I'm 55 With $800,000 Saved, When Can I Retire?
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- Опубліковано 13 чер 2024
- In this video, we'll go through a client case study of a 55 year-old single person with $800,000 saved up. We'll look at how much longer they need to work, and some strategies that will allow them to retire earlier than expected.
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OUTLINE
0:00 - Intro
0:27 - Base Plan
1:51 - Delay Retirement
2:36 - Delay CPP
4:38 - Ladder Income Strategy
5:54 - Where Most People Go Wrong
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.
I was this guy and I was sweating it too. I actually ended up retiring at 61. I would say when it comes down to it most people have a hard time walking away from what they've been doing for the last 40 years and I did too. Over those 6 years from 55 to 61 when I retired, I kept on contributing to my RRSP and my savings also continued to grow so that only improved things. My wife and I retired at the same time (we are the same age) and pushed off our CPP & OAS to age 70. A little over 9 years in and life couldn't be better. He will be fine.
Could you have retired at 55? I'm aiming for that.
@@JB50713 How can I know? Age 60 was my penciled in date and as I said 61 was when I pulled the trigger.
I was almost downsized out of my job at 56 but I didn't feel ready and took another position within the company. Personally I felt that if I had stopped work at 56 we would have had to sell our house to downsize and my wife would have needed to continue working. But that didn't happen so who knows what could have been? Either way we are happy with what we did.
@@JB50713 retired at 54. 60% defined benefit pension
@@garth217you need to tell @JB50713 the entire story - ie PT job then to age 60 after retiring from FT position ...
@@JB50713 I did it at 54
Thank you for another concrete example and including the different scenarios. This is practical application of the principles you teach is gold!
Good analysis!
Your content is always top-notch.
Thank you!
Another great video thanks
Thanks!
Sounds close to my situation. I've got double at 53, but a family of 4 I essentially have to retire for.
I retired at 55, divested my assets to a TFSA, RRSP and cash account and live off the income and dividends comfortably over seas travelling 4-5 months a year on a budget. My portfolio has returned over 8% after expenses annually and has grown to over a million dollars. Life is good. With care and planning anyone in a similar situation can comfortably retire today.
Exactly! Same here. Good job!
Q1: What did you retire with? Q2: How old are you now?
Congrats, you're living the dream!
@@JustinFH , Thank you. I came as an immigrant in my early 20’s. Started saving and investing in real estate in my mid 30’s. I retired at 60, totally debt free.
I didn’t invest in RRSP’s but in real estate building a nice portfolio of income properties, some of which I sold near retirement and some still form part of my retirement income which comprises of a defined pensions during my career, CPP, OAS, TFSA and other investments.
I am 71 now with a very healthy nest egg that will keep me worry free of financial issues.
Hi,
Love your videos. When you do you plans involving couples, you seem to assume they are similar in age. Have you ever done a video about things to avoid/look out for when couples have a larger age difference between them? For example, I am 8 years older than my spouse but we want to retire at the same time. I would love to see you walk through a plan like that.
Keep up the great work.
Just did a plan for 25 year age gap. We see it all and can plan accordingly
Depending where he lives or could eventually move, a reasonable downsizing at around 70 could even get him up to $200,000 of net cash to make it through the later years.
Delaying CPP and OAS will require using savings/RRSP's early on to live off and then more so CPP and OAS later on. It all sounds good until one spouse dies. The survivor is entitled to 60% of spouses CPP up to their max, which could be 0 if they are already at max. OAS stops. On top of that, if the deceased had great medical benefits from work, those may disappear as well. That leaves very little to live on if one has used up much of their savings. That rainy day will mostly likely come eventually and relying on gov't payments may not be a wise idea.
In this example Mr UA-cam was single.....
with 800k (and assuming 4% interest) in savings and living a modest life, that amount will last 35 yrs (until age 90) drawing ~43k per annum. If you include cpp, oas , rrsp etc...55k to 70k per annum is a possibility. Go for it and enjoy life.
With 22% of Americans lacking retirement savings, I'm seeking advice on growing my depleted $120k.
Evaluate actions harming your finances, like carrying over credit card debt monthly.
Take small steps; any progress beats inaction.
Create a budget with a financial advisor for effective income and expense management.
The decision on when to pick an Adviser is a very personal one. I take guidance from ‘Monica Mary Strigle‘ to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
All in a Bitcoin ETF. Some volatility yes, but with any time horizon over 4 years, nothing else comes close on a compound annual growth rate basis.
I plan on retiring at 63 but I started collecting my CPP at 62. My defined pension will kick in December 1st. I'm still contributing to my CPP while I'm working one more year. I'm going to collect my OAS when I turn I turn 65. I may or may not take a part time job later. No regrets.
Tax rate 17% in BC. Its about 20% in Ontario
I just looked at EY Accounting tax calculator - on $100K income average tax in BC is 20.98% and ON is 21.66% - on $75K BC avg is 18.43% and ON at 18.76%. These are 2024 personal tax calculator rates but not that big of a difference when looking at Ernst & Young site.
About 10 years ago.
Another great video. I noticed that the recent planning screens looked a bit different than the ones from your videos in 2021/2022. Have you guys always been using Snap Projections solution (and this is simply an upgraded version/interface), or did you switch over from an in-house developed spreadsheet or other product.....just curious :-)
Always Snap - just updates from their end.
I started investing in real estate in my mid 30’s. Built a nice portfolio of 5 income properties. I knew CPP and OAS would never be enough for retirement.
I sold my free and clear principle residence and made one of my income property as my principal property. Repeated that for next 2 properties and cashed in till 60. Still have 2 rental income properties, my defined pension and very healthy TFSA accounts.
Avoided RRSP like the plague. Now I don’t have to worry about RIF, LIF and all the BS that goes with it. Cash is king!
Didn’t need any financial advisor, just used common sense and living a very comfortable retirement.
I came as an immigrant with nothing in my pockets, but hard work, good education with a solid career with smart savings and investing did the job.
If a simpleton like me could do it, so can anyone else. Just need to be disciplined and don’t throw money at useless things.
Congratulations.
key thing there is my defined pension.
@@garmin1488 , true but it only makes part of my retirement income. Funny thing, I’ve got more money in retirement than while working because most of my debts like personal mortgages, car payments, personal loans don’t exist anymore.
@@garmin1488I agree, I was military my wife was a nurse. Decent pensions but not rich by any stretch. RRSPs were basically a tax break for me with the idea of topping up my income later. A job with a pension at the end relieves a lot of stress.
I have saved a fair amount but have no home and my pension and cpp are shite.
If you live to be 90 good for you. Factor in mass inflation of goods and services. Well let me tell you. Your annual or quarterly dividends will not keep pace. RRSP etc are tax deferrals " dont pay now, but pay later on in life when you retire". So many unknown variables by having a 25 year retirement plan. The old saying that schools dont teach you about money is SO TRUE. Banks and government are the ones that tell you RRSP TFSA etc is the way to go. Of course its the way to go as you keep lining the pockets of the elite corporations. DYOR not financial advice, but skepticism
But doesn't he get penalized for not contributing to his CPP after 60? I want to retire at 59 and I can wait until 70, but I was told my CPP could decrease if I stop contributing to CPP.
Depends how many years you have contributed. You should sign up to Service Canada and find out your estimated CPP payments. They tell you for age 60 ,65 an 70. You can also see what CPP shows for your employment records.
When you do plans like this and are looking at scenario's of when to take CPP/OAS do you run simulations? Sequence of return risk could be a giant factor here. A bad market sometime within the first 10 years of retirement when they are relying 100% on their nest egg feels like a scary proposition to me. I'm going to need to make this decision as well as I plan to retire at 60 or 61 but possibly delay CPP/OAS to 70.
In this scenario, the rates of return on investment can be seen in the screen shot at 0:39 second mark. The numbers used were 1% for cash, 3% for fixed income and 7% for equities averaging out to total return of 5% on a 50/50 fixed income/equity split for all investment types (RRSP, TFSA & LIRA). I don't believe snap projections will run things like Monte Carlo simulations but to see impact of various ROR you could run the same scenario changing only the ROI rate to get a better idea on the effect of low ROI rates. Another potential issue you may see is the software uses the same ROI rates throughout the total timeline (no variances so SnapProjections is averaging out the highs and the lows over the years to get to the average 5% ROR).
Although I'm not sure this is uncommon with any of the big financial planning software programs (Razor, Conquest or Snap Projections) out there as they are not statistical analysis tools. If you wanted this kind of analysis I believe you would have to go to an actuary to do the calculations for you, which might be considerably more expensive than from a financial planner...
@@DoneByD Thanks for the reply. I couldn't really see that detail on my screen but it makes sense.
Hi @@mozerm you're welcome... I noticed the screen was hard to read as well so I change to full screen view and it came in very clear. Just kind of lucked out trying full screen view as I was having a hard time reading the numbers for my first reply. This is the first time I tried that view as normally just watch in the UA-cam smaller window view.
@@DoneByD 5% with 2%inflation is done on all their videos.
People who just planned on living on CPP and OAS as the major part of their retirement income, didn’t plan properly…
Here's what I'd really like to know because I want to know if my thinking is flawed. If this person invested their $800K into something stable, like the preferred shares of a split share fund, they could easily get 8-9% in dividends without depleting their capital. At 8% that's over $5,000 a month in dividends. FFN preferreds for example pay 9.35% which would be $6233 a month.
Why is the way of thinking always about building up this huge amount of money and then drawing it down until we're dead instead of using our money to continue to pay us a salary through dividends for the rest of our lives?
I'm not trying to sound like an a$$, I'd seriously like to know why what I'm proposing above would or wouldn't work.
The yield on those is usually more in the 5-7% range from what I've seen, but I was planning on something similar.
Exactly what I was thinking. I have about 25 different div stocks that are paying me about $3800 before tax on $300,000. This is more than enough money for me to live on with only $300,000. If 1-2 doesn't pay in a particular month so what i still have 23 others that will and if all of these don't pay then we are all screwed lol
Why don't you want to spend your money? You certainly can't take it with you and if you don't get it out of your RRSP your estate will end up losing 50% or more of it in taxes. At the end of the day didn't you save it for retirement so you could spend it enjoying your actual retirement?
@@teckin139I'm almost dead on with you in terms of portfolio size and payout. I'd legitimately like someone like Adam to tell me why I can or can't do what I'm proposing above. I don't feel like I need 1.5 million dollars to line my coffin with if $500K is paying me all the money I could ever need and that's not even counting CPP (or my pension which I'm lucky enough to have).
I watch all these videos and feel like I must be missing something. I'm 46 years old and I don't really want to work until I'm 65 just so I can have a million plus dollar portfolio that I don't even need. What I can't buy is more time.
@@ddavidson5 for sure I agree with you on all your points. But my point is I will retire at 49 I am not waiting until I am 60+. I have more than the $300,000 I mentioned but I can certainly live off off that. My plan is to allow my RRSP to work for me while I lay on a beach in Asia when I am 60 I will start taking my CPP I will not wait until I am 70 because TIME is the only thing we can never get back, we can get more money but not more time. And maybe at that official retirement age maybe I will live higher on the hog. I already own a condo in Asia so I am currently asking myself what the hell am I still doing here in Canada lol.
I would like to see a scenario for a single person who rents. Not everyone wants to own a house and be trapped.
I don’t personally know anyone who owns a house and feels trapped. Your situation is an exception so I wouldn’t recommend posting such a generic opinion.
you mean like your generic comment about not knowing anyone who feels trapped?? LOL I know many home owners who do. @@AMG-BENZ-1
Was I talking to you? There are TONS of people on here who watch these videos and don't own a home. And BTW I know many people who feel trapped by 'owning' a home. It actually OWNS them!@@AMG-BENZ-1
@@AMG-BENZ-1 In Life there is something called "Opportunity Cost'. Most people don't make decisions through this lens. When you buy a home, Yes you are very happy, raise a family, own something over the long term. However, there is an opportunity cost involved. I bet any real estate agent will not talk about. Moving Flexibility is limited (no one has a job for 30 years anymore), your taxes/downpayment could be invested in the markets for higher returns (the younger you are the greater the cost of opportunity). Owning home is purely emotional decision. When emotions are involved, everyone is Happy. Even if the opportunity cost is great.
A young prudent investor will recognize this & allocate significant capital at young age to compounding assets (ie. markets) & buy a home at a later stage once you are comfortable. But reality is, people do the reverse. They get debt at young age & think they can invest later in life or have all net worth tied to thier home. Not prudent in my opinion.
To each their own...but my general observations. Thank you.