. We had parents who grew up during the Great Depression and they taught us to save and be wary of debt. In more recent times, being a faithful reader of this blog has only reinforced their lessons. Old and poor is one definition of hell.
Ten years ago a co-worker with two small children told me he had no RRSPs. His house was his RRSP.
So goeth the future.
ATTENTION KMART SHOPPERS – prepare for impact
I always thought that if you wanted to be able to retire with a reasonable pension that a person should put 18% of their gross income into RRSPs starting as soon as they started work and now since TFSAs are available put the maximum amount you are allowed to every year from your income tax refund on the RRSP contributions.
If you are a member of a DB pension plan, you or someone on your behalf are “putting” pretty close to 18% of your gross income into the plan because that is what actuaries have figured out is the amount that you need to put in to get a pension of 70% of your 5 year average income at retirement as your pension. The TFSA will put some “icing” on your pension cake so you can have an extra bit of fun in the first few extremely valuable years of your retirement.
Another good rule of thumb is to figure out what annual income you would like in retirement and multiply it by 20 and add $200k to get an idea of how much you would need in an RRSP to fund it. You would need a little less in a TFSA because withdrawls are not taxed.
Interesting article. I worked for the Pension Corp in British Columbia and even though I did not deal with the pensioners directly as I was in Systems, I heard numerous stories of pensioners calling in despair.
They could not keep up with the increases in living costs.
Even the gold plated defined benefit pensions along with CPP and OAS do NOT keep up with real inflation.
We have a combined income of 100K a year and our home is paid off and no debt. That provides only a comfortable retirement.
It is important also to keep in mind that more likely than not, one person will go first. That leaves the other with a higher income tax bill and one CPP and OAS
gone.
This post actually made me optimistic. I’m 33 year old, married, immigrated to Canada 7 years ago. I have a net worth of just shy of a 1 million with maxed out TFSA and RRSP (spouse included) and less than 1/3 is real estate. I thought I was way behind the game and worried about my future retirement but maybe I don’t have much to worry.
161 Wrk.dover
“Check this one year score board during Tiff:
My home; down
My currency; down
My stocks/ETF’s; generally down
The bonds and preferred shares I DUMPED at loss; sort of worthless relative to food
The tractor and car I bought less than a year ago, up 20%”
————————————————————
So you consider this 0 for 5, 1 for 5?
Please ponder the likely results if rates were considerably higher. Probably a 2 for 5, but the other 3 would be much worse than they are now.
Tucker’s a handsome fellow!
My fave retirement calculator (courtesy another blog dog)
https://www.financialmentor.com/calculator/best-retirement-calculator
#37
It is important also to keep in mind that more likely than not, one person will go first. That leaves the other with a higher income tax bill and one CPP and OAS
gone.
————————
I thought there were survivor’s pension benefits?
Something doesn’t add up:
70% of Canadians (let’s assume households) own real estate.
Average home value is $600k (being pessimistic here).
So average net worth due to real estate alone should be $420k, not $330k minus 176k = 154k.
Not that I would advise relying on that part of your nest egg for retirement, and it would not get you to $1.7M anyway…
Re: Gold plated pensions
With all due respect…I fail to see why Joe and Jane Average taxpayer is obligated to fund and maintain these?
Maybe back in the day it was not an issue…but with more and more private plans having far too many unfunded liabilities, let’s compare apples with apples.
Gov’ts..last time I checked..are accountable to the voter taxpayer, …and not to be intimidated by and capitulate to….the Public Sector and their bully negotiating tactics.
The way I see it….the future will be a great divide/battle between:
(i)Over-taxed taxpayers
VERSUS
(ii)Public Sector unions lobbying degrees of entitlement.
As I have posted previously…California will be the canary in the mine we have to use for terms of reference on how future unfolds re: pigs at the taxpayer trough.
#138 Ustabe on 03.02.23 at 1:54 am
#157 Sail Away on 03.02.23 at 10:24 am
#50 Sail Away on 03.03.23 at 4:13 pm
SAGI secured. -8.8% since then. Score! Note: Likely more given $186 flat didn’t trade that day and he rounded down to look smrt.
Meanwhile, that money put into SPY is still up 1%. NASDAQ flat. TSLA -3.6% below the $186.
ROTFLMAO. It. Never. fails.
39 Rvanzo on 03.08.23 at 1:41 pm
This post actually made me optimistic. I’m 33 year old, married, immigrated to Canada 7 years ago. I have a net worth of just shy of a 1 million with maxed out TFSA and RRSP (spouse included) and less than 1/3 is real estate. I thought I was way behind the game and worried about my future retirement but maybe I don’t have much to worry.
—————————-
If you’re planning on having kids.
Get ready to save even more.
They are not cheap.
And they all want a house and cars.
Poor you.
In the circle of grey haired, blue rinse set that I travel in, very, very, very few are concerned about finances as they enter their 70s, 80s, 90s and beyond. Most are focused on health issues or staying healthy, grieving a lost spouse or adult child, or spending time with friends, and family.
Some are living on a small pension, investments, or even working part time hobby jobbies which provide them a ‘play’ cheque. Many take the work to have social contact and purpose.
Finances are rarely front of mind, even though only a few have a large nest egg, but more so on quality of life and activities that are relatively low cost.
Sure, if a person wants international travel, new cars, and large homes, more cash is required, but in the slow go and no go phases of retirement, most are prioritizing how they want to spend their final chapter.
Has there ever been a financial services person that hasn’t said, ‘You’re not saving and investing enough for retirement’?
A modest lifestyle doesn’t necessarily equate to a diet of Kibbles and Bits, but rather just living on what a person has.
The spin of ‘fear’ or ‘greed’ might push people to buy more financial products, but it doesn’t necessarily equate to a life well lived or a ‘successful’ retirement.
Upwards of 50% of women who where married to their same partner are widows at 65.
Life can rarely be planned either financially or circumstantially.
#41 Dr V on 03.08.23 at 1:46 pm
Tucker’s a handsome fellow!
My fave retirement calculator (courtesy another blog dog)
https://www.financialmentor.com/calculator/best-retirement-calculator
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The calculator from another blog.
Won’t work on this blog.
And yes, Trucker has a nice set of hair.
But he’s a silver tongued devil.
Good article on pension Garth, thank you for breaking down and explaining the new bogus 1.7 million number that has been thrown around all over the news channels, it made no sense to anyone other than the 1%ers who may need it for their new spring Audi Convertible and golf clubs every year. People have been scared out of their wits ever sense from what they were being told they needed to retire. So, there it is folks, relax a little more, you can now afford to go out Saturday night.
Tiff did nothing that was not expected today in his pause, but saving face is a must in government if you must succeed in your career, you will be wacked again in about six weeks on our next reading for the BOC.
We are at Americas’ mercy any which way you turn or think, they are our economy guiding light, so let us follow along. So, us Canucks had a great start to the new Year, but now it is time to accept the needed Interest rate reality, at best the slowdown/recession will get pushed out a bit. We all have our own ways on how we look at, evaluate, and calculate the projected storm before us. The higher grocery prices are a necessity and it alone will not allow us to see the downturn tornado coming our way. When it happens, the warning triggers before us are Homes, Vehicles, Appliances & Furniture, when they slow, run for the hills.
Home prices in my math and opinion are like this, from January 2023 -Prices have another 10% to drop by year end, given the January $612,000 Canada’s home average, you will see this number come in, give or take a bit around $551,000 dollars by 2023-year end. This is not something that is being wished or frowned upon, it is like a cold, there is no medicine cure, other than time that fixes the problem.
Most of the Canadian home prices will be guided by United States home cost, as mortgage money climbs to cost us more, homes on the other hand, will drop to compensate for the average, affordability has to come out of something and it will be homes.
Lumber and building material stocks just over the horizon will take a dip soon, more new home construction projects will be put on hold until money is affordable again, unless the governments in their stupor start handing out bundles of it for home renovations, to builders in forms of grants, cheap land, and cheap loans, guess who pays for that.
Tiff, will hold out until the next time around, but the freight train is coming and we all know it takes up to two miles to stop a fully loaded train and my friends, we are loaded with debt. Variable rates alone will push many families into insolvencies.
For the claimed realtor glory home sales this past February, pay no heed, it is a little bubble that will soon lower its head questioning what I have done. Our real estate economy is in plenty of trouble and there is no bottom in sight for the remainder of the year.
For many of us commenting and reading this blog, we have had this dance a few times and yet for many others, they will never learn the steps.
Quote of the day: Governments keep plenty of secrets but together, we know There are no free rides, eventually someone must pay and that someone, may very well be you.
Talking about Tesla.
Nikola Tesla and I have something in common.
Both of us studied at the University of Graz in Austria.
The good news, though, is that Canada doesn’t have a mandatory retirement age.
It’s sort of doomy place around here today. Let me inject some sunshine:
If you, after years of fiscal prudence and avoiding Starbucks coffee and Disney channel, have accumulated ample funds for a financially independent retirement, this could be a perfect time to buy some good toys.
Your compound growth runway is shortening and the time value of money is no longer as critical. Treat yourself- buy a boat or RV or sports car. You deserve it.
Rate No Moving! Oh yeah! Tiff is the man (pat on the back), normally he gets a middle finger. Finger to those who called for an increase in yesterday post though. My real estate porfolio uppa uppa! And just in case you think I am stupid, I am moving all my Canadian cash to USD asap, just a couple clicks of the computer mouse really. Get to play both end of the spectrum LOL, uppa on the real estate properties, uppa on the cash holdings (USD that is). Chuckle chuckle!
#45 Faron on 03.08.23 at 1:53 pm
#138 Ustabe on 03.02.23 at 1:54 am
Never, ever take single stock tips on the Internet seriously.
#157 Sail Away on 03.02.23 at 10:24 am
this month’s free cash for us went right to Tesla at $186. Score!
#50 Sail Away on 03.03.23 at 4:13 pm
Huh. +6% since yesterday’s position
SAGI secured. -8.8% since then. Score! Note: Likely more given $186 flat didn’t trade that day and he rounded down to look smrt.
Meanwhile, that money put into SPY is still up 1%. NASDAQ flat. TSLA -3.6% below the $186.
ROTFLMAO. It. Never. fails.
——–
Lol. I considered picking up a bit more today but am in process of buying a boat (welded aluminum, 21′ walkaround center console with T-top) and might need the cash. She’s beautiful.
What’s the point of retiring if you have a nice steady job? Studies have recently come out saying that people that continue to work past their retirement age live longer healthier lives. Retirement is another myth that is being busted. I know a lot of retired people that work part time, not for the money, but just to stay active. Look at Garth Turner, clearly the guy does not need the money, but yet he is still working and drumming up business for his firm, retirement is not even an after thought.
My wife and I are blessed and fortunate enough to both be in a DB pension plan (CAAT and HOOPP). What’s a good way to estimate what those will be worth in 25-30 years? I know there’s the annual statement we receive, but that only estimates what the monthly payout will be based on our current contributions. Just would be helpful to know what the true values might be when the time comes.
42 Ponz
“#37
It is important also to keep in mind that more likely than not, one person will go first. That leaves the other with a higher income tax bill and one CPP and OAS
gone.
————————
I thought there were survivor’s pension benefits?”
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Hey Ponz. I dont think there are any survivor benefits from OAS.
The CPP has a complicated formula to follow and a small one-time benefit of $2500(?).
What I understand is that your CPP will never exceed the maximum. In my case, having taken it early, I would get a small top-up if my wife passes, but I do not know
what figure they use for the “maximum” in this case.
The simplest, and worst result, is a couple that both earn the maximum CPP, in which case neither would receive an increase upon the others passing. At least this is my understanding.
Perhaps another blog dog can supply more details or give better clarity.
Nice day today. Maybe a walk for the doc.
#42 Ponzius Pilatus on 03.08.23 at 1:50 pm
I thought there were survivor’s pension benefits?
^^^^^^^^^^^^
That depends. For example, if both spouses were getting maximum CPP, neither will get survivor benefits.
Also if one starts CPP before 60, then their spouse dies, they may see both a smaller survivor and smaller pension benefit than if they collect a survivor benefit first and wait until 65 or later to collect their combined benefit. Pension calculations are not straight forward. “Dr. Pensions” is a good resource.
#31 Faron on 03.08.23 at 1:18 pm
Yes, Elon is disgusting, but self driving cars are okay for now. No matter how many they kill, it will only be a fraction of the deaths caused by lawbreaking douchebag psychopath humans who continue to be distracted and reckless behind the wheel.
“The average pre-tax median family income…is $65,300. Of that, about $17,000…from CPP…and OAS. So, a quarter is government money.”
Are you mixing family and individual data here? $65k is the retired couples income but aren’t those CPP & OAS numbers for individuals? Meaning, government money is more like 50%?
You know Garth, +10 years ago and out of curiosity I looked up StatCan data about how many people did NOT have a pension beyond CPP, OAS and the number was:
70%.
Not much has changed. Actually, it’s gotten slightly WORSE not just % wise, numerically as well. Below, latest I could find.
———–
CRA Individual Tax Statistics by Tax Bracket (2020 Tax Year), filtered for 65 yrs and over.
Tax Bracket, Number of Individual Tax filers, % of Total, some rounding by CRA:
$48,535 or less………5,277,360 (75.8%)
$48,535 – $97,069….1,344,840 (19.3%)
$97,069 – $150,473…..190,370 (2.7%)
$150,473 – $214,368…..71,720 (1.0%)
$214,368 or more……….80,370 (1.2%)
Total 65+ yrs old = 6,964,650 (100%)
76%, 5.3M +65 yr old Cdns have not much more in income than CPP and OAS.
I oscillate between the 2nd row upper end, 3rd row lower end in After Tax Income (above are Tax Brackets meaning Before Tax Income, after Deductions). For a Paleo with no debt, a paid for down low condo hovel on the last floor here in Pordenone, IT and just myself to look after I think I’m doing OK.
This month 1 day in Rome to meet a former colleague and her husband and then 2 weeks to do my Espagna Reconquista Tour (Madrid, Seville + Environs, Malaga) with day hops to Bordeaux, Lisbon and Porto.
I have to fly Ryanair though, the 4th and 5th rows above can afford a private jet.
———————————
Kudos for donating away your DB pension. You’re a kind man Garth.
RE agent friend today was asked by a potential US buyer want to be if he could somehow secure a BC property on the Sunshine Coast ( Gibsons) at todays sales cost and then assume possession down the road.
RE Agent replied yes it can be done.
And is being done.
On the subject of real estate, something’s up in what Garth calls Bunnypatch (such as my previously unfashionable part of the outer Eastern spiral arm of Ontario).
A lady friend mentioned that her local charity, which provides food baskets for people in difficult circumstances, currently has an embarrassing surplus.
She says so many previously multi-tenant properties have been purchased and turned back into single family houses that about half of her clients have moved 40 km to the nearest city (Cornwall, ON).
Some very rough places have been demolished completely and now lie undeveloped – for sale as lots. Building and renovation of better properties was moving along very fast in the last couple of years but appears to have stopped. Same with sales and development of new lots.
Rents are up, a lot. Until recently, 1960s 3-bed row houses with a useless landlord rented for about $850 pm.
Now these are fetching over $1300 (and the owners still won’t fix the roofs or rotting concrete steps).
Property for sale at the higher end (very large single-family homes $600K and up, mostly off the water/sewage grid) do not appear to be selling, but tiny bungalows within 10 minutes walk of all facilities, having had very fancy upgrades are being sold in a week at $450K. Perfect places to downsize to, if you have cash, I suppose.
#47 Parksville Prankster on 03.08.23 at 1:56 pm
=======================
Good post…Thanks
Spouse and I,… in our early 60’s…. are doing bucket list travelling….while we are healthy and can afford it…
Novelty of travel does wear off….onto other phases of life.
Opened up my spreadsheet. Investment portfolio considering a 4% annual withdrawal at this time would provide a bit more than $62k.
Approximate income tax owing based on the makeup (dividends, capital gains, return of capital, withdrawal from registered account(s)) come to between $2k-$3k.
I get to keep about +/-$60k
Age: 47. No DB/DC pension. Still a ways before receiving CPP and/or OAS. The amounts above don’t include the partner.
Pleased to have planned for today and tomorrow.
Can’t imagine what all these people who will retire with next to nothing at 65 or so will feel like. Imagine at retirement (or before), the spouse wants to divorce and further dilute the little they have invested. What a miserable existence.
And don’t think moving to South East Asia with little to no money will save you.
You come to realize how well healed this Blog’s followers are (per. last income, wealth survey done here).
My prior post CRA 2020 data, this time for ALL Individual Tax filers: Under 20 to 85 and over in Age by Tax Bracket:
$48,535 or less…….…18,756,340 (65.1%)
$48,535 – $97,069…….7,561,520 (26.3%)
$97,069 – $150,473…..1,645,520 (5.7%)
$150,473 – $214,368……460,290 (1.6%)
$214,368 or more…………381,660 (1.3%)
Total = 28,805,310 (100%)
———-
SUPER PALEOS, 85 and over, $214,368 or more tax bracket – total number of them:
12,140
For that same age group, $48,535 or less tax bracket – total number of them:
767,620
Flop Drops.
You want a brand new house in Vancouver for 750k?
Keep dreaming buddy.
How far do I have to go, boss?
Hope.
The details…
Originally asking 979k
Assessment 777k
Just sold for 750k, one year old.
It’s not everyone’s dream.
But there is Hope on the horizon…
M48BC
https://www.zealty.ca/mls-R2756042/11-21196-KETTLE-VALLEY-ROAD-Hope-BC/
There are about a million things a person could do after retirement. Why do people have this extremely narrow-minded idea that work is the only thing a person can do in his/her life? Maybe a good idea to think about someone other than yourself for a change.
===================================
#55 Franco on 03.08.23 at 2:35 pm
What’s the point of retiring if you have a nice steady job? Studies have recently come out saying that people that continue to work past their retirement age live longer healthier lives. Retirement is another myth that is being busted. I know a lot of retired people that work part time, not for the money, but just to stay active. Look at Garth Turner, clearly the guy does not need the money, but yet he is still working and drumming up business for his firm, retirement is not even an after thought.
Retirement can work, as it works in many countries even for low income earners and falling population. It just can’t be left in the hands of individuals.
25% of your income goes to gov managed retirement system – the only system. You pay a portion but company pays almost all of it. You will retire with 60% of your highest income years. You will never go homeless or without health care either no matter what. The system is stable and funded for decades. There it is and works. No need to chase houses or retirement investments. Nobody even talks about it. Downside – you die, all your money goes back to the pool.
Mr Happy on 03.08.23 at 1:13 pm
#3 Chris on 03.08.23 at 11:00 am
Sad to think that $1.7MM is top few %, if not top 1%.
I’m 51, wife is late 40s and our net worth is about $3MM. I don’t feel like a Top few % person. I feel we are in good shape financially, however I don’t feel there is much wiggle room for unexpected expenses.
—————————————————
Interesting. We are in the same boat. (although I can only wish to be 51 again) Roughly the same size portfolio. We feel exactly the same way… in good shape but still need to be careful.
———————————————————-
Unfortunately this way of thinking will probably not disappear even if you had double or triple your current net worth. If you can’t be content with what you have now and feel that it is enough, then what amount will? You’ll keep telling yourself that when you reach “x” amount you will have enough, but then when you finally achieve amount “x” you will realize the same mindset you have now hasn’t changed.
With the income surveys done by Garth, in the past, I would think this article is of little interest to them.
I am one of those people that only has our wonderful government pension, totalling about $2000/month. I live in subsidised housing in Vancouver. I am able to save about $2000 – $3000 per year. I eat well, am active and have lots of hobbies and projects ts to keep me both physically and mentally active. I also have a TFSA savings of about $15000. I’m doing everything I want to do, including travelling, although not as frequently.
Tonight, I’m taking my grandson to see the Whitecaps play, as I have season tickets. So I don’y know who works out these ridiculous numbers needed to retire. Of course I could be the the exception, but I am happy.
Gotta love our next PM
Excerpt from Juniors newspaper….
When asked Monday whether he’d remove the three MPs from his caucus, Poilievre was blunt.
“No,” he said.
When pressed as to why not, he continued: “I’ll tell you this, speaking of caucus. If ever I find out that any of my members of Parliament or candidates have dressed up so many times in ugly racist costumes that they can’t remember them all, they will be thrown out.”
# 55 Franco
Why retire ?
Gave up a 6 figure job having to deal with the dumb asses that took over the company and continually having to steer them in the right direction when they veer off .
So you eventually shut your mouth and put up with them as they slowly push you out after 30 years of service.
(My lawyer advised me not to sue as they chipped away at me over time)
Could of retired 5 years earlier but stuck around for my customers. My finances were in good shape so i really didnt need the income.
I am glad i pulled the plug when i did. No regrets .
Savers and retirees thrown under the bus again but QT in the absence of any rate hikes is pushing up bond yields at the long end. Good news for anyone buying long term corporate and strip bonds.
#59 James on 03.08.23 at 2:51 pm
#31 Faron on 03.08.23 at 1:18 pm
Yes, Elon is disgusting
—
Correct.
Pull your head out ya arse.
Teslas in any kind of automated mode are more dangerous than human drivers and that’s not even taking into account the FSD/AP bail-outs at the last second.
https://www.tandfonline.com/doi/abs/10.1080/19439962.2023.2178566?journalCode=utss20
It’s ethically egregious to run an open beta that endangers millions. It’s ethically egregious to sell an ADAS as “full self driving” and thereby hoodwink idiots into “testing” the software.
Elon is disgusting and everything he touches is, or will become, a disgusting fraud.
31 Faron: Tesla FSD is still beta, the driver is responsible.Tesla FSD will eventually become fully responsible for the driving. ( The new Mexico plant is designed around building the RoboTaxis) Will there be accidents that the FSD was responsible ? Yes, absolutely. This is not the point. When it becomes statistcally 100 times safer to use FSD ( now around 5-10 times), it would be unethical for lawmakers to allow humans to continue driving themselves. BTW, I am always suspicious of people that use hash language against others, it reminds me of how Trump projects his fears/ insecurities onto others.
It’s no problem being old and broke, just get yourself a cheap little apartment and spend your time enjoying the simple things in life. Anyone see the problem with this statement?
What this country needs is a new army corp of house builders whose sole purpose is to build affordable housing. No one gets a free government cheque without a day’s work in the corp. Every grade 12 graduate including women, who doesn’t have a bloody good excuse needs to serve a year or two in the corp. Every sentenced criminal can join the chain gang and start laying bricks. It’s a war against the high cost of living and it should be treated as such. Almost every single problem seems to have the same solution, which is affordable housing. Pitter patter, let’s get at er.
Re: The foreign exchange market determines how much the Canadian dollar is worth. At the Bank of Canada, we very rarely intervene to support its value. ”
From what I’ve seen at least the past decade the Bank of Canada always seems to step in to sell Canadian dollars when the Canadian dollar hits 80 cents U.S.
#29 TheDood on 03.08.23 at 1:14 pm
To the point:
This is NOT what a rich country is.
Having lived in France and Switzerland for example, even in Spain and Greece, I see none of these problems.
“Only 1.2 million people are members of some kind of workplace DC plan (defined contribution) ”
Is that right? It seems really low if we’re including Group RRSPs with DC plans. I worked at about 6 different companies and everyone was enrolled at the company. All my friends and family that work for big companies are using a workplance retirement savings plan through their payroll. Admittedly not all of them in a full DC Pension but all of them at least have a group RRSP with employer match.
Something doesn’t add up.
For a 1 person household, to live in some comfort I figure you’ll need to target a paid-for house, plus 2M in investments.
For a 2 person household, I figure its a paid-for house plus 3M.
Assisted living in your last years can burn funds really fast. You’ll still want to still have 7 figures in capital as you’re hitting 80 or 85 if nature offers you that chance. So that principal needs to stay intact. You can die broke, but you can’t go into assisted living broke.
Canadian Millennials are having a hard time acknowleding they have been taken to the cleaners for 20 years in Canada.
SO what if you are on title to something the bank owns until the day it is paid off in full renters.
Ha! Ha!
#70 Captain Fantastic on 03.08.23 at 3:42 pm
Mr Happy on 03.08.23 at 1:13 pm
Interesting. We are in the same boat. (although I can only wish to be 51 again) Roughly the same size portfolio. We feel exactly the same way… in good shape but still need to be careful.
———————————————————-
Unfortunately this way of thinking will probably not disappear… If you can’t be content with what you have now and feel that it is enough, then what amount will? You’ll keep telling yourself that when you reach “x” amount you will have enough…you will realize the same mindset you have now hasn’t changed.
————————————————
Sorry..I am quite content…Have always lived within my means. Take another look at my user name… I use it for a reason. What I have is enough. Just plan to be smart with it… ;)
In my chat group I predicted PM Trudeau will be gone by June 2023.
Liberal MP Marc Garneau(who ain’t stupid) has just resigned after 15 years and between elections….watch the floodgates open.
75 and I’m working more than I ever did. Freedom 95!!!
Getting fed up with the “woe is me” stories in the press regarding people’s mortgage payments going up.
Where are the sad stories about the people who were priced out and had to leave the place they grew up in and leave family and friends behind?
Or settle their family in a damp rented basement suite?
Perhaps the debters get the megaphone because the media are beholden to the “industry”….lenders and developers?
#40 Dr V on 03.08.23 at 1:43 pm
161 Wrk.dover
“Check this one year score board during Tiff:
My home; down
My currency; down
My stocks/ETF’s; generally down
The bonds and preferred shares I DUMPED at loss; sort of worthless relative to food
The tractor and car I bought less than a year ago, up 20%”
————————————————————
So you consider this 0 for 5, 1 for 5?
Please ponder the likely results if rates were considerably higher. Probably a 2 for 5, but the other 3 would be much worse than they are now.
______________________________
The point portrayed is that only value added through manufacturing ‘stuff’ is the only way I see to come out with near term upside.
We have no use, nor ever will have for the tractor. The stored car is something we will need pretty soon, but not last spring. I’m going on memory of what worked in the 70’s and 80’s during stagflation. Austin mini prices tripled in 5 years and Ford Econolines quadrupled in 10 years, I know from kicking tires and keeping quotes, back then. Unused, garaged tractors don’t depreciate. Ever.
My home isn’t really down, we are in a gentrifying banana belt ocean side setting. Come from away money still being squandered on RE upgrades all around me!
#75 Faron on 03.08.23 at 4:07 pm
Pull your head out ya arse.
Teslas in any kind of automated mode are more dangerous than human drivers and that’s not even taking into account the FSD/AP bail-outs at the last second.
https://www.tandfonline.com/doi/abs/10.1080/19439962.2023.2178566?journalCode=utss20
It’s ethically egregious to run an open beta that endangers millions. It’s ethically egregious to sell an ADAS as “full self driving” and thereby hoodwink idiots into “testing” the software.
_____________________________
Nope. Your own research link mostly just acknowledges how inconclusive it is. And yet you are using that to morally pontificate, but you’re simply not ready for that stage, Faron. Your understanding of ethics is weak in this case. I prefer to step back and look at the numbers and probabilities overall, and not go all “Karen” about the horror of specific deaths and injuries, also known as the “trolley problem”. It’s gonna happen. Human-driven cars have been way worse. The overall numbers matter most to me. The “open beta” of human drivers is catastrophic by any reasonable measure. We have just tolerated it, like the idiots we too often are.
Since early automated testing began decades ago, even before WWII, it has been promising enough that we now have many places that are permitting such vehicles already to operate and are doing pretty well.
https://en.wikipedia.org/wiki/History_of_self-driving_cars
Safety will also improve because manufacturer liability will be a huge risk if they allow these cars to exceed speed limits and break laws while automated in the same way that stupid humans do. The evidence will be clear if they enable that sort of action. The lawyers will win.
There will be glitches along the way, of course, and Tesla is not the best imho, but we are bound to go from close to 40,000 annual deaths from cars in North America to just a few thousand or maybe a lot fewer when the transition is done.
So pull your head out ya Dunning Kruger arse, Faron.
Garth offered good advice to allocate a % of your portfolio denominated in US$ as a hedge to a falling C$.
A declining C$ will help fuel inflation due to our reliance on imports and make any planned retirement vacations in the sun belt more expensive.
Thanks for the calculator but there is one that I find to be much better.
Just wanted to share.
https://www.financialmentor.com/calculator/best-retirement-calculator
@ #68 Iona Castle on 03.08.23 at 3:35 pm
What’s the point of retiring if you have a nice steady job?
************
Another point to consider is once you get near 60, you look around and start to notice people not too much older unfortunately passing away and then you start to see life differently and if you have the means and a bunch of things yet to experience in life….
Self driving vehicles ?
OMG…maybe have Scotty beam you to the planet Klingon..
Stoopidest thing amonsgt many stoopid concepts.
Approx. 300k die each year in Canada. Never bat an eye over immigration numbers. They come with lots of kids and grandparents and want to share homes with their families. Be more concerned about greedy Canadians trying to fleece them at evry chance they get. Builders, developers, realtors, car dealers, travel agents, politicians etc.
Doesn’t a couple on GIS/OAS get around $39k a year?
Guess I’m in good shape. Million saved and two DB pensions totalling $130,000 per year. Will be 56 on retirement. Can’t say I feel that well off….impending retirement is starting to feel like a paycut!
Hi Garth,
First time poster. I was going through your numbers
and it doesn’t seem quite right.
$330,000 * 5% = $16,500 income / annum
$ 16,500 – $15,000 = $1,500 surplus / annum
Assuming the surplus is reinvested, won’t you have
$387,757.80 at the end of year 22?
Much appreciated!
As to the 1.7 required for a comfortable retirement, I say way high.
Currently have just under 1.5 churning out 76k per year in eligible dividends.
Add CPP of 14,400 per year in two years and 16,000(?) OAS in seven years.
That’s 106,400 / year mostly adjusted to inflation with a tax rate that will be under 5 %.
Life’s good.
#88 James on 03.08.23 at 5:44 pm
We aren’t talking about general vehicle autonomy, James, we are discussing Tesla’s garbage approach. The ethical (we are talking ethics, not morals here. If you can’t get that straight, we aren’t going to be friends) “backing” you seem to pointing at is that because eventually the technology will be safer, it’s okay to sacrifice a few lambs along the way. This might be true if there were no other option. Unfortunately, there are and Tesla is going about it the worst possible way and that way is killing and injuring people ate rates that exceed normal human vehicle use. There’s no defending that.
Tesla is fraudulently foisting an L2 system onto a consumer and telling them with faked video backing, that it’s “full self-driving” (i.e. L5). Please show me the independently verified numbers that indicate Tesla’s tech is safer than a human driver. All you will come up with is Tesla’s own numbers that the author I directed you to has corrected to the best of their ability to show that Tesla is causing harm.
Meanwhile, non-fraudulent corps are taking on this project with great care — as they should and are approaching true autonomy.
You seem to be one who considers a couple of vehicular homicides the “cost of doing business” when it comes to developing the technology. This is an ethically void claim. Again, ethics. Save your morals for church.
#3 Chris on 03.08.23 at 11:00 am
Sad to think that $1.7MM is top few %, if not top 1%.
I’m 51, wife is late 40s and our net worth is about $3MM. I don’t feel like a Top few % person.
Top 1% NW for your age is more than double what you have.
#41Z
ORRR…you could go to Turner Investments and use theirs.
Jeeesh people, this guy gives away free financial advice, (along with great, writing, humor and common sense) and neither of you link to his blog? Ugh. (Forehead smack) Much more useful than ones linked to as well. IMHO
Oye-e-vay. Lol. What is this world coming too?
RE: #86 jim on 03.08.23 at 5:40 pm
Where are the sad stories about the people who were priced out and had to leave the place they grew up in and leave family and friends behind?
=======================================
There were plenty of those news stories before the interest rate hikes.
Haven’t heard about any balloons for a while either. Good old news cycle.
#76 4 out of 3 people find math hard on 03.08.23 at 4:10 pm
The only verifiable data on Tesla’s shows that driving using their automation increases risk by 11%. It’s more dangerous to drive a Tesla with automation than without no matter what you or James or anyone else claim. That’s one of the reasons it’s been recalled! Their tech is L2 and has no path to L5 because the model it’s built on is broken.
LOL. Building the robotaxis. Baaaahahahahahaaaaa ha.
#77Bezengy
Great comment and great idea!
Love the corp of house builders idea…I would vote for that!
Yes!! Simplicity in retirement!
Do all the activities that need intense vitality in your youth….it’s also a cost effective plan retiring in a small low maintrnance space. Restful and easy….
1.7 million my arse! Canadastanadians are sooo delusional. I can get by on $ 2 grand a month. Home brew and home grown help out, though. And those great contraband ciggys from our early Canadastanadian brothers on the rez. Such on that, Revenue Canadastan! And just try to tax my garden, Not!
I mean suck on that, taxman!!! Another day, another color revolution being formented by the exceptional warmongers south of Canadastan in Georgia, not U.S.A.
The harder landing? How about never getting started after working since 1978 and being wage restricted to fight inflation and having ones investments knee capped every step of the way through life to date?
It’s not a train wreck it’s a trucker’s wreck
Short, to point. My Father back when, had various changes in employment. We moved quite a few times.
Back then, I was told, house, was a house, shelter, place to raise a family, stay warm, live.
IF, you got your money back, great, IF you lost a bit, Okay, cost to live there, IF you made some, a gift, be thankful.
Nothing more, nothing less, you have to live, have shelter, simple fact.
Not an address, no prestige, shelter, for your family.
Be thankful, and feel blessed to provide for your family.
Simple rules I have lived by. Never forgot them even in crazy times.
Did not buy belief it was end all be all, or a investment.
Shelter for family, a place to live, unhindered and thankful.
Lost somewhere along the way. Sad but true.
Many Canadians are hoping to have the house paid off before retirement, so that they can retire. A reminder that the mortgage is just one bill. Most will still need a job to pay for all of the household bills. And it’s a lot in order to live comfortable.
I look forward to retirement. Maybe 10 more years to go. It’s becoming clear I’m gonna live the same way I always have. In fact, the older I get; the less I give a rip about spending on “stuff” or “experiences”. I’ve already got all the toys I want, and since I purchased top quality USA, Japanese, and German products, they’ll still be working perfectly when I retire. There’s just no way I’ll be spending the level of income that will be available. I’ve never been a big spender, and never will. 30K/yr covers everything with room to spare.
imagine working your whole life, having no children, then having to donate your assets/wealth to charity upon death thinking they will have your best interests at heart … really sad.
My donations give me satisfaction. Try it. – Garth
My first comments ever and I read everyday since 10-15 years now just to say that my hat is off to comments #18 by Lying with statistics works!
“Assuming a 5% annual rate of return on investments and an equal level of inflation, $330,000 in wealth would provide an annual income of $15,000 for 22 years, before being exhausted. So, add that to the CP/OAS income stream and you get and you get $32,000 per year – or about half what most currently-retired couples are bringing in.”
Uhh, the above is ultra conservative with mean 0% real returns so obviously it only lasts 22 years (330,000/15,000). Do that with a more realistic, even still a conservative return, and a person is fine (well, not those living in GTA or Vancouver)
#72 Ed on 03.08.23 at 4:01 pm
Gotta love our next PM
Excerpt from Juniors newspaper….
When asked Monday whether he’d remove the three MPs from his caucus, Poilievre was blunt.
“No,” he said.
When pressed as to why not, he continued: “I’ll tell you this, speaking of caucus. If ever I find out that any of my members of Parliament or candidates have dressed up so many times in ugly racist costumes that they can’t remember them all, they will be thrown out.”
^^^^^^^^^^^^^^
Do you think that what our PM did 20 years ago before he was PM and for which he has apologized profusely is equivalent to what 3 sitting MPs did recently and refuse to apologize for?
#57 Dr V on 03.08.23 at 2:39 pm
Hey Ponz. I dont think there are any survivor benefits from OAS.
Perhaps another blog dog can supply more details or give better clarity.
________________________________
When OAS was $600 each, the survivor got $890 from how I read the info.
I know nothing of CPP survivorship. I’m assuming 60% if the survivor is the lesser beneficiary of CPP.
@#35 Editrix
“Ten years ago a co-worker with two small children told me he had no RRSPs. His house was his RRSP.
So goeth the future.”
+++
Yep.
A friend who lived in the same neighborhood as kids had an excellent job, built a nice house, kids, toys, vacations.
NEVER set aside money for the future
“I thought CPP and OAS would be enough….”
Then the trifecta.
Divorce, Laid off, and then he got very very sick.
Financially destroyed.
Rents.
Works a crappy delivery job.
Realizes he’s going to work until he dies.
Instead of “Pink Shirt Days” and “Politically correct Pabulum”
How’s about a “budgeting course” from the ages of say
13 to 18 in schools.
Warning kids early about credit, interest rates, taxes, etc.
We are set up to fail.
@#39 Rvanzo
Well done!
You are way ahead of 99% of Canadians.
Keep up the good work.
@#50 Ponzie’s Penniless Predictions
“Nikola Tesla and I have something in common.
Both of us studied at the University of Graz in Austria.”
+++
Didnt Tesla die penniless and insane?
i see poverty in canada everywhere. Mostly seniors living on next to nothing, basic old age cpp and supplement for millions and millions of canadians.
They were lied to and mislead about how Canada was going to work out, and there contribution was all for next to nothing, well little canadian dollars that is.
sad , if this isnt a cry for anyone to simply pack up and go somewhere where you can get some sun year round and enjoy a good retirement on a small amount, what are you waiting for.
get your passport and meet me at the airport, we land where the plane takes us. no formal destination in mind. I remember travelling with a buddy we were going to a town to sell stuff, he couldnt believe that I would go somewhere not knowing where i was sleeping that night, I said, dude im more worried about which lady I would be with that night.
@#59 james
“….. self driving cars are okay for now. No matter how many they kill, it will only be a fraction of the deaths caused by lawbreaking douchebag psychopath humans who continue to be distracted and reckless behind the wheel…..”
++++
You are 100% correct.
The miniscule amount of people killed by self driving cars can’t hold a candle to the thousands who are needlessly killed and maimed by distracted drivers.
Thank you Elon Musk.
Elon should receive the Nobel Prize for his humanitarian endeavours.
#114 Observer on 03.08.23 at 7:32 pm
Edit: comparable, not equivalent
#118 crowdedelevatorfartz on 03.08.23 at 7:45 pm
@#50 Ponzie’s Penniless Predictions
“Nikola Tesla and I have something in common.
Both of us studied at the University of Graz in Austria.”
+++
Didnt Tesla die penniless and insane?
———————
That happened and still happens to a lot of geniuses.
I don’t worry.
I’m not that smart.
But you may be right this could happen to Musk.
He’s acting a little weird.
#120 crowdedelevatorfartz on 03.08.23 at 7:52 pm
@#59 james
“….. self driving cars are okay for now. No matter how many they kill, it will only be a fraction of the deaths caused by lawbreaking douchebag psychopath humans who continue to be distracted and reckless behind the wheel…..”
—————
You are 100% correct.
The miniscule amount of people killed by self driving cars can’t hold a candle to the thousands who are needlessly killed and maimed by distracted drivers.
Thank you Elon Musk.
Elon should receive the Nobel Prize for his humanitarian endeavours.
—————
He will. All the above plus saving countless lives donating Starlink to Ukraine and the Iranian women.
Not to mention solar roof systems.
If I ever outlive my retirement funds, I’ll donate myself to the Soylent Corporation. I hear Green is tasty.
#104
Really? Not!
Bit of the ole late great Smoking Man vibe there. Lol
Great that you donate your govt. DB pension Garth. You run a massive business as well as well as writing this blog which has changed the lives of many. You are an Amazing man. Grouchy and Ornery at times but amazing.
What is wrong with people, “active” at #111, another snowflake too lazy to get a job and move out of his mothers basement. Put some pants on and get a life.
#4 Summertime on 03.08.23 at 11:03 am
So after long years of strong growth in a rich G7 country 85 % of people can not retire…
Somebody care to explain, please? A politician, central banker, economist?
*********
How ’bout a behaviourist?
People have free will, to varying degrees, across the globe…what I’ll have for dinner, when I’ll lay down, what I’ll do for work. Here, in a society that has become immeasurably sophisticated at inducing people to buy/shop/you deserve, cave in to instant gratification- you end up where we are. The selfish, over-indulgent state of capitulation for some.
It’s one thing to give a fool a rope and watch him hang himself, and quite another to create a credit-extending marketing machine that, financially speaking, does that to it’s society. Human nature being what it is, everyone thinks they deserve, and these days, the idea of delaying one’s gratification for a later moment is incomprehensible.
Capitalism provides a marketplace with choices – and forces you to make wise ones for your personal situation…because power lies within the individual.
Any other option is collectivist/conformist tyranny.
M59BC
“ My DB pension is $29,000 per year, which I am fortunate enough not to need so it’s donated.” – Garth
That’s fantastic and I applaud you.
I’m in my 50’s and hope to work into my 70’s, at least part-time and as long as my skills are contributing in some meaningful way. I think a negative health outcome would be the only thing stopping me. I occasionally get to mentor/teach gen Z kids and for me it’s a blast – it keeps me young and in touch.
I’ll never buy an EV.
Two reasons.
1. They are not the solution to Climate Change and pollution.
Only smaller cars and reduction of single occupancy cars, and increase in public mass transport will make a difference, IMO.
2. The current price advantage of electricity over gasoline will soon evaporate, due to the capitalistic invention called Arbitrage.
#18 Lying with statistics works! on 03.08.23 at 12:27 pm
“The carriage maker making carriages hopes that men will grow rich and eminent; the carpenter fashioning coffins hopes that men will die prematurely. It is not that the carriage maker is kind-hearted and the carpenter unprincipled. It is only that if men do not become rich and eminent, the carriages will never sell, and if men do not die, there will be no market for coffins.” From Han Fei’s theory of leadership.
—————————
As to your next point; “Live quietly among the masses”
My wife asked me if things get bad are we were Ok financially, I told her that if we have problems then the problems for the entire society will be so bad that no amount of money will provide security.
You do not have to be faster than the Grizzly, just faster than the other people running for their lives.
The “desire to hold money as a store of wealth is a barometer of the degree of our distrust of our own calculations and conventions concerning the future. . . . The possession of actual money lulls our disquietude; and the premium we require to make us part with money is a measure of the degree of our disquietude.”John Maynard Keynes(1883-1946)
“People lacking money worry occasionally about being poor. People who have money obsess about losing it. It’s why rich people never smile.” – Garth Turner
@#131 Dogman 01
So…
Basically…..
Ignorance is bliss?
You are 100% correct.
The miniscule amount of people killed by self driving cars can’t hold a candle to the thousands who are needlessly killed and maimed by distracted drivers.
—————————
Um….give it time….
ICE with drivers have been around for over 100 years
Self driving vehicles ???recent phenomenon
…. death toll will likely catch up in quantum leaps.
I am just going to keep working. Skip retirement. Take nice holidays.
Keep posting and we’ll keep reading!!
North America’s economy will stop like bugs hitting a windshield in the next year.
https://www.youtube.com/watch?v=sTHhnpIOKBo&ab_channel=METPHASTProgram
#129 @J on 03.08.23 at 8:36 pm
@j, thank you, thank you and thank you.
Too many of your generation claw, cheat, and deceive their way to the rat race finish line.
These sloths hold early retirement as the ultimate worthwhile pursuit, it’s so uplifting to see that there are those like you who see the value in contributing to humanity.
Awesome, Your noble legacy will live on.
#118 crowdedelevatorfartz on 03.08.23 at 7:45 pm
@#50 Ponzie’s Penniless Predictions
“Nikola Tesla and I have something in common.
Both of us studied at the University of Graz in Austria.”
+++
Didnt Tesla die penniless and insane?
===============================
Mr. PP ?
….. has patents on Hula Hoop, Pet Rock, Slinky ..Chia Pets and most K – Tel products…..the list is endless.
……these shaped modern civilization !
He truly needs a separate award category…and a jacket with extra long sleeves.
Long time reader never commented. I wanted to provide a perspective on how one can live on the ‘poverty’ pension in Canada. The retirement income of $32K while can be considered on the low side it can be quite comfortable.
My parents came to this country in their late 40s at a previous disaster in Ukraine – Chernobyl + USSR disintegration. My dad retired at 70, mom at 65. Both couldn’t get their degrees and work experience certified here and had to work minimum wage or just above jobs (back in early 2000s that was <$10/hr) to support their family (one adult child independent and self sufficient and one adolescent (me).
On a family income of $50-60K/yr, they were able to save enough for a vacation to Caribbean or US once a year, buy a car and a comfortable 2br/2bth condo (1200 sq ft) in the GTA (Thornhill). Sure their savings for retirement were meagre (~$100K). They are now in their early 80s and living on government pogey (CPP/OAS/GIS). Their condo is paid off, they have no debt and still drive a 20yr old car – Toyotas run forever. Yet they don’t feel poor, far from it. They live in a ‘luxury condo’, with tennis courts, security, party Room and a pool. Their maintenance is high $1000/mth but it includes full cable and all utilities. That’s a steal in Toronto area right now! Try finding an apartment to rent for that. They still have about $80K in savings in TFSA that are sitting in GICs (they don’t get markets so not comfortable with any risk). They are happy to live in a country not at war (Ukraine), or with a beggar pension (Ukrainian pension is $150 CAD/mth equivalent.
Canadians are a wealthy people but we take our wealth and security/stability for granted. $35K/yr pension without debt is not poverty. It’s a simple life yes but they live the Canadian dream. Kids all settled and doing better (it’s what they came here for), they have health care and secured income and can enjoy the fruits of their labour and our generous social security. Fancy cars and toys don’t bring happiness. Health and family closeness do. We should all be thankful we live here – warts and all.
@#137 A Quintillian Questions
“Too many of your generation claw, cheat, and deceive their way to the rat race finish line.”
+++++
You left out my personal Boomer fave’s
“backstab”, “plagiarize”, and “brag”….
All are excellent ways to reach for the top if all you care about is ….stepping on a quintillion heads to get above the smelly, unwashed, ignorant, lazy rabble.
I’ll do the volunteer thing in my next life….as a rat.
“People lacking money worry occasionally about being poor. People who have money obsess about losing it. It’s why rich people never smile.” – Garth Turner
——————————
That’s what I’m thinking about sometimes:
What is worse?
Never have much to lose.
Or losing most of what you had?
I know one person in my family who had it made and then lost everything because of greed.
He never fully recovered, financially and emotionally.
#137 Quintilian on 03.08.23 at 9:50 pm
#129 @J on 03.08.23 at 8:36 pm
I’m in my 50’s and hope to work into my 70’s, at least part-time and as long as my skills are contributing in some meaningful way. I think a negative health outcome would be the only thing stopping me. I occasionally get to mentor/teach gen Z kids and for me it’s a blast – it keeps me young and in touch.
—————
@j, thank you, thank you and thank you.
Too many of your generation claw, cheat, and deceive their way to the rat race finish line.
These sloths hold early retirement as the ultimate worthwhile pursuit, it’s so uplifting to see that there are those like you who see the value in contributing to humanity.
Awesome, Your noble legacy will live on.
—————
Cool, Q, it’s nice to be appreciated since that’s my plan as well. ‘Noble’ seems a bit excessive, but hey.
Hmmmm
First Twitter and now Facebook are “offering” the extra special “verified account” for a fee.
Seems internet advertising revenue isn’t what it cracked up to be.
Its reached saturation and starting to decline.
Whats next?
A fee for your free email account?
You heard it here first.
#102 Faron on 03.08.23 at 6:30 pm
#76 4 out of 3 people find math hard on 03.08.23 at 4:10 pm
The only verifiable data on Tesla’s shows that driving using their automation increases risk by 11%. It’s more dangerous to drive a Tesla with automation than without no matter what you or James or anyone else claim. That’s one of the reasons it’s been recalled! Their tech is L2 and has no path to L5 because the model it’s built on is broken.
LOL. Building the robotaxis. Baaaahahahahahaaaaa ha
Jeezus buddy, go find another windmill, preferably one far far away
#123 Sail Away on 03.08.23 at 8:13 pm
#120 crowdedelevatorfartz on 03.08.23 at 7:52 pm
Your argument is tantamount to arguing that murderers who kill one person are a okay because genocide happens.
Slowly. Backing. Away. From the crazies who don’t understand. Well. Much at all.
Chrism Oil……
https://www.youtube.com/watch?v=keawBNtB8BE
#145 Faron on 03.08.23 at 11:20 pm
#123 Sail Away on 03.08.23 at 8:13 pm
#120 crowdedelevatorfartz on 03.08.23 at 7:52 pm
Your argument is tantamount to arguing that murderers who kill one person are a okay because genocide happens.
Slowly. Backing. Away. From the crazies who don’t understand. Well. Much at all.
—————
You may be right. Probably best not to argue about it.
Re Faron 145 and , well all of them really:
Faron, get help. You are one sick karen.
102 Faron: Congratulation Faron, what you lack in facts and credibility ,you make up for in seeking attention and providing entertainment value.
Active #111
I find your comment sad. So sad.
You have my sympathy because your life must be so shallow and empty.
Garth, you’re a gentleman.
Thank you
Retirement is a relatively new concept which appeared in the 19th and 20th century. Before that people were working their entire lives.
So things will probably go back close to where they were before retirement and pensions were invented. Most people will have to work into their 80s and 90s to survive, like they used to 200 years ago.
#128 VicPaul on 03.08.23 at 8:34 pm
There are degrees of ‘freedom’ and many do not align with excessive predatory lending.
What we have currently is clearly massive failure of regulators.
If we have number of idiots who are willing on to take intergenerational/100 years/interest only mortgages,
and ‘insured’ lenders do give them that loan as they are risk free, that implies that everyone else should play by the same rules i.e. it is behavior modeling.
In addition if you have CB that do not follow their mandate but are politically driven to keep interest rates at zero, that adds fuel to the fire.
But most importantly, both CB actions and mortgage ‘insurance’ is not a free market.
So talking about freedom in manipulated markets does not make any sense.
Ladies and Gentlemen, the BoC has left the building..
The effect of falling behind the US in interest rates hikes could be catastrophic for the Canadian dollar. Case in point, our dollar is already dropping like a rock.
Few will be renewing their Federal or Provincial bonds, for less than what Uncle Sam is determined to pay.
So with everyone selling Canadian dollars from here on in. We’ll be lucky if there are any buyers.
And the “news release” flooding Canadian media of late? That the Canadian dollar will “rebound” late in 2023?
I don’t see one shred of empirical evidence to back it up. It appears to be nothing but a “goodwill gesture”.
And BTW… what will “pausing” the rate hikes mean to the sovereign wealth funds who like to run venerable currencies to ground using their high powered cash backed automatic weapons?
Will they see an entire herd of stumbling, bleeding, dazed Canadian dollars, falling behind the big US herd, unable to catch up… stumble into their sights.
Am I wrong? Is my logic flawed?
“George is starting to get worried here!!!”
Regards,
John Doe
Whenever the topic of inadequate retirement savings pops up, I wonder if the elimination of mandatory retirement at 65 factors into things.
#97 ‘Penny’ – very few people get maximum CPP. For sure you won’t get the maximum if you start it at age 60 – early CPP comes with a 36% haircut. As for OAS, it isn’t even $700 per month though it might get there sometime in 2023. That would amount to $8,400 per annum. Yes, it gets COLA but inflation would have to be epic to have it increase to $16K in only 7 years. Also, OAS isn’t funded by payroll deductions the way CPP is. Could be that if it were going up that much that the government might cap or limit the amount being paid out. It would be easy for government to reduce the income ceiling before OAS was clawed back.
141
Stay the course , steady as she goes. Sometimes doing nothing is good advice. Cash now produces a risk free return. I don’t chase Alpha because I don’t need too and prefer to smile.
A “decumulation calculator”? Haha, that’s funny. You left out one other sector that has DB pension and that’s the building trades. Want a retirement plan that actually works? Get off your ass and get to work for 44 years and retire. Easy peasy.
No financial advisors were injured during this blog post.
Interesting stats on pensions plans at work; shocked and scary how low it is actually.
I just turned 40 and my husband will too in a month. Paid off home in Toronto and around $850k in investments. Zero financial help from family/friends etc. We earn good money but spend even les than the avg family is my guess at <$4k a month.
I heard the first $1M invested is the hardest and it feels like it. Current projections get us to $4.7M at retirement.
Planning retire at age 56 with my DB Pension. Will have more than we need at our current rate of savings and have no children (a huge plus financially). I'm assuming no GIS and full OAS clawback. Our biggest expense is travel.
When we croak most will go to charity or any deserving relatives.
The system is set up to the advantage of Bankers.
Why I know a variable holder whose mort-gage payments doubled over the year.
In Soviet Kanada House Own You
“The Globe and Mail reports in its Thursday, March 9, edition that the Office of the Superintendent of Financial Institutions has launched a formal review of cash exchange traded funds….. Cash ETFs are able to pay higher rates because select banks offer them access to wholesale funding — that is, the banks pay the funds premium interest rates they would normally reserve for institutional clients. Similar rates would be available to rich people with millions to invest. This access has rankled some banks, because ETFs that offer premium rates to retail clients are likely to lure away customers from banks, hitting that sector’s profits. If the OSFI takes issue with cash ETFs, it could order changes that would lower the interest rates retail clients earn. …. Both banks have blocked access to these funds on their on-line investing platforms.
© 2023 Canjex Publishing Ltd. All rights reserved”.
Teslas are the new Ford Pinto. Bump em and stand back.
https://www.cp24.com/news/driver-arrested-after-tesla-crashes-and-bursts-into-flames-in-downtown-toronto-1.6300483
According to police, the driver lost control of the vehicle and it collided with the curb.
Images from the scene showed the Tesla going up in flames as firefighters rush to douse it.
—So…you think you wil hold out with your affordable gas car and freedom? You will have a range-limited, expensive, remote-controllable electric car. You are free to leave the Smart City at any time Comrade.
https://www.rte.ie/news/2023/0223/1358479-ethanol-petrol/
The plant-based ethanol content of all petrol sold in Ireland is to be doubled from 5% to 10% from the start of April after the required legislation was passed by the Dáil yesterday.
The target of doubling the blend proportion of ethanol in petrol is included in the Climate Action Plan as part of the measures to achieve a 51% reduction in carbon emissions by 2030.
This is likely to pose problems for some older models of cars, classic vehicles, some smaller mopeds with an engine size of 50CC or under, as well as certain gardening, marine, or aviation equipment engines and generators.
——- Year 4. Alllmost back to normal in Kanada. Electronic Lockdowns for these folks.
https://www.aptnnews.ca/national-news/unvaccinated-athletes-getting-notice-they-cant-compete-at-indigenous-games/
Unvaccinated athletes getting notice they can’t compete at Indigenous games. NAIG says Mi’kmaw elders aren’t comfortable with having unvaccinated visitors. By Chris Stewart Mar 06, 2023
@#145 Faron
“Your argument is tantamount to arguing that murderers who kill one person are a okay because genocide happens.”
++++
Nice segway.
I expected nothing less from our resident hyperventilator…
And your argument is distracted driving deaths are ok because “all self driving cars are bad”.
Ok, here’s my segway.
Distracted drivers have the reaction time similar to drunk drivers.
https://injured.ca/is-texting-and-driving-more-dangerous-than-drinking-and-driving/#:~:text=Statistically%20speaking%2C%20drinking%20and%20driving,of%20time%2C%20cases%20of%20distracted
So, in your world……Drunk driving is ok….as long as they drive the car and not a computer?
I’ll take a self driving car in front of me over a texting driver every day of the week.
PS.
March is Distracted Driving month in BC .
$368 fine.
Its a huge problem and its getting worse.
Tesla is here to help because Elon cares.
Musk for the Nobel Prize.
Just watching the BC government codify certain political views into legislation to appease a tiny but extremely politically powerful group of people while certain NHL teams are getting roasted alive for refusing to bend the knee to these same political forces.
Trudeau the Elder made the observation decades ago when he said : “The government has no place in the bedrooms of the nation.”
And the converse is also true: The bedrooms of the nation have no place in the halls of government. Or the hockey arenas. Or the schools. Or the swimming pools. Or the libraries.
What began as a noble movement for equlity, tolerance and acceptance is morphing into something that it’s founders would have opposed.
But that’s just human nature. Political power, once achieved, is never willingly relinquished even once it’s goals have been realized.
The Trudeau govt has spent more money per capita each year of the last five years than any other govt in history.
$19,000 for every man, woman and child….
I dont feel any richer….do you?
And we also have the added bonus of the CBC giving (on average) $14,000 in performance bonuses to all 6234 employees at “The Corpse”
https://nationalpost.com/news/canada/cbc-employees-paid-16-million-bonuses-2022
gee, if interest rates keep climbing….and we fall into a recession…..how are the Libs going to pay for all this?
higher taxes?
#155 Linda on 03.09.23 at 5:46 am
#97 ‘Penny’ – very few people get maximum CPP. For sure you won’t get the maximum if you start it at age 60 – early CPP comes with a 36% haircut////////////
To clarify those amounts are for my wife and I combined. Sorry for any confusion.
#155 Linda on 03.09.23 at 5:46 am
#97 ‘Penny’ – very few people get maximum CPP. For sure you won’t get the maximum if you start it at age 60 – early CPP comes with a 36% haircut. As for OAS, it isn’t even $700 per month though it might get there sometime in 2023. That would amount to $8,400 per annum.
//////////////////
I should have mentioned that those numbers were for my wife and I combined.
Sorry for the confusion.
Hmm – Garth did you see this?
https://globalnews.ca/news/9538708/credit-card-debt-canada-equifax/
Credit card debt shot up in Q4 , 15% higher than the previous quarter.
A red flag…..
#3 Chris on 03.08.23 at 11:00 am
Sad to think that $1.7MM is top few %, if not top 1%.
I’m 51, wife is late 40s and our net worth is about $3MM. I don’t feel like a Top few % person. I feel we are in good shape financially, however I don’t feel there is much wiggle room for unexpected expenses.
——————————————————————
51 with 3 million and no wiggle room. Whoa!
Well look on the bright side. Hardly a day goes by that we don’t hear about this ongoing labour shortage. If a lot of older people can’t afford to retire, they’ll keep working or go back to work. Problem solved.
@Ponzius Pilatus, post #130:
You’re quite right about electric vehicles. They solve nothing and just add to more traffic congestion and urban sprawl. I also wonder how the power grid will handle all that excess load. Some people get it, while politicians like Doug Ford believe in keeping the old broken status quo.
#55 Franco
#68 Iona Castle
#73 Tbone
Why retire?
——————————————————————————————————–
Because I can.
Because I want to.
Because the perspectives provided by Iona Castle and tbone are both valid – that retirement does not mean sitting on the couch and watching TV all day, and sometimes work circumstances become so ridiculously untenable that pulling the plug before it’s too late is the smart thing to do.
Garth is obviously correct pointing out that most folks these days are totally euchred when it comes to the prospect of retiring. They will literally work themselves into the grave. No retirement golden years for them.
Unfortunate.
However, many people will be prepared. Some by luck, others by lifelong diligence through hard work, education, skills development, discipline, careful planning, persistence, saving, and investing.
All these attributes – plus luck – combine to set one up to retire comfortably at a reasonable age.
If that’s what they want to do. Some don’t. Some love their work, and some find their only purpose in life through work. That’s fine. To each his own.
Most poor slobs, however, are grinding it out in abject misery. They hate their jobs, their bosses, their colleagues, their work environments, and the drudgery.
Their misery over time turns them into drug addicts, alcoholics, and spendaholics. Debt addicts who blow their brains out on the frivolous consumption of goods and services to satisfy their craving for immediate gratification to offset the dismal pain of their pathetic hopeless existence. The despair of being tied to their despised job for ever and ever. Purgatory on earth.
They would LOVE to retire, but they can’t.
Anyway, it’s late and I gotta hit that mountain. Another glorious day at Kicking Horse in beautiful (but shabby and lefty) British Columbia.
“Assuming a 5% annual rate of return on investments and an equal level of inflation, $330,000 in wealth would provide an annual income of $15,000 for 22 years, before being exhausted.”
Not that this changes the takeaway but… when did we start assuming 5% ROR and 5% inflation? I know the past year has seen high inflation, and bupkes returns, but Garth’s been talking about 7-8% annual average returns for a B&D portfolio, and the historical/target inflation rate is in the 2%-3% range.
Have our long-term assumptions changed that radically? I’ve been planning on the basis of 7% a year nominal growth and 2% inflation, so 5% real growth/year.
Today the penguins’ bank fell on the stock market by more than 4%. I took the opportunity to increase my position in the stock. But later while having a Scotch, I started to doubt my decision. But its dividend is too attractive to ignore!
I find it a bit crazy, that Canadian housing market is one of the most expensive, and yet, it has one of the worst health care system in the Western world. Waiting, waiting, waiting…. is the health care game in Canada. Not worth it to buy expensive house, and suffer pain for months.
As a retiree, I can tell you, it all depends what are your expectations, and how you planned your retirement.
Most so called ‘ experts’ make people fall of their rockers scaring them they will be old, and under the bridge. Not so! Save all of your life, and live simple life. I don’t mean-going hungry.
Concerning real estate. Is it going up, or down. I don’t care. My calculator is going to direct my decision. If people choose to buy and become house slaves, that’s up to them. I rather invest the money, and live from it.
Have opportunity to move, if I don’t like the place or Landlord. Enough cash return from my investments.
#94 ‘Jim’ – if any couple visiting this blog actually is in the situation of receiving CPP/OAS/GIS they might be able to clarify what the combined pensions will pay. I did look at the canada.ca website. Depending on who receives what in a couple situation the combined annual gross income of said couple must be below certain amounts to get GIS. That ranges from a low of $27,552 to a high of $49K. That last is if one of the partners does not receive OAS. Insofar as I can make out, the GIS payment situation is monitored & payments are adjusted depending on what the annual income is. For instance there was a media report about a man who was upset that his GIS benefit was suspended. It was suspended because he had applied for & received the CERB benefit during Covid, which increased his income enough to exceed the income criteria for receiving GIS. He had not understood that he couldn’t get both benefits ‘in full’. Obviously once his CERB ended & his income reverted to its previous qualifying levels his GIS benefit would resume, although he might have to notify the government to ensure it kicked in on a timely basis.
Anyway, it appears that it is possible that a couple could receive as much as $39K per annum. Doesn’t mean they will actually get that much, but it is possible.
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