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5 Tips You MUST KNOW For Your First Year Of Retirement
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- เผยแพร่เมื่อ 15 ส.ค. 2024
- Learn more about our services: www.parallelwe...
Your first year of retirement is going to be a massive shift compared to your professional life, and these 5 tips will help ease that transition for you. Start thinking of these prior to retirement so you can be ahead of the curve when the time comes!
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 savings plan on track. You can learn more about our services at www.parallelwe... or email Info@Parallelwealth.com
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0:00 - Introduction
0:58 - Tip #1 - Spending Money
2:00 - Tip #2 - Rash Decisions
3:22 - Subscribe!
3:47 - Tip #3 - CPP & OAS
6:22 - Tip #4 - Tax
9:30 - Tip #5 - Large Transactions
11:07 - Summary
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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.
#retirement
I retired at 60 5 years ago, I was going to try and delay oas and cpp till 70, but changed my mind when I turned 65, started oas when I turned 65 and will start cpp in the new year, I took Adam's advice when he said you spend less the older you get, I can see that happening, so at 65 I have a good balance between rrsp oas and cpp shortly. We probably would have travelled a bit across the country but are staying put for now. I drove a truck for 40 years, I've travelled enough, it took these 5 years to unwind and live a normal life, there's no place like home trust me. Everyone's situation is different. Thanks to Adam for all his great advice he made me feel comfortable in retirement. Have a hobby to keep busy.
Thanks Ken, you are right about the hobby. I realized about 18 months ago when I had a long vacation (2 weeks) all at home, that I was not ready to retire because I didn't have a hobby to keep me occupied. I just retired a couple of months ago and I am beginning to get in the swing of the new hobbies. The structure is beginning to form. More structure will be helpful.
Hello. YES. Your advice is very accurate. I retired 1.5 Years ago at 69 years old and I ALMOST bought a new home which, in hindsight
, would have been a big mistake. I realize that this was caused by a need to DO SOMETHING INTERESTING as I was missing the mental stimulation of my career. Whew. That was close. I particularly appreciate the fact that you are reminding us that this is a mainly psychological adjustment. Thank you for your channel.
Adam....talk about dedication to getting content out to us when you had dental work...and 3 more root canals yet to come! Gosh! As a subscriber, one of the 42.5+K subscribers as of this date, Dec. 2021, your work is gratefully appreciated. It might feel that you don't get to "see" the impact you have because you can't get to see the fruition of your work with most of us, but trust me.....you are really helping so many of us and that increases the quality of our lives and all for the better good for humanity...as crazy as our species behaves, especially during this pandemic! ❤️🩹...💯...💙...🇨🇦...🍁
I don't have taxes withheld, but use my OAS to pay my tax installments. There is nothing more satisfying than collecting OAS to earn interest and using it to pay taxes with their own money.
Haha well played!!
Well done Adam, nothing visible on your impairment, content was a homerun!! ⚾️
This is all about finance but I have a couple of tips that are just as important. First and most important is "slow down." You will have plenty of time to do anything. Get out of rat race mode and the impatience of living in a world where time is very important. You now have all day. Second, ad this is best for longevity. Have something to retire to. Hobby, craft anything to keep yourself busy. At first it may not seem like it but you will get bored very quickly if you don't have something to occupy your time and mind. Enjoy your retirement, YOU EARNED IT.
Fellow planner here - love the content. Agree with a lot of the strategies, and actively employ them with our clients. Can concur that some early retirement decisions can save literally hundreds of thousands on taxes and other expenses when planned for. Don’t be emotional, and seek out a planner!
Thanks Oliver. I usually get hate mail from fellow planners! People don't like that I speak the truth here!! Lol
@@ParallelWealth people who don’t like your content need more education to understand that if you don’t plan for future you plan for failure
Best channel, bar none.
Thanks Murray!
I retired at 65 and started taking my cpp and oas, my wife retired at 60 and started to collect cpp and at 65 she started oas. I know Adam says to delay cpp and oas. But the question is if you delay to collect cpp and oas at 70 to receive larger amount of cpp and oas payment, what if you pass away at 71? you know life is uncertain, and living and dying is 50/50 chances, I always look at my chances of getting up next day is 50/50, you may get up or you may not GET UP! So why take a chance to collect cpp and oas at 70, if you are entitled to collect cpp and oas before 70 collect the cpp and oas and enjoy the life. Because on the other side no one knows what is waiting for us, because no one has came back to tell me how good or bad is the other side. Yes Adam is expert on financial matters, and I enjoy his videos on financial plans very much. But he does not have a crystal ball to gage how long you will live and when will you die. Choice is yours, when to collect cpp and oas as the saying goes. " Bird in a hand is better than two in bush."
Jim, you know Jesus promised a new heaven and a new earth for those who believe. God bless you.
Lots of folks pass away in their 50s or right around 65. His advice is valid in cold logical terms but even though I can afford to delay CPP to age 70, I probably won’t.
Another CFP spreading the love. I couldn't agree more with the psychological aspect and appreciate that you zero-in on a specific phase of retirement. I always tell clients that retirement income planning is a lot like land navigation. Back in the day my Army trainers taught us to not just focus on the endpoint -think in terms of passing from waypoint to waypoint and match direction with intention before moving (ex: During periods of increasing taxes, it might make more sense to draw from tax-free investments; during lower tax periods, it could make sense to use tax-deferred accounts like your pre-tax iRAs and 401ks). Whatever you do though, don't approach retirement like one big pathless forest!
Excellent comments, I have been retired for 6 months now and am doing all 5. I do have a very good financial advisor and with his suggestions and recommendations, lo and behold I am following all these 5 tips. Thank you for making this video when you are not feeling great, I hope you feel better soon.
Thanks.
Three MORE root canals?! Oh my gosh Adam; but it's worth it. Keeping one's teeth to retirement is wonderful! I retired three weeks ago, and the point with which I am wrestling is shifting to spending my funds. It IS hard to do, and I run the danger of shorting out my go-go stage and being a sad old man in 20 years with too much money. I planned to not spend my money at all until 70, but it is increasingly clear I should start spending some now. At least I delayed CPP until now (65) though delaying it to 70 and using my funds instead would have been somewhat better. I am, however, having tax taken off the CPP, as I have a total of three small jobs with no tax taken off them.. We will also delay going ahead with replacing the windows for the estimated $24000 until we get used to the new reality!
Hey Adam. Good luck with the root canals. I really appreciate the human dynamics that you incorporate with witty humor. Cheers!
Great tips...I was just thinking yesterday that I haven't even retired yet and I can see that I'll be nervous to spend money in my first year of retirement! A total shift from always knowing there is more coming in! I am planning on delaying cpp and oas as long as possible as I see it as my safety net for living too long (I intend to stay healthy) and draw down my RRSP early for maximum tax savings (to avoid having to pay the OAS clawback). However, there will be a considerable amount of time between when I retire and collecting OAS and CPP so I'm remaining open to changing that date if something changes.
Adam, even though I live in the US and won't be taking Canadian benefits, the same solid advice still applies. Really appreciate you putting together clear, concise and intelligent information for us out here. Thanks!
Thanks Scot
Thank you for your videos and help me so much with my zero knowledge on retirement and even share this to my friend.
Great advise, my wife is retiring next summer and it's good to have a plan and be prepared.
Beautiful advice/words... Retirement IS managing psychological change... Hopefully not mitigating turmoil.
The real estate market is white hot in my area right now. I do plan to sell, make a crazy profit, and live mortgage free in another province close to family. Other than that, I will be following your level-headed approach. I appreciate your advice and have learned a lot. Thank you so much!
Transitioning from saving to spending your savings is difficult for most including myself. I was told in 2018 at age 54 to start spending more and stop saving as I planned to work until at least 70 plus ( love my job) after about a year of splurging on vacations and goods... realized I didn't like seeing my net worth going down so ramped up my work hours to 60 hours per week and started saving again.....lol
I also love my Job, but when I see my OAS complete elimiated, I have to retire before 57 or earlier.
Maybe I will tell my boss every week, work 1 day for free! he only need provide transportation and Lunch. lol!
Reminds us about making that appt with a tax advisor. We typically do our own.
Best channel 💯
Thank you Santiago!
Hey Adam, great job on all your videos! Very educational, often gets me thinking of new options or just confirms I'm on the right track. Keep it up! 👍
Thanks Daniel.
8:39 mark: Regarding not having enough tax withheld at source: That's what a short-term saving account is great for. Instead of paying an interest-free loan to the Government (that's what we call paying tax before it's due), manage your situation and have the money in your own account, under your control.
Online banks like Tangerine are great for that purpose. But only if you're organized and disciplined. :)
Delaying cpp works if you both live a long life. But if you are using up your savings to delay it and then your spouse passes unexpectedly, you've used up your savings and now you also don't get the spouses OAS. I get that the CPP will be bigger but that too is reduced to 60 per cent. You can't get those savings back.
Excellent content. What I liked most is the advice on having a tax strategy and realizing that come tax time you are facing a rather huge tax bill. It’s a great idea to see that in advance and not be shocked later. Great stuff! Congratulations.
Feel better, great review as usual 👍
Another great video Adam! I have a topic suggestion for future video: The Cash Wedge Strategy (when in retirement). I know it's a fairly simple strategy, but may be something that some of your audience may not be aware of (or may be doing it, but not in the most efficient way). I've watched many (but not all...yet) of your videos, so maybe you've already covered this in another video that I haven't watched yet. Cheers.
Can you explain the Cash Wedge Strategy?
Your cheek is swollen because that is where the dentist's money is stored.😊 Love your videos and you are so committed to your channel. You always have great advice.
hahahaha! Probably true
The optimal age to take CPP is 65. 70 is too late. If you take CPP at 70 it will take you 12 years to break even on the CPP you would have received in the five years from 65 to 70. Plus, you will have had the utility of that money during those early years of retirement. If you wait until 70: 70 + 12 = 82. The CRA has a word to describe the average 82 year old Canadian: "Deceased".
Very useful tips - Thank you Adam! ❤
My pleasure!
Excellent Advice !
Interesting analogy to be made with the root canals…Probably the way most of us feel when we need to go meet our financial advisor ;-)
"filling 40 hours a week - volunteer?" kindly speak more on this.
It will take a year or more for me to sort out my collected stuff from hobbies before any move! I’ll be busy in the basement for a year 😅
Certainly psychological. For those of us who lost a spouse early all the life expectancy tables become much less meaningful. Even if you’re in a good position at 65 there’s that fear that you won’t get the CPP you paid into all your life.
I took Social Security USA at 62.5 Years. I ran the numbers and could live very well on that and my pension. I'm severely disabled and my health is hot garbage, It's in no way certain I'll even make 70 years old. It made sense for me to take retirement at 62.5. Again your one size fits all financial advice astounds me. Everybody's situation is different. If your health is a dumpster fire then taking all benefits early makes sense. If you can live well on reduced benefits because you have strong income in other areas while not take the money now. So called financial planners seem to be the worse at planning finances realistically.
Another winner presentation Adam! Really feel for your soreness from dental work...excellent job in persevering to get the content out to us...amazing!👍💥🎉. A quick question about CPP and if someone is receiving CPP disability and will be for the rest of their lives. I read on the CRA site that if receiving CPP disability at age 65 it will AUTOMATICALLY shift to CPP benefits. I can't find out if one can stop the CPP benefits to start up at age 65 so to fit into the delay strategy you talked about. The RRSP or RRIF meltdown is needed with out CPP up to 70 to save on taxation. If you know what I mean....jelly bean🙃🤔 Thanks again💯🇨🇦
Direct rollover at 65 to regular CPP. You might be able to stop CPP DI right before 65 and then delay regular CPP, but would have to check with My Service Canada.
@@ParallelWealth OK, will take the next steps and check with "My service Canada." Hope you are feeling a bit better today and the swelling has gone down a bit more. :)
Another get video relevant to where I am - just retired at 70.5 and going through my first year. When I filed to receive CPP and OAS, since I did not know what my tax implications where going to be once I am steady-state in retirement, I opted for 15% withholding tax. Based on my 2021/2022 income, my OAS is being clawed back as I had a full working year in 2021 and hybrid in 2022 - part final income from my employment as I retired mid-Jan 2022 and part income from CPP, RRSP, etc. My monthly RRSP withdrawals, based on the amount, is withholding 20% tax. I am in the situation whereby I have not paid enough tax and will require to pay the government more tax during my 2022 tax return filing. Suppose that I use my RRSP to withdraw tax to pay the government, will it be accounted as net income and have double tax implications on the amount I withdraw to pay the tax? If not, how is this accounted for in the tax returns as a special withdrawal to get any credits vs treated as an income withdrawal?
Any RRSP will be considered tax. You could wait until new year to give you cash for tax time, but bump the income to next tax year
Quarterly instalments is the government's way of making sure you pay your tax. If you don't make the required installments the interest charged is onerous on the misted payments!
This makes me mad
To the best of my knowledge, No business is aloud to charge interest on a" bill "that has not been made.
I would like to get the interest and pay the bill, when it's due. Not before the amount is known. I have in the past not paid the quarterly and in stead ramped up charity giving and other tax benefits.
Get well thank you for the video 👍🏾
Side note, is that a modern pole lamp? They're still being made? Or vintage? I like it. My mom's are 60 years old...
I can't express enough gratitude for your videos Adam. Best wishes on those root canals. The OAS and CPP decision I think will be based on how long I expect to live. My father's side has a long life span but on my mothers side its sadly much shorter (8/11 kids didn't see retirement). In m mind, why would I grind through savings that I could leave for the kids? Wouldn't it be better to start pulling out my hard earned CPP/OAS contributions instead of leaving it to the government?
That's not necessarily my plan, just my current line of thinking. Come to think of it, what does happen to all those government benefits when someone dies? I know there is a portion of survivor benefit for spouse or common law but what if there is no one?
Government payments stop if you don't have a spouse or CL partner when you pass
Great content, thanks Adam!👍
Thanks Kimmy
I'm a bit of an oddball here I guess, I'm retiring in 2 years and took advantage of the hot real estate market to cashout 2 weeks ago. Was gonna sell in 2 yrs. anyways to hit the road like they say.
Diane S hi adam so much information but still im confuse im having my early retirement im 59 yrs old im recieving my retirement plus bredge benefit i dont know if taking cpp at 60 is right for me and what percentage should i put as to avoid a lot of tax and if i work part-time i wiĺl pay more taxes
We are heading towards a major disaster & the majority of the working class in Canada will never truly get retired, they have to work until they are gone.
My husband is 63 and is self employed. Should he opt out of paying CPP? Not taking his CPP early just not contributing to it any more. How will this affect his CPP when he retires at 65?
Buy the way, i turning 59 im september.
For me I need to sell my house to be able to retire. Downsizing is our only option. However, we will also be moving too.
I know what you mean and I believe we are in the same situation here. Where are you planning to go? Best of luck!
A lot of Canadians are house rich and cash 'poor'. You are not alone in this and it's a very common reality for many.
@@evadeanu1 We are moving to West Kelowna from the rain capital of Canada. The move is something we always planned and therefore knew our house was only investment to get us there. Unfortunately we fell in love with our house and it's location within our city. Just fell out of love with the city and the cost of living in it.
Forced retirement, turning 60 in 2023. I get a small pension from work. Even though I am not contributing to CPP with no earned income, should I still wait as long as possible to start pulling CPP?
I actually have a tip for you Adam. Get caps on your teeth with the root canals. I delayed and a year later bit down on something and broke my tooth. Then it had to come out. Unlike CPP, don't delay, there's no benefit 😉
Thanks for the tip Ric!
If you have health issues and your expiry date on this planet could be sooner rather than later, it is smart to take CPP early if you retire at sixty. LOL
Ron, not much data can back this up tho. For those taking at 60 would be a psychological or health decision, not a financial one.
“Could be” isn’t enough reason for me. I think it’s smarter to take the largest, guaranteed, fully indexed amount I can get from CPP and OAS so that I know I will have a reduced reliance on my own savings in the future.
These videos are fantastic! Thank you so much! If I am still working lw (age 64) up to my 66 th year, still recommend taking OAS at 64?
65 is earliest for OAS and delay a year or two after you retire to avoid clawback
Love your channel, great info as I see retirement in my horizon. Thank you. I have a question regarding principal residency. I plan on selling my home in feb-2022 and would like to purchase a “retirement” cottage but live in a rental property until I retire (I’m turning 54 next year). Would the cottage property be still considered my principal residence if I live in a rental home?
Likely, as long as you don't rent it out. But confirm with your accountant.
Adam great advice ! Another question related to my RRSP and LIRA should I plan a COLA with them or not ?
Adjust income for inflation - tied to all income, not just those accounts. Video tomorrow talks about this.
If you decided to start receiving CPP, can you change your mind? My dad is in his first year of retirement and took CPP at 65 +3 months. I want to know if he can now delay it. As for your tip on taking OAS right away, I like that... how it's a psychological thing that you're "now retired". Thanks Adam!
Anytime within 12 months of starting payments you can stop. He would need to pay back all payments to date. Contact my service Canada.
@@ParallelWealth good knowledge, but we should always plan ahead not after.
Hi Adam I follow your video regularly and I found what it seem to me a BID contradictory between this video and the one about potential tax changes. Let me explain on this fifth tips you said do not sell your rental property in the first year of retirement BUT on the other video you explain that “probably” have a tax change in the capital gain inclusion soon or in 2022 and you even recommend to sell those properties to avoid to pay to much tax.
How can you say one advise to not do make a large transaction (like selling a rental properties) and one month ago you said sell soon your rental properties to avoid the change of the capital gain tax ?
I hope is clear enough my explanation because me right now you recommend two acts opposite when it concern to sell rental properties.
I have never said to sell a rental, just that possible tax changes coming could affect your taxes moving forward. As for the 'contradiction' we are talking about only people in 1st year of retirment. Maybe 1% of viewers. Look, I make these videos so that thousands of ppls can get value and make better decisions. For the 1% of 1st year retirees watching, maybe 5% have a rental property. It's a small number. So it's not a contradictions, it's a general rule that some fall outside. Those in the 1st year also face a unique time with possible tax changes.
Hope that clears it up
I thought this also spoke about impulse. I assume if it is part of a plan, then it is ok. Goes to another point mentioned in the video.
Do you have any talk about GIS?
Not an individual video.
My current gig has a DB plan. I plan to keep working (less), but I'm thinking about unlocking LIRA at 60. Bad idea? Should I keep contributing to my RRSP? I love those tax refunds.
Bob, focus should be to level average tax rate. So if you need to unlock and draw down LIRA then do that
What are OAS and CPP?
Both government pension benefits in Canada. Search our channel for lots of videos on both
What is cpp and oas?
I’ve signed up to collect my CPP to start this summer at age 60. I did this because I was having health issues. Is there a way I can postpone it until I’m 70?
You can, just reach out to service Canada and let them know. There will be a form to sign.
I like your tips but I have few remarks. Why are you talking about retiring at 60? 65 is the retirement age in Canada. Even though you may retire early, at 60, most hard working people retire not earlier than 65. Then you say about collecting a cheque from the government, no, government doesn't give you free money, it's all OUR money, we, the people, contribute to it for the most of our lives in one way or another. So when we retire we are taking back our money, it's all about perception, when you say "government cheque" it sound like the government is doing us a favour.
the delay only works if you live past about 85.
82, not 85 James. You are also missing out on the tax planning. If you die at 81 you missed out very slightly on the CPP, but would have paid far less tax to death and at death. Remember to treat retirement assets as a whole, not silos.
Hi i am.planing to retire. I live in montreal. I don't know much about
It’s hard to see your net worth going down during retirement after a lifetime of accumulation.
It is REALLY difficult to see your net worth going down. You worked so hard for decades to save that money and now you are supposed to just spend it?!? After all the sacrifices I had to make to save it, now get rid of it? That's sure how it feels to me. On the other hand if you you didn't save it so you could spend it enjoying your retirement then why did you save it? At least that's what I try to tell myself.
On age when to take CPP, for me the breakeven point is at 80 if I delay at 65, so not very « go-go » phase friendly (and I would need to withdraw more form my savings). I’m going with 60. On the tax planning side of things, I have a question: when I made my plan with my adviser at the bank, the automatically withdraw from my TFSA first because there is no taxes, my income is lower and my money in my RRSP can snowball more in the meantime. I totally get that. However, this will catch up with me later when my TFSA is dried up and therefore my income way larger because most comes from my RRSP. If this matches my slow-go phase, maybe. So at this point, I’m thinking I rather withdraw from both accounts proportionally, my income stays somewhat low, and I still have money in my TFSA account in case of emregencies. Are there any general strategies to consider when selecting from which account to withdraw first? A video on this would be nice !
It’s kind of the point that you withdraw more from your savings when deferring CPP to age 70, but when your CPP delivers guaranteed, indexed benefits even when there is a bear market, it’s a reasonable trade off. But, of course, if you need the money sooner, so be it, you just want to be sure you’re not saving your own money to get less from CPP.
Breakeven point seems late...calculations correct? You must have retired in your 40s.
Ballpark values of TFSA and RRSP?
@@ParallelWealth not retired yet…but I was a grad student for ever and looking to retire at 57 next year. At 60, I get 4700$/y from CPP (Quebec), and 6200$ at 65. So about 25k to get back at 1500$/year. I also get a 30k pension from our federal gov. + 115k in my TFSA and 234k in RRSP.
You started off with spend money, the don't spend money. I have a few friends in retirement who's assets keep going up and up and will die with WAY TOO much money in the bank!!!
that is a good problem to have as opposed to the reverse not having enough money in the bank! LOL
I don’t really care if i go out with a ton of assets, it’ll just go to my children, minus taxes.
@@ronbonora7872 You give up a lot to save money when you are younger. Not spending it and then paying 50% tax on your rrsp when you die seems like a crime!
Dont get 50% one must be dying before 72 years coz one has to get out of holding rrsp accounts at year ending 71
@@tealing6660 funds in a RIF are deemed sold at death if you are the surviving spouse and counted as income. It is definitely possible for the estate to be paying 50% tax on the proceeds from a RIF.