The Average Income Of Retirees (and what they spend it on)
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- Опубліковано 18 тра 2024
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In this video we'll go through what the average retirement income is, and where you will spend that money.
If you have any further questions about this video's topic or any financial planning questions in general, I encourage you to find a certified financial planner in your area or book a consultation with us to get your retirement plan on track. You can learn more about our services at www.parallelwealth.com/planning
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OUTLINE
0:00 - Intro
0:40 - Inflation
2:26 - Average Income
5:40 - Budget Allocation
9:36 - Income Sources
This presentation is intended for information purposes only and does not constitute an offer to buy or sell our products or services nor is it intended as investment and/or financial advice on any subject matter. Every effort has been made to ensure the accuracy of its contents. Certain of the statements made may contain forward-looking statements, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Returns are not guaranteed and past performance may not be repeated.
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DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations - those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades.
We married in ‘69 and began saving 1/4 of our mutual income. Investing in our first modest townhome, we prioritized paying down our mortgage which a couple of decades later really paid off with a significant job loss.
Much later in ‘98, I told our real estate agent in our new location that we wanted to “live in our piggy bank”. Thus we purchased a “dump” (according to my sister) instead of a regal stone house downtown. However, our now much-renovated, very comfortable house is extremely valuable due to its waterfront location, much more than the showy stone houses. Might I mention that it’s also mortgage-free…
Although not necessary, we live totally on our pension & Canada pension income. Last year we took our two offspring, plus wives and g-kids, to the French Alps for over a wonderful week.
You must decide what’s important to you early in life - we chose substance over “show”!
how is the weather?
@@shirtlesslager 😆
we lived for about a year on our retirement budget for a trial run...kept notes/month and adjusted as needed.
Omg - what an amazing idea - thanks for that post. We’re retiring in 2025 - we’ll try that spending strategy next year! Merry Christmas 🎄
We aren't retired as yet but we have a fixed, annual budget that breaks down to monthly expenses. Whatever we don't spend each month is reserved for later months. At the end of the year we re-evaluate the budget and make adjustments if needed. We like to start each year with a little over 1 month of expenses in the account.
We are doing the same. We are in the 12 month countdown to retirement, so we are living like we are already retired. Financially speaking.
Cpp and oas should not be taxed. At least for most retired people. This is something that could help so many seniors at least somewhat enjoy their retirement. Not many are so fortunate to have saved over a million like some previous posted stated they have. Good for you, you’ve done well but the large majority don’t even have anything close to a million plus saved. Let’s be realistic
People living on only CPP/OAS/GIS don't really pay income taxes. The various benefits received equal or exceed any taxes paid out. Those entitlements are too small I grant you, but you do, in net, keep all of them.
As a couple, we’re into the 100K income in retirement. Zero debts, own a house and a condo as our secondary residence. Yet we still follow a monthly budget. Always have and always will. IMO, it’s not only about how much you ultimately have in retirement, but how predictable and realistic it can be to live out your 3 retirement phases with what you actually have in hand.
One of your best videos Adam. Thank you I really enjoyed it.
Thanks for this video Adam, very helpful and useful. I’ll be doing some calculating
Thanks for another helpful video Adam. The silos of income sources is a challenge to get a handle on. Always appreciate seeing your models of varied withdrawal strategies with resultant tax implications.
Retiring next year and Adam I very much appreciate you and your team's videos. An interesting perspective on how much income you need in retirement.
I think the downsizing from 2 cars to 1 car is sensible and something my wife and I will discuss. Apart from Uber (not an option where we live - taxi), for slightly longer car trips renting a car (need a pickup only occasionally?) is also an option vs owning the 2nd car 'just in case'.
My bank provides a very useful monthly summary of our household spending (all our cards and accounts with the same bank) so that quickly allowed me to build a budget showing spending for the categories you list for the last year with detail from a deep dive into statements from things like utilities and car and housing related ongoing costs. A useful short-cut likely available to many Canadians.
Love your videos.
Can you do a general info video with an RDSP and drawing it down along with saving taxes?
Thx
Great information and insights! Very useful and appreciated!
I'm approaching retirement and have found your videos very beneficial. This video is one of the most beneficial. Thanks for posting!
Thanks so much, glad they have been helpful.
I’ve just turned 60, single, debt free and have been retired for almost 3 years. I take home approx $5300/month from my pension and don’t need to touch my TFSA or RRSP. The biggest lesson I’ve learned is that what you think you’ll need for a comfortable retirement is probably way more than what you actually need. Last year I spent the winter in Ecuador. If I had a do over, I would have retired 5 years ago.
Thank you so much for this information, and confirmation! I am 53, single, and able next year at 54 years old. I am planning on jumping on that the minute I can. Is that $5300 from pension pre-tax? I will be about $6000 a month pre-tax and think that it will be sufficient to ensure a very comfortable life. I have the RRSP and TFSA too and then of course we have CPP and for me OAS in the years ahead. I value the time and health more at this point. Hope you have winter plans for this year - that will be something enjoyed by me in the years ahead. I am done with Canadian winters.
@@macdaddymgiarc it’s after tax money I have from a military pension and early CPP. I had always hoped to retire early but wouldn’t do it until I was completely debt free. For me, that was of utmost importance to allow me to enjoy retirement. I’m now currently planning to meltdown the RRSP as fast as I can in the most efficient manner and growing the TFSA and non-registered accounts. I did have a financial planner for many years helping me sort this out. If the numbers work, do it. Doubtful you’ll regret it. I estimate I spend about $3k or less a month on everything but I do have solar panels (minimal utilities) and a Tesla (minimal to no fuel or maintenance) and that helps.
@@Hotdog_Water I really do appreciate the reply and the extra information! I have worked in education all my life so when I am pension eligible in a year, I will make the move. My financial planner things that my planning and saving to date along with the pension make me one of the lucky ones. I will do the RRSP meltdown too to supplement the income until it is CPP/OAS time and try and live my best life. I am a traveler and see active travel for as long as I am able part of the adventure ahead. Debt free is also key - completely agree! Thank you again and happy travels - stay healthy! Craig..
I am very blessed on retired two yrs ago ago 50 with 60% Miltary Pension living in Puerto Vallarta Mexico 🇲🇽 with no debt. I have TFSA maxed out over the years along with RRSPs. My better have she works with Mexican Federal Government and retiring in 3yrs age age of 49 with take home of $4,300 Canadian. We are building house now that's going to cost $550,000 Canadian which is going to be very nice and comfortable house. We are both very lucky both Pensions are indexe to cost of living. We spoke two nights ago and our goal is when she retires. Still stay debt free no car loans, her son in second year medical school and daughter going to dental school to have NO STUDENT loans and give each $10,000 Canadian for there first house when they are ready.
I am so bleeding I stick it out with Canadian Miltary for 30yrs buying my first house at age 25. Never been married and no children but Anahi and her family brings me peace now. Advice make goals and make plan and reach for them it's well worth it. This is coming from a grade 12 high graduate 🎓.
@@charlesking8033lucky military getting early retirement with public funds versus us, simply employees living at the mercy of greedy corporations; what war have we recently won for the military to deserve such privilege; what county invasion has been prevented that I might not be aware of?
Adam, you're spot on about the complexities of retirement income and taxes. Without any government pensions, we're already at nine sources of income. In the not too distant future we'll have another six income sources (2 x (CPP+OAS+Foreign pension)), albeit by then we plan to have exhausted our RIFFs and the equivalent from overseas.
We want to have $120k/y in today’s money when we retire 11 years from now at 55, lasting us til 95. I’ve calculated this at needing around $3.5M come R day, and so far it looks like we’re on track to make it. The amount of our income we put away each year without batting an eye, while we live in a modest home, drive a modest car, and take modest vacations would probably not fly with most people. But I’d rather retire early and comfortably and know everything in life is taken care of til the end than splash out today just because we can.
well done. I think deciding how to split your income between consumption now and saving for retirement in the future is the real challenge driven by uncertainty about life expectancy. Two unfortunate possibilities are live modesty now and have a large savings for retirement but unexpectedly die early, and vice versa live lavishly now and live a long time in poverty in retirement. We can use averages and statistics but they will not be accurate for anyone specific person. In real terms it comes down to personal preference and luck.
This is what governments today are faced with in funding retirement benefits. People retiring early, and living longer. Living off of your savings is one thing, but if CPP/OAS have to last longer, the government has to increase the deductions of current employees/employers to fund it (the ponzi scheme). Harper had intended to increase the age at taking CPP to 67, but Trudeau backed off that plan
Really enjoy the knowledge and videos.
Thanks for watching!
As a CFP on the other side of the country, just wanted to say thanks for putting out good info. You guys do a good job. Cheers.
Thanks for that!
Another great video ! this is such great free content, I hope people are taking advantage of it.
Thanks Ron!
You are good man and thank you, Adam, once again! So much great information and I’m so grateful to you.
Could you do a video about critical illness insurance? I find it very complex and is it really worth it for seniors 65 and over to even consider it? Thank you!
Another useful video Adam it's incredible you can put these out so frequently and still provide meaningful content.
By way of a budgeting example, I'll offer that creating a very simple spreadsheet has been helpful. The only thing I capture is our credit card totals and debits each month. For now I don't worry about where it's all spent but, as the second full year of doing this wrap up, I have a very clear picture of what our monthly spend is. Maybe I should do a deeper dive into the costs to see what would be involved in join the 'average'.
Thanks Bruce - no need to be average! :)
Stats Can's most recent (2021) data says that the average total income for individuals over age 65 was $44,300/yr. Federal and provincial taxes amounted to about 25% of that, so about $33,225/yr after tax, or $2768.25/mo take-home. Most of those folks would have been retired. If yours is better than that, you're doing good. Half the population lives on less than that...
No one age 65 is paying 25% tax on 44K. They are likely paying around 10% or less and if they are paying 25% they need to hire a new planner. Even if that was employment income, they are paying about 13% tax depending on province. In 2024 an Ontario couple age 65 can make 60K and only pay about 5% tax. An individual making 60K retired would pay about 15%.
That sounds high to me. Most of my retired friends I know get between 1.8-2.5k net per month per individual.
Most jobs are losing value daily with massive layoffs, Last year I was working full time budgeting groceries, unable to afford date nights, and missing time with my kids just to make extra money. These days I learn how to make money online, Using my job to finance my goals, You can't be an employee forever everyone should know by now, making extra cashflow interest everyday or weekly should be the goal now.
Having a job doesn't mean security rather join a business trade.
ensure you add value, everyone is replaceable. I am always making sure of this to ensure my own sanity and job security.
Big ups to everyone working effortlessly trying to earn a living while building wealth even after the massive layoffs. My wife and I we are both retired with over $2 million in net worth and all paid off debts. living smart and frugal with our money, made it possible for us this early, even till now we earn passively with our asset coach.
Adapt to a lifestyle, be thrifty, set a budget, save money and build more streams.
Sadly there's actually people living paycheck to paycheck.
Fine steps! you could also take advantage of some growth stocks at the moment, every pro is currently bagging some digital dips. For me, my coach margaret ann myatt the intelligent guide has been using every opportunity to ensure I benefit, well positioned as I’m also privy to improve.
I think your advice on establishing what you spend your money on currently, is not only necessary but what an adult should do. If you have no idea what you are spending your money on, then how can you possibly figure out what you need when you retire? When I broached this subject with my sister she said, "We spend everything we bring in - period. What good would it do for me to write down every coffee or bag of chips?" When my husband and I did a budget (itemized our spending) before we retired we were shocked at what dumb things we were spending our money on. Like buying magazines off the rack, when signing up for a subscription was $15 cheaper. Or paying for TV subscription services we never used. Or how much we spent on dry cleaning our clothes - which we wouldn't need to do when we retired. It helped us enormously in determining what we would need or want when we retired.
I'm from the states, and here when it come to cable TV you're paying to watch commercials. I cut cable TV 8-years ago.
6 years before retire, great info
I've had a budget since I was 19 - I like to know what's coming in and going out and what it's being spent on.
Of how many clients are single? Would be nice to have some resources for single person, they can have as much as what the average retirement income for a couple (a household can have population of just one) do, but from tax perspective they seem to pay more taxes alone potentially leaving less net income than a couple situation.
Yep singles pay more tax which is unfortunate.
We have done quite a few videos for singles and will continue to throughout 2024.
@@ParallelWealthcan you point to these. I’m interested in watching them. Thanks
@@ScientificPlaybook what I found was there isn't much time to recover economic losses so was stressful, at first. There will be adjustments but having a good retirement planner helps. They'll help you create a plan that maxizes your income and minimizes taxes. And once your head is geared towards enjoying retirement, don't be surprized if your priorities change (meaning, you may not need as much $ to retire as you thought).
Would be good hear about the median.
Average prorated cost to fly to the US for health care not available due to rationing in Canada- 5000/month
Also from Stat's Canada; the average cpp at age 65 is $772.71/mo, and the average OAS at 65 is $707.68/mo (if you have the average total income, $44,300) and you will not receive any GIS. So for the average individual, that's $17,764.68/yr from CPP/OAS, and around $27,000 from other sources. But a lot of people don't have "other sources", so they are living on just CPP and OAS, for those people, they also get $520.01/mo from GIS, so their total now is right around $24,000/year, or $2000/mo before taxes.
If the one of spouses gets 30000 per year and other spouse gets 12000 then the 2nd spouse will not get GIS.because of joint income 42000 is cut off.
This injustice to lower income spouse.
I’m looking at the same income in retirement minus my mortgage . Defined benefit pensions are a god send
Oh my this is the $1,000,000 question, how much do we need to live on, I wonder how many people who are not yet retired don’t know how much they “need” to live on right now? It’s worth knowing that figure well before thinking of retiring. How much do we need vs how much we spend.
You mentioned in your video that it is not a good idea to manipulate your money in order to get GIS. That was something I had planned on doing. Could you do a video on that?
As a single retired individual in Canada in my mid 50s I have an annual before tax income between $54,000 and $78,000. The variance between the base and the top depends on income generation from option writing. I am debt free including owning my home. My monthly expenses based on actual expense tracking for the past 2 and a half years is $2,200. The one that you mentioned that surprised me is how much people spend on their house in retirement, unless this is an average based on home owners, people still paying a mortgage, and renters. My housing expenses average out to around $8,000 to $9,000 a year. I have not included travel in my monthly expenses but I have included such things as golfing. I made this distinction in that I take golf as a normal expense where as travel will be based on if I have money available. My income is currently coming from a LIF and RRIF, with a small amount from a TFSA. The second thing about my income is I am not actually touching the principal, I am using the income generated to make up my income.
In the US here. Ignoring the cost of Healthcare, I estimate that $3500/mo. after taxes should cover the basics for my wife and I. We'll then need to add more for travel. This assumes the house is paid off.
Thanks for all the great info and videos. The main issue I have with these types of conversations is the word "average" and how it related to YOU. How does the top 20% and bottom 20% skew the average one way or the other. While the middle 60% may be fairly similar, the overall average may not be similar. We should really look at an average for the top 20%, the average for the bottom 20% and the average for the middle 60% (or even more granular?). Then each of us could look at the appropriate average for guidance and be soooo much more accurate.
Also the difference in a retiring mortgage free vs not is huge, and not easy to adjust our individual retirement needs looking at the given averages. You say 20-30% is on housing on average. Well living mortgage free in your own house for 20 years after retirement is a huge difference to someone renting or paying a mortgage. Better more accurate data showing housing expenses for different situations would be really helpful.
Transportation should not include vacation travel, it should only be local transportation needs which everyone has to some degree. The vacation travel should be grouped with "travel/vacation" else it really is a useless number.
If the overall average is skewed by 10%, and housing/travel is off by 15% as mentioned, that is already 25% error, and not easily accounted for with the data given.
This is another place where leveraging your tax payable can assist in increasing your income to help meet budget requirements.
The terminology 'go-go years', 'slo-go' and 'no-go', is this a Canadian thing? I assume it refers to Canadians who haven't done a lot of travelling during their working years and want to make up for it after retirement. I'm still working and spend a lot of time in Europe and have never heard those terms being used there. Maybe it's because Europeans travel so much within Europe, where 'foreign' travel is easy and cheap, that there are no 'go-go years. Useful video. Thanks
In-laws used to live on < 10k in Calgary. They saved the rest for 20 years and the greedy daughter inlaw stole it all! Our fixed expenses are ~15k in Vancouver (grocery,utilities,insurance,house maint) but we spend 30-60k or more depending on what we want to do that year.
Thank you
According to my defined pension & CPP I'll be at HALF my current salary and then 2 year later at 65 when OAS kicks in it'll be about 60% of what I earned working full time. I expect to continue living my frugal lifestyle (already did all my big travel dreams, except 1). I won't tap in to my RRSP until 70 when it becomes a RRIF.
Are you looking at gross or net? Often with a DB pension + CPP % you will be substantially higher than 50%. Once retired you stop paying CPP, EI, union dues, pension contributions and taxes can be significantly lowered. These often represent 1/3 of paycheck. You might also consider using your RRSP first and delaying CPP, even a few years can make a huge difference.
I would look at moving my RRSP money into my TFSA at a tax advantaged withdrawal rate asap. Not waiting until your 70 to move to a RRIF . Do it sooner
Good advice.
I was one of those 5% that had a budget for the last 15 years while working. It is easy and really helps set you up for success. Just list what you spend. Some items are simple little recurring items like mortgage, taxes, utilities, insurance, car expenses, hair cuts, glasses etc. I used a big swag for food and entertainment. Another for hobbies. You'll never add up every food bill including starbucks, groceries and fast food. But it becomes the default shocking big number that is the missing difference between expenses and income.
But just knowing the truth about how you spend is vital to retirement planning in comfort.
Nothing really changed in retirement. Sure, commuting costs evaporated, but hobbies picked up. Covid wiped out our go go years, so we have more money than expected. But that is ok.
Knowing how you spend, it became a natural step to plan how to manage retirement income and spending. When to take RRSP to minimize taxes. Will there be claw back forced when RIF minimums force you into hirer than necessary income. Will you continue to save into TFSA (yes). What will be your net tax burden. It is all predictable and makes for a stress free retirement.
Pay off your house BEFORE you retire- Period!!!!
good video..no hype..sincere..
Appreciate that
Very relevant topic✅ and one that probably could be revisited almost once a year ✔as our economy changes. Well done for this topic Adam and team. ⭐:). Meg Prince Edward Island chiming in. Also, your youtube short clips are game changers as well. You folks are doing well to expand and grow to help so many people. Glad your grandfather 🙏 passed on some of his wisdom and that you soaked it up 👍to bring you to where you are today. 💯
You talk about people manipulating things to qualify for GIS and then it costs more later. Can you do a video on this and explain more on what your concerns are?
You bet, will add to the list for 2024
I paid off my house 15 years ago. Half my pay went to the mortgage and I lived off the other half. When the mortgage was done I did the same but put the other half into investing. I only made about $90 000 a year.
Basically I’ve been living well off half my salary for 30 years so I figure I’ve had a good practice run at living off $45 000 a year.
I have heard that donation doesn't save on net tax, just one pays less tax on the donated money. But money donated + whenever reduced tax on the amount still adds upto more money out of the pocket than money saved.
Or does the strategy involve donating enough to move down an income tax bracket and save that way?
Very interesting video and comments. So many people Watching this video appear to have huge retirement incomes, by my standards. So fortunate. But for those of us with less, there is no need to despair.
Housing expense was given as $15-20k per year. This can be drastically reduced. I own my own little apartment. $3k annually covers my housing expense. If u don’t have your own home, an option to consider is sharing a home, or even a room. In super expensive Singapore, a shared room might cost $5k or less per year.
Transportation at $7k. That’s such an indulgence! So lucky to spend so luxuriously. I live in a city. So I keep my transport cost to just $600 per year.
Anyway, I’ve been “retired” for about a year. I don’t keep any actual budget. Just not my style. I spend on auto-pilot. Meaning I tend NOT to spend. Like restaurant meals of up to $30per pax are fine. But $50 is too high, automatically. I doubt my expenses as a single person are more than $1500 per month. I don’t feel particularly deprived. I buy whatever I want.
I’ve also been on 3 vacations which are separate expenses. But I think I only spent about $1k for each of them.
I have to disagree with the GIS issue. Have friend not well off but has room in RRSP. They are better off building as much as possible into TFSA. On retirement all saving will be in TFSA so it won't effect income when taken out and they will get full GIS.
How do they qualify for full gis….As a couple they can’t make more than approx 28,000. Combined income
Living at the poverty line isn’t easy.
Grey Divorce is a huge issue here in USA. Not expected and divorced in late 60's places us in poverty. With health issues it is not possible to work again. Maintaining my home and health are priorities, travel and any leisure activites that cost money are out of the question, even food is minimal for the first time in my entire life. I am too embarrassed to go to Food Banks.
It is an unfortunate financial Stressor.
I am in my 70's and did not expect this.
Sage alert to invest in your marriage. Divorce will hurt your finances more than any ideas presented in this forum. Choose your spouse wisely and nurture the relationship for life. Failing that, plenty of potential partners waiting to become Canadian citizens through marriage in Mexico; the maple leaf is better than any dating app.
Please do not feel ashamed to go to a food bank if it is needed .They are there to help the public. I hope you go!
7:10 Healthcare Extended health is $3144/yr not including Dental. You still have to cover what the 80% doesn't cover. Once the plan has paid our $1000 in a year it goes from 80% to 100% coverage.
50 percent of retirees don't even get 1000 for single and family may be 2500. You talking only behalf of Rich Canadian retirees.
Agree many people are struggling in Canada
This point got me between the eyes: those who avoid drawing their RRSPs so they can get GIS, end up paying more income tax later than what they will ever get in GIS, because of the huge tax bill inherent in that RRSP.
We abruptly started getting a nice GIS last summer, on CRA's own initiative - we didn't ask for it. We qualify, precisely because we are not drawing on our RRSPs (I am retired two years), You have always stressed the importance of drawing down our RRSPs immediately upon retirement and delaying drawing CPP and/or OAS. I managed to delay CPP until 65, but here is yet another reason NOT to delay drawing registered funds, even if it brings us a GIS.
If you naturally qualify that is different. Some that don't try very hard to qualify
Thank you. I heard about those who are well off, and manipulate their income to get GIS, intended not for them but for those who need it. These are the people of whom you speak. @@ParallelWealth
How does one get a nice GIS income , the threshold for a couples combined income is SO low.
I was stunned when I got it, because our combined income was seemingly quite above the threshold. But as I then found out, when calculating income to see if it is low enough for the GIS, the OAS in its entirety doesn't count as income; I didn't know that. And as I still work a few hours a week, the first $5000 of employment also doesn't count as income, and neither does half of the second $5000. I didn't know that, either! Only my CPP and part of my wages count. This was based on my 2022 return, and the surprise adjustment came in July. My wife is too young for the pensions and works part time for minimum wage. @annettea3216
@@annettea3216 most people don't get GIS.
I wonder what the opinion on reverse mortgages is? They seem to be heavily advertised, and many young people are thinking that home ownership is the only way to fund their retirement. Lifelong renters end up short on retirement income.
when you,ve worked all your life and paid taxes all your life i shouldnt hav2 pay taxes when i,m retired so i dont hav2 pay taxes on the same money twice its a bloody rip off
I have had a budget since I was in college in the 1970s. That's why I am ok now.
Is 10k per month for 2 people enough when we need to adjust for Justinflation?
Adam always advises delay CPP until 70, and its true that you get a boost of 42%. But if your GO GO years wrap at 75, why would you need the extra money afterwards??? Could you not take less $$ money earlier but receive it for 10 years instead of 5..or if you took it at 60 you received it for 15 years of GO GO. . You can also do an RRSP meltdown earlier than later but in my case i have a Defined Benefit pension with a bridge until 65. An RRSP meltdown would only increase my taxes . Slow burn from all sources..pension drop at 65, CPP at 63 ( makes up my bridge drop at 65) OAS is my " free money " for trips, RRSP withdrawals and TFSA for big ticket items. Then there's cash savings. Mortgage free since 2015. 20 plus years of planning for i hope 30 years of retirement
Just because you are delaying CPP doesn't mean you have less money, just from a different bucket. Then more guaranteed later in Life- which reduces market risks.
@ParallelWealth no delaying CPP means you get more money... but since your go go years end at 75...your CPP would only help for 5 years. It all depends on what source of funds you want to use and when. Tax planning is key.
Near the end of the video, you mentioned collecting GIS. I thought this supplement was not taxable income.
You are correct, GIS is not considered taxable income.
I think most people use online banking, I went to my account and old school write down how much I spend each month to get my expenses nailed down. If you can't make a budget do this and note the things that are unnecessary and stop doing it. I hear people needing 60K a year and I just do not know why. I am single and can control what goes out better than someone with two on the account. You must cut out unnecessary waste after retiring unless you have a very reliable high income source. I read the Millionaire Next Door long ago and I think it really helped me get my finances in order at least I feel like it is.
So who has $5,000 to 7 a month after taxes when
Only around 11% of Canadians make more than $100,000 a year according to statistics Canada.
This seems like a low number, as with the rising costs of living it is becoming increasingly difficult to live off of anything lower than a six figure salary. However, income inequality is more prevalent than ever.
need to see the most recent annual requirement as our inflation has skyrocketed! plus carbon taxes moving forward.
Most of my retired friends get between 1.8 - 2.4k net per month per individual. And they look poor to me - especially the ones that are single. The ones that are single have to do some part time work. If they want to maintain a car, and go south once per year - and even that is hard living in Ontario. The ones that left Canada - are doing usually much better financially. and can afford more. Canada is expensive and you get less for what you pay. Also general standard is going down. Crazy people are everywhere cities are dirty and clogged up with traffic, bike lanes and construction. And I see young people in their 20-s and 30-s that instead of being at work - are lining up for free stuff at a foodbank. It is sad to watch Canada go down the hill. And every year looks worse. I see a lot of retirees and kids - leaving this country for Europe and the US.
If you can't hack it on cpp plus oas in can you will def not😊 make it in the usa
Is CPP and OAS taxed at source ?
I am very blessed on retired two yrs ago ago 50 with 60% Miltary Pension living in Puerto Vallarta Mexico 🇲🇽 with no debt. I have TFSA maxed out over the years along with RRSPs. My better have she works with Mexican Federal Government and retiring in 3yrs age age of 49 with take home of $4,300 Canadian. We are building house now that's going to cost $550,000 Canadian which is going to be very nice and comfortable house. We are both very lucky both Pensions are indexe to cost of living. We spoke two nights ago and our goal is when she retires. Still stay debt free no car loans, her son in second year medical school and daughter going to dental school to have NO STUDENT loans and give each $10,000 Canadian for there first house when they are ready.
I am so bleeding I stick it out with Canadian Miltary for 30yrs buying my first house at age 25. Never been married and no children but Anahi and her family brings me peace now. Advice make goals and make plan and reach for them it's well worth it. This is coming from a grade 12 high graduate 🎓.
I'm 55 and have 3.5 million currently. Hope to Double it before 62
I am 62. I have $3.56 saved. Hope to triple it by 65 !
you can't take it with you.
As a single woman with no kids, I'm reserving a good chunk for no-go years after age 75 in a quality retirement home. I don't see that in any other plans. Eg 53k after tax while in my own house, then 73k while in a rental, then 98k for nursing home. Am I missing something?
I think a-lot will sell their house which will pay for a retirement home if they need to go into one….ur right big bucks for retirement homes…and good luck getting into a long term care home…10 yr list in ontario unless u have extreme health needs then u may jump the line….sometimes
Recent stats from Ontario ministry of health show 72 days if coming from a hospital, 201 otherwise.
@@ldd9672I am not aware of such lengthy wait times. I have heard of up to a year. The challenge is the resident might be required to relocate and that can be extremely difficult.
@@davidhughes6048 that seems really high. In Ontario, the current monthly rate for private long term care is as follows:
Long-stay Private $93.32/day $2,838.49/month
I don't consider that cheap, but $34,000 / year is no where close to $80k
Another banger. I guess I’m average to average +.
Budgets by definition are very personalized. I’d starve on 10% to 15% on food. That may have been pre-pandemic.
The key takeaway of this vid is budgeting is as important pre and post retirement.
It blows my mind that people can’t or won’t do a budget. That’s a recipe for financial disaster
As my wife tells me - nothing wrong with average!! LOL
@@ParallelWealth Average PLUS 😉😉😉
For some there seems to be a real stigmatization on "budgeting". I like to refer to tracking your spend more so than budgeting. I really feel the value is in knowing your spend breakdown and the items in that spend and then categorize that spend into broad groups - one being discretionary. You can very quickly look at items in the discretionary categories to find things you could do without if you need to cut back.
It took me around 6 months to get a good estimate on how much I spend in retirement. I don't see why retiree's think they will spend less with all that extra free time. I spend a lot more in retirement.
I never hear anything about ppl who get MPP
Well you have confirmed that I won’t have enough. Impossible to have 80% of my current salary when I turn 65 in 3 years. Btw. I have saved and invested. With these numbers then I most definitely cannot afford your services as that will only cut down my retirement funds. 450 k saved and I will be poor in this country. Pathetic!!
You need to plan on 80% of what you spend not 80% of what you earn.
Get a plan, you will likely see that you can retire with that amount.
Downsize and reduce spending, are the only options. One thing that I will say is to put some money in Bitcoin, it's better to be onboard with Bitcoin, in my opinion... Lastly, buy Enbridge stock, it pays a good dividend.
With the exception of fixed costs related to actually working, try living on what you need vs living on what you have. Start that exercise well before you retire. Being retired costs so much less then working. Chin up!
I agree with others who point out you need 80% of what you spend, not 80% of your salary. Prioritizing your TFSA for the next three years could be useful with providing some tax free income in retirement.
Are those numbers net?
Yes
My friend gets 1700 a month at65 never worked or paid tax gis and oas
I have more money in retirement than when i worked. I made very good in work years. I INVESTED IN MY 401K, then move to IRA.
It's not how much you are making but how much you are spending.
$5k to $10k / year for food ???
Is that for ramen only or does it include coffee also ?
We (two of us) spend almost 800 dollars a month on food, and we are not eating steak or lobster… People spending 400 dollars per month (5k annually) must enjoy beans, rice and then more beans (maybe a can of tuna now and then). 21 meals per week for 1 person at $100 per week, is about $5 per meal - I guess it’s doable… No restaurant outings, that’s for sure.
I guess it also depends how you shop. Here we are three (young adult still at home) and we have bought, on average, 7500$ per year. We don’t eat rice, beans and thin air.😂
We are spending right at the 15% level of our monthly expenses on food. We pretty much eat whatever it is we want to purchase however do watch for sales and stock up on those items during sales --- things like meat (prime rib roasts / steaks etc) and non-perishable supplies like facial tissue, toilet paper, paper towels etc.
@@BL-jo8nm😂 and stay away from Loblaws 🤣
I generally think $250 per week for food for a couple is plenty and works out to about $13k / year. I suspect out actual spend will be below that.
Oh boy 😞
I've been retired for 18 years and I can say without doing any calculations that my biggest expense in retirement is income tax! I send CRA ~ $10k every quarter and then again in April. Last year the total was > $48k. That dwarfs any other expense we have.
Wow, you must be making a lot more money in retirement than
the majority. Perhaps a nice problem to have, just saying.
@@Northern_Squirrelmost definitely a great problem to have. $48k in taxes is from significant income.
Communism is expensive..........lol
Can you do any income splitting? INcome tax can be a huge expense, as was the case when my father passed and my mother's income went way up the following year (all "safe" non registered interest bearing investments).
@@maxineporter8848 I split my income with my wife to place her income at the OAS clawback threshold number. ($86,912 for 2023). My OAS is completely eliminated.
You need to include median. The multi billionaires are skewing your data
How does a couple get any GIS ? I mean you have to have a combined income of below approx 28,000
Good grief
Yes, for very very low income situation
Actually the range is between 21k and 51k depending on circumstances. Some with 1M+ RRSP's get GIS
$5000-$7000 ???
I think most Canadians don’t speed that now, working
$5000per month maybe, 75%of $5000 is $3750per month for most Canadians
Most people are not making that much money, even with both parents working
If you are paying for a mortgage when retireing, you better keep working!!! I make way less than your statistics, and am single. Home is paid off. You may need less than you think!
Moving up in house is not a good idea when you are age 50 or above. Stay in the starter home. I see elderly friends who can remain in their homes because of staying in their 800 - 1,200 sq. foot home. I see others who moved up and up and now are 1 step away from homeless. Good luck to us all! 😊
Wath avrig is cpp wath obaut pople from tim hortons end mcdonald wath yu taking obaut
dude learn to speel.
I know a few elderly people. They spend more money in retirement than they did before the retirement. Mostly in taxi and car services, medicine, comfortable clothes.
"If you have 2 cars maybe consider going down to one and using Uber," such North American perspective.. no mention of even the possibility of transit or biking 😂😂
I live an hour outside Vancouver. I'm giving my perspective...transit and biking is not an option!! Lol. Not sure it's great anywhere in Canada.
@ParallelWealth there are plenty of walkable places in the country. I have a tiny car that I have barely used over 10 years and bike/walk/bus mostly. Just saying that the numbers for transport in this video are pretty wild from my pov.
@joecunningham6939 come move to Langley and you will get it!!
@@ParallelWealth oh I get it just fine. I am just saying that the assumption that people have no choice but to spend 10s of thousands on vehicle ownership in retirement is not always true and something you can control if you're willing to move.
Invest early, invest often, stay invested. Buy a good cross section of an economy and you should do well over the long term. The market will be high in 10 to 20 years, and significantly higher in 30. It's almost impossible for a company with no debt to go bankrupt. Canada is about 3% of the global marketplace, U.S. is about 50%, remainder on the globe is 47%. Pay yourself first. It's time in the market, not timing the market. i stay untop of the market with my FA jenny pamogas canaya. Bulls and bears make money, but pigs get slaughtered. - some wise words -.......
Thank you; reading this was well worth the time since investors tend to put off making decisions due to regret. This may result in inertia, when people hoard money instead of investing it out of concern that they won't make the right choice......
I used to think like this when it came to taking risks, but then I found jenny pamogas canaya, who manages my portfolio so I can stay Anchoring is the tendency for people to become fixated on particular values or prices-typically the asset's purchase price-and use it as a benchmark for decisions they make in the future.........
That's intriguing; I'll look her up and provide input because she sounds like a pretty interesting person......
Whoa, awesome 2023 performance. Congratulations! Smash through those Wall Street doors........
ooks
I really don't see how one can survive with 5k to 10k on food, per year with the food prices of 2023-2024. That's very very erronated! You would really need something starting from 12k to 15k as a minimum; if you try to survive on 5k to 10k that means you would essentially eat very low quality and low nutrients products, which will shorten your life real quick... Please be objective and coordinate the numbers with the reality of the Canadian market.
I survive well on $150 a month in food, taking advantage of sales to stock up, pasta 2 nights a week. Lots of fruit, veggies, exercise as well. I retired at 60 and live on $24000 a year which includes 2.5 months in Cuba per year.....
you don't have, you don't spend, that's simple..😏😏
I am very blessed on retired two yrs ago ago 50 with 60% Miltary Pension living in Puerto Vallarta Mexico 🇲🇽 with no debt. I have TFSA maxed out over the years along with RRSPs. My better have she works with Mexican Federal Government and retiring in 3yrs age age of 49 with take home of $4,300 Canadian. We are building house now that's going to cost $550,000 Canadian which is going to be very nice and comfortable house. We are both very lucky both Pensions are indexe to cost of living. We spoke two nights ago and our goal is when she retires. Still stay debt free no car loans, her son in second year medical school and daughter going to dental school to have NO STUDENT loans and give each $10,000 Canadian for there first house when they are ready.
I am so bleeding I stick it out with Canadian Miltary for 30yrs buying my first house at age 25. Never been married and no children but Anahi and her family brings me peace now. Advice make goals and make plan and reach for them it's well worth it. This is coming from a grade 12 high graduate 🎓.