If you don't have mortgage payments or car payments, 4% rule says that's a withdrawal of 16K a year which is $1333 per month. Adding CPP and OAS, yes, a couple will have around $5000 a month to live comfortably.
My retirement income is $2000 a month and I do just fine. I have no debt Have a nest egg put aside.,Travelled a lot in my life and I don't get the travel bug anymore. Love my small apartment in my beautiful small city in PEI ( where people dream of retiring to btw)I'm 70 snd have been retired 6 years.
Great video. My wife and I retired with a little over 400,000 and we're doing great. We own our home and were completely debt free both of which I think are vital. We are not concerned about leaving a "legacy" to our children. It will be great if we do, but if we need to use the equity in our home to get us through our final years, then that's what we'll do.
The last scenario troubled me a little. We were demonstrating the retirement plan for without a house, but did not bump up the monthly income need to account for rent. I suppose there are scenarios where the cost of owning/maintaining your own home match what you might pay in rent. But the cost of rent has really soared in the past 12-24 months.
Yup. You’re correct. That’s because we had to stay in the budget of 400k. If we increased the monthly budget to account for rent on top, then the money would run out much sooner. So this couple would need to pay rent out of the current budget we listed. It would be harder to do for sure, for sure.
This was very helpful !!! I saw the 500k one and tried to find it to show my wife... thanks for mentioning that it was deleted I thought I was having a senior moment 😊
But Susie Badoozie had a ton of dough. How about a single person with a more humble realistic savings. 400 to 500 k. No defined pension because 2 percent have one. Maybe a small LIRA , some Rrsp and some tfsa. All invested at approximately 5%
Soo many factors that can throw your original game plan off in a heartbeat. Need to plan for 120-130% ratio and then hope for the best. Not a fan of factoring in going back to work part-time or selling home to hit a comfortable ratio, IMO that should be part Plan B along with cutting back on expenses. Also, along with sticking to original retirement budget would be a good idea to make sure whomever prepared your financial plan checks it every few years to make sure you are still on track. For the lucky few with a defined benefit pension plan - good on you - almost zero need to even have a retirement plan. Thanks for the video.
Way too many factors, housing market collapse, banking crisis, medical problems that could lead someone not being able to work until they're 65, a house fire, a spouse dies...etc. There can never be enough money. People will need to have a home paid off and over 400k to retire, no many will be able to achieve that in many parts of the world where the housing is unattainable for the average income earner.
@@D33Lux Don't forget wholescale nuclear war, complete ecological collapse, more deadly pandemics, a meteor striking the earth, the Maple Leafs winning the Stanley Cup. Lots of things can go horribly wrong.
I retired a year ago at age 63. I have a company pension worth 164 k and 332k in bank investments. I also have a renter in the basement paying me $450 a month. I own my home and I have made it ready for retirement. New deck, new furnace and new tank-less water heater etc. I also have solar on the roof and I pay nothing for power. The solar even covers about 85% of my gas heating bills. I am collecting CPP early holding 14% of that for tax with a net of just under $1000. Once I start collecting OAS I will have a net income of about $4,400 a month. I also have 26k in unused RRSP. I will be claiming some of the RRSP for 2023 and 2024 income tax. That should get me a refund of about $4000 for 2023 and again for 2024. I didn't need an advisor to figure this all out. I don't want to die rich, I want to die broke.
I would be interested in a video of what things look like in the no-go stage. For instance what percentage of people still live at home? What percentage move into retirement homes? What potential extra costs could be involved like home nursing, retirement homes and other things an older person might need. I would argue people in no-go stage need a lot more money but hopefully they can sell the house for additional buffer.
Considering life expectancy in Canada is around 80, wouldn't it make more sense to start collecting at 60? Assuming you live to 80, you will have collected 20 years rather than 10. Is the 10 year path going to get you more money over the 20 year path? Imagine passing at 75 and only collecting 5 years worth.
Love your videos! I would love to see a video on how to read index fund fact sheets when looking to buy into a fund of ETF. there are soooo many funds out there, and would love a tutorial on what key things to look at when reviewing that fact sheet that each fund has!
If you sell your house of 500k and buy a 400k home you will not have 100k. You will have to pay realtor fee's and then land transfer tax when you buy the 400k home. You may end up with 70k or less.
Thank you for making this one. I can’t be a client as I have less than $500,000 so this is helpful. There are also complications in my situation so I will try to work out on my own. Again, thank you
Consistently excellent “Down to Earth” content! Hopefully my colleagues are also catching your videos. We’re all in that area where we need a stress tested plan.,,, to remove the stress…. So to speak. Thanks !!
Another great video Rhys! I understand that 5% return is based on historical averages, but I personally target a bit less since I'm already retired and therefore have less time to ''catch up'' when the markets go south. When we just look at the net market growth since before the pandemic hit, I feel that lower ''expectations'' can allow me to still meet my spending goals in short-medium term stress tests.
One also has to account for economic woes like a housing crash and banking collapses like we saw earlier this year in California. The national debt is over 1 trillion in Canada and over 30 trillion in the U.S. and that is perpetual as the debt can never be paid off. We may not see an economic collapse in 5 or 10 years, but it will eventually happen and the people who are in their teens will have to deal with that later on in life. Eventually the banks are going to call in all debts.
@@wellbuiltwealthwould love for you to take a look at my simple portfolio, but your an expensive guy. I will continue to watch your videos on repeat instead. 😀
It all sounds good, but should there be some risk mitigation should one spouse pass away early unexpectedly? I would think their success percentage might plummet.
Good call. We always do that kind of stress testing in our planning. A premature death can hurt or help things financially depending on the situation. And there are ways to mitigate that risk with life insurance and pension options etc. All part of good planning. But good call :)
I was just going to comment on that. With the death of a spouse the final years of the surviving spouse would be cut in half if I am not mistaken. No OAS survivor pension and CPP survivor pension would be negligible?? because they are already at their max as mentioned in the video. People survive on that all the time but it will hurt!
I feel that assuming a 5% return is dangerous. As far as I can tell, my portfolio ("balanced growth") is returning about 1% over the last 5 years. It has a significant proportion in 5% GICs, plus some better-than-average mutual funds, so I doubt that my situation is unusual.
I can’t speak to your portfolio as I don’t know what you have, but these are actually the standard return rates in the industry for a balanced portfolio. And it’s certainly what my clients with balanced portfolios have seen over the years. Interest rates have definitely been low over the last chunk of years which pulls down the returns of bonds and GICs etc. But equities (the other chunk of a balanced portfolio) have performed reasonably well over that period. But all that said, I’m just using historically normal rates of return for a balanced portfolio. History isn’t a guarantee of what will happen in the future, but I see it as a reasonable guideline. Cheers
Maybe this has been addressed but I did not see it. You have the Go-go, Go-slow, and No-go phase with $5500, $5000, $4500 after tax monthly spending in each. But would not the $5500 in year one be far less in year 10 due to inflation? Shouldn’t the $5500 go up incrementally each year with inflation? Otherwise the $5500 in year one of Go-go would likely be the same in year one of No-go phase, as it would be 20 years later. You dont need to reduce the $5500 to $4500 as inflation will do that for you. That number should not decrease? But likely will have to actually increase over time? Or am I missing something? Was it accounted for somewhere?
@@wellbuiltwealthok awesome!! Thanks for the reply! I know you said it was adjusted for inflation but wasn’t sure that it applied to the monthly expenses as they were not increasing by the 3%. But I see now that it’s adjusted to show the same dollar amount. Cheers!
Another banger video yet again…this gives us all hope! I’d love to see a video with the same numbers but with selling the 500k house and renting at 200k/ month. Many retirees don’t want home ownership thus leaving a significant amount of cash to be invested.
The fact remains that many don't want to put their faith in a landlord's hands, particularly in the later years of life when turning things around are a lot more stressful. A condo (or home ownership with contracted maintenance) enables one to feel secure in their own home without worrying about the collateral maintenance.
@@AMG-BENZ-1 totally agree with your comment. My wife and I are a few years away from retirement and have always known the house we raised our kids in is far to big for us as we age. We’ve talked about renting as a option but honestly a condo is where we will probably end up as it gives us stability and future financial growth as homes increase in Values. Just curious how 800k on top of our investments would look like in the future tho…we are open to other options
Removing the $500,000 home but keeping the monthly expenses the same seems strange: shouldn't you need to increase the expenses to cover renting a home in that scenario?
@@wellbuiltwealth In that case, it sounds like this video is really about retiring on $900,000, because that's what the Dodds have to their name at age 64. Even in the scenario where you remove the home, they are mysteriously provided with free housing by some external unaccounted-for source.
Can you do a video like this for a renter? A lot of your videos feature retirees who own their own house. What about someone who has $700k and no home? Or something like that...Or even better, the other way around - how much do you need to retire at age 60 when you are a renter? Overall, really interesting videos, thanks for that!
I’d love to see a video of sort of the inverse calculation where you pick a retirement age (say 40) and is 5 years down the road. How much do I need to set as my goal to make that achieveable?
I would like to see the same scenario but working parttime from 60 to 65 using savings andctgen collecting cpp and oas. I think you only have one short video aboutpart time work
I'm currently creating near future retirement strategies using spreadsheets and I've got to tell you that both taxes and inflation in Canada are just KILLERS ! It's either they keep inflating the system or this things blows up !
Hi Rhys, Where do you invest your $400,000 savings if you need $5500 per month after tax? $400,000 invested at 5% yield on a balance portfolio earns $20,000 per year or $1,666.67 per month. Adding CPP and OAS combined is $1,470 average for an individual or $2,940 for a couple. So adding together $1,666.67 + $2,940 = $4,567.67 only and that is before taxes. Are you suggesting to withdraw some of the RRSP money to makeup for the shortfall in the monthly income?
Defined benefit pension plans are practically a thing of the past. I had two at different jobs during my (still ongoing) career, but not at any of the four or five other jobs. Companies increasingly seem to want to avoid them, and MAYBE give you some health benefits that you may or may not need but pay into regardless. I have a feeling there won’t be many Maudes and Claudes among millennials and Gen Z, let along Gen X.
I am 49 years old, my wife 48. One town home and one house worth 3 million. Mortgage 0.6 million. Cash in hand 1.7 million. Annual income 0.5 million before retirement. I am curious how much I can spend per month if I retire at 59.
@@Pkeats817 Fully agree, but I have 2 kids. I have to wait until they go to university. I have to stay where I am now. So stop working looks just waste.
your third scenario makes no sense. if they don't have a home, where are they living? The go-go, slow-go, and no-go cash flow needs to increase to accommodate some kind of rental payment, which will be more than any land tax you pay on your paid off home...
What is your actual profesional opinion on inflation factors in this type of planning? Almost every physical good I have in my home is cheaper today than it was in the 70's and 80's. I see inflation more of a boogie man in these scenarios.
Great video as always. Are there any free similar softwares where we can stress test on our own without and are user friendly. I’ve tried the Canada one however didn’t really help in giving me a clear picture. I’m already retired (a few years now but only 57j while my wife will work another 2 years.
What software is used to make these projections? Is it Canadian market specific? Does it take into account taxation on Canadian large cap eligible dividends in non registered accounts? Thanks.
What TFSA (Tax Free Savings Account) are they using because most allow a maximum of 6k to be deposited. How were they able to put 70k? What is the maximum allowed? Thanks
As a Newfoundlander I can tell that very few of us have a home worth $500k. Those are Ontario home prices my friend. Cut that in half in St. John’s, half it again in the outports. And 85% CPP in Newfoundland? Who are these tycoons of industry lol
If only I had the chance to come and hang out in Newfoundland before making this video, then I probably would’ve known all that. It’s on my list of things to do soon!! :)
I really question the value of all these VERY hypothetical scenarios and the probability of them being close to reality. You should include the death of one of the spouses at ~70-75 and the effect on the survivor. I think the best plan is to plan for a probable case and adjust as needed during retirement
Correct. We look at those kinds of scenarios with our clients all the time. This is just a quick snapshot. Financial planning is best done on a regular basis. Doing it once and then never reviewing it again wouldn’t be recommended.
how about single people with or without debt, and no home ownership as that is out of reach for single people unless they can get a rundown trailer in a dodgy park somewhere. also not expecting to live to age 80, let alone age 90. if some miracle kept me alive until 80 i'd be in a nursing home waiting to die
You could live like a king by moving to SE Asia, Mexico, Central / South America. Life is short, we will all die, why not retire earlier in a warmer country that has much lower cost of living?
if you're a high income self employed person(or anyone to a degree) who thinks they'll work beyond 65 ,say to 70, and are thinking of delaying your CPP to 70 for a bigger payout be aware you cannot stop CPP contributions unless you are receiving your CPP at least until 70 . I only found out this today and while i HAVEN'T DONE THE (complex because it involved a few factors ) MATH the thought of paying double portions of CPP which is in the ball park of 8000 plus on average over the next 5 of those years seems to make the increased CPP value not make sense , of course there are tax factors etc but it's not simply an increased straight payout you think it is and looks at first glace a(big) possible losing proposition
What an incongruous string of BS. "Can you retire with 400K?" Sure, if you start with more than double that - oh, and let's randomly add in a quarter million from a 'forgotten' pension to jack it up a bit more!
@@wellbuiltwealth My bad, you are correct. After ten minutes of listening to details of scenarios relying on the inclusion of a half million dollar house, or an additional quarter million pension to pad the numbers, I cancelled out and did miss the last 90 seconds where you do indeed talk about the actual subject detailed in the video title. Apologies for my initial tone, but at more than 80% of the way through the video, it didn't seem worth the time to continue listening, when the scenarios were so divergent from the postulate, and I was annoyed at having ten minutes wasted with a click-bait video title. Maybe (as a suggestion?) in future multi-scenario videos, you could list or outline the video content, allowing your audience better clarity as to the actual scenarios to be covered, rather than burying the lede on the assumption that everyone will watch 100% of the video. It is far easier to criticize than to create, and good on you for doing so - all the best.
@@RandomContent0 That, sir, is a totally fair comment. I loathe click bait and didn't intent to mislead anyone. I will try to find a way to do what you suggest.
Avoid CPP and OAS until 70 ✅ (Unless unhealthy) I was the one who pointed it out! But didn’t mean to break your heart. 🤓 Key points: 1) Have a monthly budget and follow it. 2) Focus closely on your COST side of the ledger, not just the income or revenue streams from CPP, OAS, RRIF or DB plan as this will effect retirement lifestyle equally as much. Thanks for a realistic retirement financial analysis for Canadians ✅
the chances of Claude living to 90 is close to zero - have him die at 82 and living in assisted living 5 or 7 years prior to that… a more realistic basis for planning - of course he could be that rare fellow that dies at 90, but don't bet on it - and why are they leaving an estate?
You’re definitely welcome to plan your future however you like. That’s the beauty of software like this. It enables a gazillion scenarios. By the way, my wife’s granddad is 102 :)
According to the Society of Actuaries, a 65-year-old male, in average health, has a 35% chance of living to 90; for a woman the odds are 46%. That's nowhere near zero and high enough where people should be planning to live to 90.
Taken from US Social Security Data 2023, live expectancy for a male at 65 is 16.94 years or 81.9 years, for a female at 65 is 19.66 years or 84.6 years This is a very complex subject but given that people under estimate risk and over estimate their health, here are actual population numbers… Total number of Canadians of both genders 65 to 69 2,308,041, number of Canadians 90 to 94 260,583 - Based on these population numbers for Canada in 2023, there is a 11.2% chance of a person who were once 65 to 69 living to the age of 90 to 94
Thank you for this corrected video much appreciated. I guess this particular video is mainly geared towards mainstream folk because for folk from Africa and the Caribbean and South East Asia and some West Asian countries with dual citizenship, they would only need about $2000 out of that $5k monthly to live in these better weather foreign lands living a better life for half the cost, right.☺️
Can you retire with just 400k? Probably not! Can you retire if you also own your 500k home or if you also have a 700 mos pension or if you get a big inheritance or if you win a 27 million lottery? Probably 🤣🤣
What’s your point? The answer is not “probably not”. It’s yes you can. I never made more than 50k in any year of my working life and my nest egg is more than 400k. I don’t have a union pension or even the max cpp. Sarcasm isn’t going to get you to a goal. Hard work gets you to the goal. But hey…you do you, it’s ok. Maybe that lottery win will work out
If you don't have mortgage payments or car payments, 4% rule says that's a withdrawal of 16K a year which is $1333 per month. Adding CPP and OAS, yes, a couple will have around $5000 a month to live comfortably.
My retirement income is $2000 a month and I do just fine. I have no debt Have a nest egg put aside.,Travelled a lot in my life and I don't get the travel bug anymore. Love my small apartment in my beautiful small city in PEI ( where people dream of retiring to btw)I'm 70 snd have been retired 6 years.
Great video. My wife and I retired with a little over 400,000 and we're doing great. We own our home and were completely debt free both of which I think are vital. We are not concerned about leaving a "legacy" to our children. It will be great if we do, but if we need to use the equity in our home to get us through our final years, then that's what we'll do.
That’s kind of where we are at, except my husband thinks he can only retire at 65.
The last scenario troubled me a little. We were demonstrating the retirement plan for without a house, but did not bump up the monthly income need to account for rent. I suppose there are scenarios where the cost of owning/maintaining your own home match what you might pay in rent. But the cost of rent has really soared in the past 12-24 months.
Yup. You’re correct. That’s because we had to stay in the budget of 400k. If we increased the monthly budget to account for rent on top, then the money would run out much sooner. So this couple would need to pay rent out of the current budget we listed. It would be harder to do for sure, for sure.
Good luck while paying rent
This was very helpful !!! I saw the 500k one and tried to find it to show my wife... thanks for mentioning that it was deleted I thought I was having a senior moment 😊
😂
Great video. Please do one for the single retiree. I hear 50% will be single in retirement .Thanks
I’ll keep ‘em coming. Just did one on Suzie Badoozie a few weeks back. And she’s single.
@wellbuiltwealth which video is that ? would luv to review it
But Susie Badoozie had a ton of dough. How about a single person with a more humble realistic savings. 400 to 500 k. No defined pension because 2 percent have one. Maybe a small LIRA , some Rrsp and some tfsa. All invested at approximately 5%
Soo many factors that can throw your original game plan off in a heartbeat. Need to plan for 120-130% ratio and then hope for the best. Not a fan of factoring in going back to work part-time or selling home to hit a comfortable ratio, IMO that should be part Plan B along with cutting back on expenses. Also, along with sticking to original retirement budget would be a good idea to make sure whomever prepared your financial plan checks it every few years to make sure you are still on track. For the lucky few with a defined benefit pension plan - good on you - almost zero need to even have a retirement plan. Thanks for the video.
Way too many factors, housing market collapse, banking crisis, medical problems that could lead someone not being able to work until they're 65, a house fire, a spouse dies...etc. There can never be enough money. People will need to have a home paid off and over 400k to retire, no many will be able to achieve that in many parts of the world where the housing is unattainable for the average income earner.
@@D33Lux Don't forget wholescale nuclear war, complete ecological collapse, more deadly pandemics, a meteor striking the earth, the Maple Leafs winning the Stanley Cup. Lots of things can go horribly wrong.
I hardly know anyone that lives to 90. Most guys I've know never made it to 80. Most common early 70's.
Yup the odd woman does, very rare for a man
I retired a year ago at age 63. I have a company pension worth 164 k and 332k in bank investments. I also have a renter in the basement paying me $450 a month. I own my home and I have made it ready for retirement. New deck, new furnace and new tank-less water heater etc. I also have solar on the roof and I pay nothing for power. The solar even covers about 85% of my gas heating bills. I am collecting CPP early holding 14% of that for tax with a net of just under $1000. Once I start collecting OAS I will have a net income of about $4,400 a month. I also have 26k in unused RRSP. I will be claiming some of the RRSP for 2023 and 2024 income tax. That should get me a refund of about $4000 for 2023 and again for 2024. I didn't need an advisor to figure this all out. I don't want to die rich, I want to die broke.
I would be interested in a video of what things look like in the no-go stage. For instance what percentage of people still live at home? What percentage move into retirement homes? What potential extra costs could be involved like home nursing, retirement homes and other things an older person might need. I would argue people in no-go stage need a lot more money but hopefully they can sell the house for additional buffer.
Considering life expectancy in Canada is around 80, wouldn't it make more sense to start collecting at 60? Assuming you live to 80, you will have collected 20 years rather than 10. Is the 10 year path going to get you more money over the 20 year path? Imagine passing at 75 and only collecting 5 years worth.
80 is not the life expectancy here - especially once you have already made it to your 60s.
And when you are over 80 u don't do much at all..less money required
Love your videos! I would love to see a video on how to read index fund fact sheets when looking to buy into a fund of ETF. there are soooo many funds out there, and would love a tutorial on what key things to look at when reviewing that fact sheet that each fund has!
If you sell your house of 500k and buy a 400k home you will not have 100k. You will have to pay realtor fee's and then land transfer tax when you buy the 400k home. You may end up with 70k or less.
True that. Just using round numbers to keep it simple. But you are totally correct.
Thank you for making this one. I can’t be a client as I have less than $500,000 so this is helpful. There are also complications in my situation so I will try to work out on my own. Again, thank you
Consistently excellent “Down to Earth” content! Hopefully my colleagues are also catching your videos. We’re all in that area where we need a stress tested plan.,,, to remove the stress…. So to speak. Thanks !!
Thank you! :)
Excellent and informative as always 👍
As I live in Quebec maybe a future video regarding Quebec and the QPP ?
Cheers
We’ve done work for people in Quebec. QPP is very similar. Some “interesting” nuances with how it mingles with certain pension plans though.
@@wellbuiltwealthgood to know, maybe a future video 🤔
Great idea!
Another great video Rhys! I understand that 5% return is based on historical averages, but I personally target a bit less since I'm already retired and therefore have less time to ''catch up'' when the markets go south. When we just look at the net market growth since before the pandemic hit, I feel that lower ''expectations'' can allow me to still meet my spending goals in short-medium term stress tests.
Thank you! And there’s definitely wisdom in planning more conservatively :)
One also has to account for economic woes like a housing crash and banking collapses like we saw earlier this year in California. The national debt is over 1 trillion in Canada and over 30 trillion in the U.S. and that is perpetual as the debt can never be paid off. We may not see an economic collapse in 5 or 10 years, but it will eventually happen and the people who are in their teens will have to deal with that later on in life. Eventually the banks are going to call in all debts.
I retired on 100k and a company pension.
Mint.
Great video . Everyone should watch.
Once again, delaying CPP greatly improves the longevity of a retirement plan. A larger, guaranteed, indexed income will almost always win out.
Yeah, if it’s an option you can stomach, the math is usually pretty clear.
It’s what I did, I don’t regret it.
You people always neglect the break even point in taking early against late withdrawal
@@georgek3398 I’m not worried about a break even point I’m worried about maximizing my retirement income over the full length of my retirement
Great video. However health care costs usually mean higher expenses as you age. Plan for that unless you have nearby and really great family
Thanks!
What is the name of the planning software you use? Also do you do these plans for viewers?
It’s called Conquest. And you bet, we do these plans for people across Canada. See here for details: www.wellbuiltwealth.ca/service-options
@@wellbuiltwealthwould love for you to take a look at my simple portfolio, but your an expensive guy. I will continue to watch your videos on repeat instead. 😀
It all sounds good, but should there be some risk mitigation should one spouse pass away early unexpectedly? I would think their success percentage might plummet.
Good call. We always do that kind of stress testing in our planning. A premature death can hurt or help things financially depending on the situation. And there are ways to mitigate that risk with life insurance and pension options etc. All part of good planning. But good call :)
I was just going to comment on that. With the death of a spouse the final years of the surviving spouse would be cut in half if I am not mistaken. No OAS survivor pension and CPP survivor pension would be negligible?? because they are already at their max as mentioned in the video. People survive on that all the time but it will hurt!
I feel that assuming a 5% return is dangerous. As far as I can tell, my portfolio ("balanced growth") is returning about 1% over the last 5 years. It has a significant proportion in 5% GICs, plus some better-than-average mutual funds, so I doubt that my situation is unusual.
I can’t speak to your portfolio as I don’t know what you have, but these are actually the standard return rates in the industry for a balanced portfolio. And it’s certainly what my clients with balanced portfolios have seen over the years. Interest rates have definitely been low over the last chunk of years which pulls down the returns of bonds and GICs etc. But equities (the other chunk of a balanced portfolio) have performed reasonably well over that period. But all that said, I’m just using historically normal rates of return for a balanced portfolio. History isn’t a guarantee of what will happen in the future, but I see it as a reasonable guideline.
Cheers
They could invest in higher yield dividend stocks and just use dividends to retain capital.
Nicely done on options. What program is being used to scenario these options?
Conquest
good Video - I live in Toronto and have a pension and unfortuantly you do need a gazillion dollars.
Fair comment :)
Maybe this has been addressed but I did not see it. You have the Go-go, Go-slow, and No-go phase with $5500, $5000, $4500 after tax monthly spending in each. But would not the $5500 in year one be far less in year 10 due to inflation? Shouldn’t the $5500 go up incrementally each year with inflation? Otherwise the $5500 in year one of Go-go would likely be the same in year one of No-go phase, as it would be 20 years later. You dont need to reduce the $5500 to $4500 as inflation will do that for you. That number should not decrease? But likely will have to actually increase over time? Or am I missing something? Was it accounted for somewhere?
You bet. We’ve assumed inflation in there and it’s stated in the assumptions section. So those numbers are all in todays dollars.
Cheers
@@wellbuiltwealthok awesome!! Thanks for the reply! I know you said it was adjusted for inflation but wasn’t sure that it applied to the monthly expenses as they were not increasing by the 3%. But I see now that it’s adjusted to show the same dollar amount. Cheers!
Another banger video yet again…this gives us all hope! I’d love to see a video with the same numbers but with selling the 500k house and renting at 200k/ month. Many retirees don’t want home ownership thus leaving a significant amount of cash to be invested.
The fact remains that many don't want to put their faith in a landlord's hands, particularly in the later years of life when turning things around are a lot more stressful. A condo (or home ownership with contracted maintenance) enables one to feel secure in their own home without worrying about the collateral maintenance.
Yeah, this is my concern these days too.
Thanks! I’ll put that scenario in my queue.
@@AMG-BENZ-1 totally agree with your comment. My wife and I are a few years away from retirement and have always known the house we raised our kids in is far to big for us as we age. We’ve talked about renting as a option but honestly a condo is where we will probably end up as it gives us stability and future financial growth as homes increase in Values. Just curious how 800k on top of our investments would look like in the future tho…we are open to other options
@@RC-fh2lk For some, a reverse mortgage is an option that’s out there for consideration.
What if they need to go to a nursing home for one or both in the future?
I would argue that $400K is the cost of one winter season's home heat bill in Canada.
Removing the $500,000 home but keeping the monthly expenses the same seems strange: shouldn't you need to increase the expenses to cover renting a home in that scenario?
You definitely could. But this vid is about retiring with 400k. So we can’t increase the retirement income too much or we’d need more.
@@wellbuiltwealth In that case, it sounds like this video is really about retiring on $900,000, because that's what the Dodds have to their name at age 64. Even in the scenario where you remove the home, they are mysteriously provided with free housing by some external unaccounted-for source.
Or they just have to survive on less. I have clients who have sold and moved to areas where this is entirely doable for them.
I’m not sure how to make sense of this if I have a government pension for life. How I should look at things
Why delay CPP when most people don’t live into their 90s.
Yup, they know that, thats why they will pay u more per month at 70..u have a lot less months left!
It’s a gamble worth taking I think because there is the peace of mind knowing that the numbers will support you should you live to your 90’s.
Can you do a video like this for a renter? A lot of your videos feature retirees who own their own house. What about someone who has $700k and no home? Or something like that...Or even better, the other way around - how much do you need to retire at age 60 when you are a renter? Overall, really interesting videos, thanks for that!
I vote for Angus and Agnes MacDuff in your next video from PEI....
I’d love to see a video of sort of the inverse calculation where you pick a retirement age (say 40) and is 5 years down the road. How much do I need to set as my goal to make that achieveable?
I would like to see the same scenario but working parttime from 60 to 65 using savings andctgen collecting cpp and oas. I think you only have one short video aboutpart time work
Good idea. I’ll put it in the queue.
I'm currently creating near future retirement strategies using spreadsheets and I've got to tell you that both taxes and inflation in Canada are just KILLERS ! It's either they keep inflating the system or this things blows up !
Yeah, excessive taxes are a killer in so many ways. And high inflation is profoundly terrible.
My question, on the button!
Hi Rhys,
Where do you invest your $400,000 savings if you need $5500 per month after tax? $400,000 invested at 5% yield on a balance portfolio earns $20,000 per year or $1,666.67 per month. Adding CPP and OAS combined is $1,470 average for an individual or $2,940 for a couple. So adding together $1,666.67 + $2,940 = $4,567.67 only and that is before taxes. Are you suggesting to withdraw some of the RRSP money to makeup for the shortfall in the monthly income?
I think in your calculations you are not drawing down on the capital. Only the growth. Most people will need to drawn down both.
Another great video
Defined benefit pension plans are practically a thing of the past. I had two at different jobs during my (still ongoing) career, but not at any of the four or five other jobs. Companies increasingly seem to want to avoid them, and MAYBE give you some health benefits that you may or may not need but pay into regardless. I have a feeling there won’t be many Maudes and Claudes among millennials and Gen Z, let along Gen X.
They are definitely in decline! No doubt about it.
Of course you can. Most have less. A person with a work pension needs far less too
I am 49 years old, my wife 48. One town home and one house worth 3 million. Mortgage 0.6 million. Cash in hand 1.7 million. Annual income 0.5 million before retirement. I am curious how much I can spend per month if I retire at 59.
If I had that, I would sell, live small and retire asap.
@@Pkeats817 Fully agree, but I have 2 kids. I have to wait until they go to university. I have to stay where I am now. So stop working looks just waste.
your third scenario makes no sense. if they don't have a home, where are they living? The go-go, slow-go, and no-go cash flow needs to increase to accommodate some kind of rental payment, which will be more than any land tax you pay on your paid off home...
Thanks dude!
🤓
Are you asking if a couple or a single person can retire with $400,000 in assets?
The big swing is in the investment return, isn't it? If it was at 5%, it would be nice to see what the bars do at 6 or 4...
All sorts of variables we can play with. For sure. You can spend hours and hours on this stuff. And I do 🤓
What is your actual profesional opinion on inflation factors in this type of planning? Almost every physical good I have in my home is cheaper today than it was in the 70's and 80's. I see inflation more of a boogie man in these scenarios.
Great video as always. Are there any free similar softwares where we can stress test on our own without and are user friendly. I’ve tried the Canada one however didn’t really help in giving me a clear picture. I’m already retired (a few years now but only 57j while my wife will work another 2 years.
Thank you! But sorry, I’m not aware of any that are even close to this comprehensive.
What is the software you are using?
Thanks!
Conquest. The link is in the description :)
Hi what app are you using for calculations?
Thank you
Conquest
Is there a retirement tracker program like this free for download somewhere?
Sorry. Not that I’m aware of.
So, what piece of information was included in this video that was missed in the previous one?
They had a lead time of a few years before they retired (which affects the math). This couple is retiring right away.
@@wellbuiltwealth Thank you!
What software is used to make these projections? Is it Canadian market specific? Does it take into account taxation on Canadian large cap eligible dividends in non registered accounts? Thanks.
Conquest. And yup, it’s Canadian and can factor in as much eligible dividends as you can dream up.
Nice. 😊
What application do you use for the calculation ?
Conquest
What TFSA (Tax Free Savings Account) are they using because most allow a maximum of 6k to be deposited. How were they able to put 70k? What is the maximum allowed? Thanks
6k (2024=7k) is the annual contribution room, 70k (or whatever) would be the cumulative amount. You carry forward unused room from previous years.
You may wanna watch this video: th-cam.com/video/O5zEQT8p1UE/w-d-xo.htmlsi=YNfWHQTl6AQU7lWa
@@davidhughes6048 O.k. thank-you for explaining.
@@wellbuiltwealth Thank-you kindly for the information.
Easy to have well over 100k tfsa if you contribute to it and invest in good ETFs or good dividend paying stocks. Very simple really.
As a Newfoundlander I can tell that very few of us have a home worth $500k. Those are Ontario home prices my friend. Cut that in half in St. John’s, half it again in the outports.
And 85% CPP in Newfoundland? Who are these tycoons of industry lol
If only I had the chance to come and hang out in Newfoundland before making this video, then I probably would’ve known all that. It’s on my list of things to do soon!! :)
The mindset is good enjoy life earlier not work ass off
I really question the value of all these VERY hypothetical scenarios and the probability of them being close to reality. You should include the death of one of the spouses at ~70-75 and the effect on the survivor. I think the best plan is to plan for a probable case and adjust as needed during retirement
Correct. We look at those kinds of scenarios with our clients all the time. This is just a quick snapshot. Financial planning is best done on a regular basis. Doing it once and then never reviewing it again wouldn’t be recommended.
@@wellbuiltwealth Yes, I developed my own spreadsheets to model scenarios and look at them every week! What software do you use?
Right on. We use Conquest.
How abot Harry and Larry Fairy.
With today's inflation numbers it would be scary to retire with $400K only.
Most will retire with nothing but a big --- negative. Sad reality.
I'm screwed...I will have to work until I'm 75.
how about single people with or without debt, and no home ownership as that is out of reach for single people unless they can get a rundown trailer in a dodgy park somewhere. also not expecting to live to age 80, let alone age 90. if some miracle kept me alive until 80 i'd be in a nursing home waiting to die
Scenario #3, they do not own a home. Are they renting now or living with their kids? If you factor rent, they're done.
You could live like a king by moving to SE Asia, Mexico, Central / South America. Life is short, we will all die, why not retire earlier in a warmer country that has much lower cost of living?
If you die early and have company pension and OAS or CPP can it be transferred to your kids if you dont want the kids mother to get it?
Earl & Pearl McHurl
Sold!
Interesting.
Glad you think so!
if you're a high income self employed person(or anyone to a degree) who thinks they'll work beyond 65 ,say to 70, and are thinking of delaying your CPP to 70 for a bigger payout be aware you cannot stop CPP contributions unless you are receiving your CPP at least until 70 . I only found out this today and while i HAVEN'T DONE THE (complex because it involved a few factors ) MATH the thought of paying double portions of CPP which is in the ball park of 8000 plus on average over the next 5 of those years seems to make the increased CPP value not make sense , of course there are tax factors etc but it's not simply an increased straight payout you think it is and looks at first glace a(big) possible losing proposition
What an incongruous string of BS. "Can you retire with 400K?" Sure, if you start with more than double that - oh, and let's randomly add in a quarter million from a 'forgotten' pension to jack it up a bit more!
We cover three scenarios in this video. Sounds like you maybe missed the third one.
@@wellbuiltwealth My bad, you are correct. After ten minutes of listening to details of scenarios relying on the inclusion of a half million dollar house, or an additional quarter million pension to pad the numbers, I cancelled out and did miss the last 90 seconds where you do indeed talk about the actual subject detailed in the video title.
Apologies for my initial tone, but at more than 80% of the way through the video, it didn't seem worth the time to continue listening, when the scenarios were so divergent from the postulate, and I was annoyed at having ten minutes wasted with a click-bait video title. Maybe (as a suggestion?) in future multi-scenario videos, you could list or outline the video content, allowing your audience better clarity as to the actual scenarios to be covered, rather than burying the lede on the assumption that everyone will watch 100% of the video.
It is far easier to criticize than to create, and good on you for doing so - all the best.
@@RandomContent0 That, sir, is a totally fair comment. I loathe click bait and didn't intent to mislead anyone. I will try to find a way to do what you suggest.
Avoid CPP and OAS until
70 ✅ (Unless unhealthy)
I was the one who pointed it out! But didn’t mean to break your heart. 🤓
Key points:
1) Have a monthly budget and follow it.
2) Focus closely on your COST side of the ledger, not just the income or revenue streams from CPP, OAS, RRIF or DB plan as this will effect retirement lifestyle equally as much.
Thanks for a realistic retirement financial analysis for Canadians ✅
🤓
@@wellbuiltwealth
👍
You’re doing great! ✅
Thank you! And I appreciate your eagle eyes :)
@@wellbuiltwealth
👀 💰 👀
I'm sorry, but I don't know anyone who has their mortgage paid off.
about 34% of Canadian home owners are mortgage free
I did. :)
No 😁
I’m pretty sure I know Maude n Claudethey’re my in-laws . 😉
Awesome!!!
Kenny and Fanny Penny
the chances of Claude living to 90 is close to zero - have him die at 82 and living in assisted living 5 or 7 years prior to that… a more realistic basis for planning - of course he could be that rare fellow that dies at 90, but don't bet on it - and why are they leaving an estate?
You’re definitely welcome to plan your future however you like. That’s the beauty of software like this. It enables a gazillion scenarios. By the way, my wife’s granddad is 102 :)
According to the Society of Actuaries, a 65-year-old male, in average health, has a 35% chance of living to 90; for a woman the odds are 46%. That's nowhere near zero and high enough where people should be planning to live to 90.
Taken from US Social Security Data 2023, live expectancy for a male at 65 is 16.94 years or 81.9 years, for a female at 65 is 19.66 years or 84.6 years
This is a very complex subject but given that people under estimate risk and over estimate their health, here are actual population numbers…
Total number of Canadians of both genders 65 to 69 2,308,041, number of Canadians 90 to 94 260,583 - Based on these population numbers for Canada in 2023, there is a 11.2% chance of a person who were once 65 to 69 living to the age of 90 to 94
Lou & Sue McGoo
Yes!
Thank you for this corrected video much appreciated. I guess this particular video is mainly geared towards mainstream folk because for folk from Africa and the Caribbean and South East Asia and some West Asian countries with dual citizenship, they would only need about $2000 out of that $5k monthly to live in these better weather foreign lands living a better life for half the cost, right.☺️
You may be onto something there ;)
Total bull. Delaying benefits make early retiree a pauper
Do the math. Math is honest.
Can you retire with just 400k? Probably not! Can you retire if you also own your 500k home or if you also have a 700 mos pension or if you get a big inheritance or if you win a 27 million lottery? Probably 🤣🤣
What’s your point? The answer is not “probably not”. It’s yes you can. I never made more than 50k in any year of my working life and my nest egg is more than 400k. I don’t have a union pension or even the max cpp. Sarcasm isn’t going to get you to a goal. Hard work gets you to the goal. But hey…you do you, it’s ok. Maybe that lottery win will work out
@@derekcox6531Do you have a house . . . or not? That’s a handy backup that a lot of people don’t have, for any number of legitimate reasons. :)