We deferred our CPP & OAS to age 70, I get max CPP, my wife 80% and we both get max OAS. We started them both last year and combined we have very nearly 70K a year coming in from just those pensions guaranteed and indexed for as long as we live, they will never run out for as long as we are alive. This is why I think all this focus on the CPP (and OAS) "break even point" is just a distraction when the idea is to plan such that you don't have to worry about income for as long as you live. If you end up getting more money by deferring then great, statistics say that you likely will though of course none of us are a statistic, but if you die early then is how much you managed to squeeze out of CPP really going matter to you?
My pension is currently $78,000 / yr. It will drop to 68 k at 65 years of age. It's indexed as well. CPP at 63 replaces the drop 2 years later..so I'll get $24000 before I even have to consider using CPP. I'll be in OAS clawback. I haven't even considered my wife's CPP or investments. I've only managed to save $200,000 in cash, so I should be good with my RRSPS
@@garth217 I suppose I should have mentioned that my wife and I don't have pensions outside of CPP & OAS. Clearly if you have a good employer DB pension plan your retirement future is more secure.
@ddavidson5 thanks for the reply. I find it odd that delay of CPP is being sold as the end all and be all. But in fact it's best for a specific group of folks. Everyone circumstances are different. I ve ask Adam multiple times to do a video on DB pensions but nothing yet.
@@garth217 I imagine most people (obviously not you) with good DB pensions don't bother much with these types of information videos and blogs. The bulk of their retirement income plan is organized by their employer and the rest (CPP, savings, etc.) is working around the edges, they probably don't need to pay for a service such as Parallel Wealth. Adam has done one or two videos on CPP for those with a good DB pension and whether it's a good idea to take CPP when the DB bridge benefit ends, most people with a bridge benefit do and I don't blame them, it's the simple solution but it might make some sense to take it at a different time. Again most people would need to pay someone to figure that out and at the end of the day it's probably only a relatively minor difference. Basically those without a DB pension (the majority I would say) are on their own with a lot more decisions to make and errors to avoid so they are the biggest group of retirement income information seekers. As someone without any DB pension the decisions we make around CPP & OAS do make a big difference for our long term retirement income security. It really can make or break your retirement.
Your CPP & OAS are only “there for you” if YOU are there to receive them. So it is an individual decision for each person, between getting a lower amount now, while you are still here and healthy enough to enjoy it OR deferring these income streams based upon the belief you will still be around and able to enjoy the income years into the future. No single right answer. Individual decision which each person has to accept responsibility for. I took my CPP at 60 and have hugely enjoyed spending every cent of it every month since ! 😊
Good plan if you don't have any RRSP savings. But if you do, you are better to consume the RRSP savings and let CPP grow at a significantly higher rate and take final CPP income with low risk of default or market crash.
Good points. One thing to consider is what does making that two year reserve mean for when you can retire? I agree you want to make sure you want to be prepared and you don't want to not be able to do something during the GoGo years... But if you are thinking that you need to continue working in order to fully fund that two year reserve, that time continued working is eating into your active GoGo years... So, if you can build it up before you want to retire, that is great. But if you are closer to retirement and the two year reserve isn't fully funded, you have something to talk about with your financial advisor...
By following the RRSP meltdown strategy, I find that while I am drawing down my registered accounts, my non registered dividends are being reinvested. Thus, I am able to take advantage of dips in the market
well put - So much vague information on how to optimize income in retirement - Parallel does a great job explaining it and better yet, putting a plan in place for us in retirement - Thanks
Hi Adam, 3yr of cash flow = at the very minimum 130-140K$ just to survive... That is a fair amount of $$ to put in low return investments. As for CPP, I am 63 now so it is becoming irrelevant but what I would like to see is this: If one takes CPP at 60 and invest this in TFSA and RRSP (between $758.32-$1,364.60/M) lets take 1K$/M so 12K/yr so 7K$ in TFSA and 5K$ in RRSP. In that scenario making an average 6% on the investments+dividends and re-investing that money for 5yr between 60 to 65 yr old. That person made more $$ than waiting to start CPP at 65yr old. Is my calculation wrong? Oh and if that person's die at 66 year old his/her partner receives that 6 yr of money instead of 1.
We aren’t retired yet and we still have that fear! We have some time to work on switching our mindset before we are there. We also won’t retire until we feel comfortable that our money will outlast us. We hear you on groceries as there are 5 of us in our household. 😊
You probably won’t have 5 persons in your household when you’re actually retired. Just 2 of you. Plus the time to meal plan. So groceries will go down. Older people actually eat less over the age of 70.
Adam- Great video again and I admire your relentless messages to encourage clients delay their CPP/OAS benefits . You mention that OAS/CPP are like a defined benefit pension plan. One thing that I'd add to that comparison is, DB work pension plans can be maxed by working longer (example 35 yrs of service for Fed Govt Workers)... but many Fed Employees decide to collect their work Defined Benefit Pension plan early too. So is that a financial mistake to take your work DB pension early? If it's like taking your CPP / OAS benefits early? I'd be interested to hear anyone's thoughts.
I retired at 32 years and have zero regrets. I could have made more by working to 35 years but in my case it was not good for my mental or physical health. I honestly thought working longer in that environment could shorten my life. If I’d been happy maybe I would have stayed but very specific to my own particular situation I would have also missed those big indexing jumps of 6.3 and 4.8 percent. Not likely to ever see that again.
What do you mean by taking it "early" ? Not working for 35 years or being subject to a permanent pension penalty for early retirement ? Different scenarios. BTW, the average federal public servant retires with just over 25 years of service. Almost no one does 35 years.
@@flaviousmaximus3484 - for a large # of Fed Govt Employees, 35 yrs of service will result in the maximum defined benefit pension (70% of best 5 yrs of salary). Taking it "early" refers to employees leaving Fed Public Service prior to the maximum 35 yrs of service. Thus having a "reduction" or some call "penalty" to their defined benefit pensions. Therefore, my comment to the video is.. if we think of taking CPP/OAS a few yrs before the maximum collectable amt, then is that similar to a Fed Employee taking their pension prior to max 35 yrs of service. Not sure if that answers your questions Flaviousmaximus3484
Hi Adam, I do have a question you could do a video on. That is: Why do I pay taxes in my TFSA? Dividend MICROSOFT CORP CASH DIV ON 25 SHS REC 05/16/24 PAY 06/13/24 NON-RES TAX WITHHELD MSFT:US - - 25.73 Canadian dollars$25.73 T: Jun. 13, 2024 S: Jun. 13, 2024 Canadian dollarsCAD Tax MICROSOFT CORP MSFT:US - - Negative 3.86 Canadian dollars-$3.86 Cheers, a.
When you say not to take CPP before 70, and melt down your RRSPs, I assume that you also mean, "Melt down your RRSPs and use them up first because they are not guaranteed investments, are not pegged to inflation rises, and are the most variable and volatile income source that one has"......???????
My biggest fear is dying with too much money left over. I did a Monte Carlo Analysis and in more than 75% of the calculations it runs to 100 (the last age I did a calculation for) with an average of 100’s of thousands left over. I need to spend more earlier on.
My fear isn't running out of money but not having enough. I want to live freely in retirement. If I want to travel somewhere or buy something, I dont want to feel limited. Unfortunately, my savings will not allow me this freedom, especially since I want to retire early. Suppose I can't have my cake and eat it too.
I plan to retire at 70. I’ll get maximum CPP maximum OAS and 33 years pension from my job so I calculate I should be getting 120,000 a year to till I die. I’m gonna do everything I can to stay healthy into my old age and keep them paying for as long as possible
My mother is 95 living in long term care home, she spends just over $3000/ month. This draws down her cash by about $12,000/ year. She was very fortunate that her and my dad had a modest house which was sold , this cash funds her short fall. Cheers
I am lucky to have two DB pensions from the UK and will get full UK state pension from 67. If i take CPP and OAS at 65, i will get 60% of full benefit. I can probably delay that as i will have a substantial RRSP to draw down until i am 80. By then, my TFSA should have grown sustantially to see my days out.
You might want to check your uk pensions; the way the uk is going you might want to see if you can pull your money sooner than later, lots of companies and councils are broke
Most do not get anywhere near the max CPP. The average is ~750 so by deferring for Joe average he might get another 300/mo - not gonna make a huge difference.
At 62 , I'm retiring later this year. Working until 65 only gains me about another $250 a month on CPP. Not worth staying at a stressful job another 3 years , Imo. No big debts allow me this move.
@@garth217 I agree. Much better to try to supplement your cpp by a side job a few hours a week, than postponing and working longer to equal that , imo.
@ketodad Exactly. If you wait 5 years and get NOTHING from CPP the difference in my CPP is $500 bucks. 32 hours a month on a part-time job will net you $512 / month. And you get the benefit of getting out of the house, getting some exercise ( even if it's walking and standing) and you get the mental stimulation of interacting with people. Then again if you do the 8 hr a week and stop at 70 and you didn't collect CPP you still had the extra money the previous 5 years and then continue life long with the CPP increase. It a very personal choice but the other options are never exposed
$300 a month is absolutely a huge difference for many of those people who clearly didn't earn high incomes in their working life if they only get that much CPP. And in the meantime, they can take GIS while delaying CPP.
So there are So many people here that are living for the purpose of retiring. That's kind of sad. I've retired 3x now since age 54. I've been offered another opportunity for work just the other day..im considering it. I don't need the money i need to contribute still. Every one is different one size doesn't fit all.
Retired doesn't mean sitting around counting beans😀. I just do what I haven't have time to do when I was young and do what I like to do when I like to do them. I am still in go go phase so I traveling outside Canada 6 months/year in Winter. I don't work just volunteer when I am back in Canada in Summer.
Hello Adam... have enjoyed your informative videos for a while now. Very clear and helpful. Would love to see you do a video on capital gains... more specifically in regards to an aging parent trying to gift, donate their primary residence to an adult child. The house has been the primary residence of the parent since in was new. Add childs name to deed? Sell it to child for a dollar, or other low amount. Home roughly 150k new built... now valued $350k. Need guidance... as I expected many many folks do in Canada. Thanks for your consideration. This would be immensly helpful to thousands of Cabadians.
For us that were self employed for most our working life this whole CPP thing gets tossed on it's head. Many of us get next to nothing out of it because we set things up so we contributed very little into it. Why? Because it's a terrible plan. How do we know that? 1, it's forced and 2. it's run by government. If I'd had a choice I would have opted out of it right off the hop. There is more but I'll leave it there.
Have thought of this question a number of times during previous videos and figured I'd ask here. The 3 stages of retirement and a laddered income make perfect sense. Question though, have you ever put together plans and/or had client questions around a more gradual transition between stages rather than sudden transitions of thousands from 1 year to the next?
Great insights and solid advice. Thank you. Just a point of clarity on defined benefit pension plans though. I have one, but it is not indexed so my purchasing power declines every year with inflation. Huge difference between indexed and non-indexed DB plans. Fortunately, we also have a reasonable portfolio of dividend stocks within both registered and non-registered accounts. Most companies increase their dividend on a regular basis (at least the ones we own do) so this acts as a hedge against inflation. This cash flow from dividends also helps to alleviate concerns over market fluctuations too.
So I have a DBPP but haven't been able to save anything else. I am 55 and looking to retire at 60. If I am not drawing CPP early how do I bridge that money gap between 60 and 65? DBPP estimates $4200 before taxes. 8 years left on the mortgage?
Thanks for the advice. I have a question though: I understand the argument about taking CPP later but there a caveat in my mind: if you compensate with your investments, shouldn’t you also take into account the opportunity cost of depleting those first? I mean these investments will not grow if I cash them in.
I wouldn't worry about it. The last failure was 1996 and every failure prior was a small institution. Keep your money with a larger, well managed institution and you will be fine
@@scotbarlow213totally. The cdic just exists to make people feel warm and cozy about Canadian banks. And that’s just fine,it gives people confidence in our institutions which is arguably a good thing for the stability of our economy.
Adam, your food budget increased 400%! Ah I remember those days, when my kids were teens (8 years ago) we were spending $12,000/ year on groceries. Fast forward to today, we all still live in the same house and spend about $14,000 on groceries. The solution has been, my wife and I are now retired no prepared food enters our house almost everything is prepared at home almost zero processed food. Look at what you are buying, convenience costs money.
Oh we are the same, my wife cooks everything. Literally bakes the kids treats daily. But to buy quality costs a lot. Fruit and veggies are 3x what they were 5 years ago. Good meat has come down a bit from its peak, but we are paying close to $20 for a tenderloin steak now.
$3k-$10k. I know that's a big range, but will depend on your situation. $3k-$5k for a plan with no rentals or corporations. $5k-$10k+ if you have rentals, corp etc.
Adam and his team did a plan for my wife and me ~5 years ago and we have updated it as needed since then. Absolutely 110% best money we ever spent. We have a clear plan and we sleep well knowing where we are at, where we are going and how/when we will implement our plan when we retire at the end of next year. Did we initially think the cost was high? We sure did. But that knowledge and comfort we have now as a result is priceless. Adam and his team walk the walk and talk the talk. No one at Parallel Wealth paid me to say this 😊. Highly recommend them!
We have done this a lot. I would say the biggest thing is people still not spending enough early. Obviously everyone's situation is different, but that would be the most common feedback we have and see. Inflation has played a small role (less than you would think), but overall many plans we review from a decade ago have had to adjust to spending changes.
fear of running out of money based on partners death. My father in-law lost $1000 a month when my mother inlaw died. She was 85. So he's now living with us. My own father died at 61. Leaving my mother with a reduced income for retirement. Thus she had been with us 16 yrs. So DEATH of my wife is what feeds my fear of running out. So I'm planning.
God Bless all of you who plan on living to 110 a collecting these massive pension amounts. 😂 The REALITY is that we’re all one appointment away from bad news and dying. If you’re dependent on your government CPP & OAS then Good luck to you all! Keep working and deferring.😊🤞🏻
It’s difficult not to have this fear with the Liberal government in place. Taxes imposed on us will keep many working into their late 60’s early 70’s. Not by choice. God help you if you’ve saved money to buy a cottage because you have no defined pension plan and now are facing a larger capital gain. Canadians can not get ahead. This is why many are leaving the country
I've been watching these videos for years. Not everything applies to my situation, but I am more confident about the different possible scenarios.
You have been commenting for years too, and we much appreciate it
Recovering from heart ❤️ surgery. Thanks for all the well wishes. I am in a long recovery now. Parallel Wealth showed me how I could retire at 58. 😊
All the best Johnny!
Get well soon! ❤
Happy you did well.. now get out and Live your best life!
We deferred our CPP & OAS to age 70, I get max CPP, my wife 80% and we both get max OAS. We started them both last year and combined we have very nearly 70K a year coming in from just those pensions guaranteed and indexed for as long as we live, they will never run out for as long as we are alive. This is why I think all this focus on the CPP (and OAS) "break even point" is just a distraction when the idea is to plan such that you don't have to worry about income for as long as you live. If you end up getting more money by deferring then great, statistics say that you likely will though of course none of us are a statistic, but if you die early then is how much you managed to squeeze out of CPP really going matter to you?
My pension is currently $78,000 / yr. It will drop to 68 k at 65 years of age. It's indexed as well. CPP at 63 replaces the drop 2 years later..so I'll get $24000 before I even have to consider using CPP. I'll be in OAS clawback. I haven't even considered my wife's CPP or investments. I've only managed to save $200,000 in cash, so I should be good with my RRSPS
@@garth217 I suppose I should have mentioned that my wife and I don't have pensions outside of CPP & OAS. Clearly if you have a good employer DB pension plan your retirement future is more secure.
Excellent strategy, indexing also!
@ddavidson5 thanks for the reply. I find it odd that delay of CPP is being sold as the end all and be all. But in fact it's best for a specific group of folks. Everyone circumstances are different. I ve ask Adam multiple times to do a video on DB pensions but nothing yet.
@@garth217 I imagine most people (obviously not you) with good DB pensions don't bother much with these types of information videos and blogs. The bulk of their retirement income plan is organized by their employer and the rest (CPP, savings, etc.) is working around the edges, they probably don't need to pay for a service such as Parallel Wealth. Adam has done one or two videos on CPP for those with a good DB pension and whether it's a good idea to take CPP when the DB bridge benefit ends, most people with a bridge benefit do and I don't blame them, it's the simple solution but it might make some sense to take it at a different time. Again most people would need to pay someone to figure that out and at the end of the day it's probably only a relatively minor difference. Basically those without a DB pension (the majority I would say) are on their own with a lot more decisions to make and errors to avoid so they are the biggest group of retirement income information seekers. As someone without any DB pension the decisions we make around CPP & OAS do make a big difference for our long term retirement income security. It really can make or break your retirement.
It’s great how well you explain things! Clear, articulate, helpful and friendly, while also lively. Thank you!
Wow, thank you!
Your CPP & OAS are only “there for you” if YOU are there to receive them. So it is an individual decision for each person, between getting a lower amount now, while you are still here and healthy enough to enjoy it OR deferring these income streams based upon the belief you will still be around and able to enjoy the income years into the future. No single right answer. Individual decision which each person has to accept responsibility for. I took my CPP at 60 and have hugely enjoyed spending every cent of it every month since ! 😊
Good plan if you don't have any RRSP savings. But if you do, you are better to consume the RRSP savings and let CPP grow at a significantly higher rate and take final CPP income with low risk of default or market crash.
Good points. One thing to consider is what does making that two year reserve mean for when you can retire?
I agree you want to make sure you want to be prepared and you don't want to not be able to do something during the GoGo years...
But if you are thinking that you need to continue working in order to fully fund that two year reserve, that time continued working is eating into your active GoGo years...
So, if you can build it up before you want to retire, that is great. But if you are closer to retirement and the two year reserve isn't fully funded, you have something to talk about with your financial advisor...
By following the RRSP meltdown strategy, I find that while I am drawing down my registered accounts, my non registered dividends are being reinvested. Thus, I am able to take advantage of dips in the market
well put - So much vague information on how to optimize income in retirement - Parallel does a great job explaining it and better yet, putting a plan in place for us in retirement - Thanks
Hi Adam,
3yr of cash flow = at the very minimum 130-140K$ just to survive... That is a fair amount of $$ to put in low return investments.
As for CPP, I am 63 now so it is becoming irrelevant but what I would like to see is this:
If one takes CPP at 60 and invest this in TFSA and RRSP (between $758.32-$1,364.60/M) lets take 1K$/M so 12K/yr so 7K$ in TFSA and 5K$ in RRSP. In that scenario making an average 6% on the investments+dividends and re-investing that money for 5yr between 60 to 65 yr old. That person made more $$ than waiting to start CPP at 65yr old. Is my calculation wrong?
Oh and if that person's die at 66 year old his/her partner receives that 6 yr of money instead of 1.
We aren’t retired yet and we still have that fear! We have some time to work on switching our mindset before we are there. We also won’t retire until we feel comfortable that our money will outlast us. We hear you on groceries as there are 5 of us in our household. 😊
You probably won’t have 5 persons in your household when you’re actually retired. Just 2 of you. Plus the time to meal plan. So groceries will go down. Older people actually eat less over the age of 70.
@@rachellekennedy1664 Absolutely. 😊
Thanks Adam! Our countdown to retirement is on. Hopefully sooner than later 😊
This is one of your best video's, Adam. Very important points
Adam- Great video again and I admire your relentless messages to encourage clients delay their CPP/OAS benefits . You mention that OAS/CPP are like a defined benefit pension plan. One thing that I'd add to that comparison is, DB work pension plans can be maxed by working longer (example 35 yrs of service for Fed Govt Workers)... but many Fed Employees decide to collect their work Defined Benefit Pension plan early too. So is that a financial mistake to take your work DB pension early? If it's like taking your CPP / OAS benefits early? I'd be interested to hear anyone's thoughts.
I retired at 32 years and have zero regrets. I could have made more by working to 35 years but in my case it was not good for my mental or physical health. I honestly thought working longer in that environment could shorten my life. If I’d been happy maybe I would have stayed but very specific to my own particular situation I would have also missed those big indexing jumps of 6.3 and 4.8 percent. Not likely to ever see that again.
What do you mean by taking it "early" ? Not working for 35 years or being subject to a permanent pension penalty for early retirement ? Different scenarios. BTW, the average federal public servant retires with just over 25 years of service. Almost no one does 35 years.
@@flaviousmaximus3484 - for a large # of Fed Govt Employees, 35 yrs of service will result in the maximum defined benefit pension (70% of best 5 yrs of salary). Taking it "early" refers to employees leaving Fed Public Service prior to the maximum 35 yrs of service. Thus having a "reduction" or some call "penalty" to their defined benefit pensions. Therefore, my comment to the video is.. if we think of taking CPP/OAS a few yrs before the maximum collectable amt, then is that similar to a Fed Employee taking their pension prior to max 35 yrs of service. Not sure if that answers your questions Flaviousmaximus3484
@@mikeb6459 yes, those 2 years of indexing were helpful
Hi Adam, I do have a question you could do a video on.
That is:
Why do I pay taxes in my TFSA?
Dividend
MICROSOFT CORP
CASH DIV ON 25 SHS REC 05/16/24 PAY 06/13/24 NON-RES TAX WITHHELD
MSFT:US -
- 25.73 Canadian dollars$25.73
T: Jun. 13, 2024
S: Jun. 13, 2024
Canadian dollarsCAD
Tax
MICROSOFT CORP
MSFT:US -
- Negative 3.86 Canadian dollars-$3.86
Cheers,
a.
When you say not to take CPP before 70, and melt down your RRSPs, I assume that you also mean, "Melt down your RRSPs and use them up first because they are not guaranteed investments, are not pegged to inflation rises, and are the most variable and volatile income source that one has"......???????
My biggest fear is dying with too much money left over. I did a Monte Carlo Analysis and in more than 75% of the calculations it runs to 100 (the last age I did a calculation for) with an average of 100’s of thousands left over. I need to spend more earlier on.
I'll gladly take a bit to help you 😜
Start spending! If you can't spend it all, then look to pass some early and transfer the tax liability to the ppl getting the money eventually anyways
My fear isn't running out of money but not having enough. I want to live freely in retirement. If I want to travel somewhere or buy something, I dont want to feel limited.
Unfortunately, my savings will not allow me this freedom, especially since I want to retire early. Suppose I can't have my cake and eat it too.
Retired at 54 60% DB pension. Close to 80 k a year. Get out when you can.
I'm not worried, I'm delaying my CPP until 90. Imagine how much per month it will be then! Rice and beans until then!
I can see them increasing it to age 75 one day soon!
90 😂 too bad you can only defer it to 70. My plan is to go for the max on it and defer it until I turn 70 with the hope of not needing it before then.
Thanks Adam! This is a perfect topic for an online course.
Great advice and articulation Adam..as always! Thank you
Thank you!
Well said!
I plan to retire at 70. I’ll get maximum CPP maximum OAS and 33 years pension from my job so I calculate I should be getting 120,000 a year to till I die. I’m gonna do everything I can to stay healthy into my old age and keep them paying for as long as possible
Not sure how old you are now but I would retired earlier. What if you die when your 71 ? Don't wait
Also don't forget OAS Clawback kicks in at approx. 90k income, so don't budget OAS into your income.
And what happens when you get cancer at 55?
So at 125 or so you get no OAS
After seeing my mother now well into her 90s, I do not think money needs to be a worry for Canadians in no-go years.
You are absolutely right and what I saw with my parents and grandparents. Most people spend little in their no-go years.
My mother is 95 living in long term care home, she spends just over $3000/ month. This draws down her cash by about $12,000/ year. She was very fortunate that her and my dad had a modest house which was sold , this cash funds her short fall. Cheers
@@waffles1caSi ca lui coute 3000$ par mois, ca ne doit pas lui coûter que 12 000$ par année…mais plutot 36 000
I am lucky to have two DB pensions from the UK and will get full UK state pension from 67. If i take CPP and OAS at 65, i will get 60% of full benefit. I can probably delay that as i will have a substantial RRSP to draw down until i am 80. By then, my TFSA should have grown sustantially to see my days out.
You might want to check your uk pensions; the way the uk is going you might want to see if you can pull your money sooner than later, lots of companies and councils are broke
Most do not get anywhere near the max CPP. The average is ~750 so by deferring for Joe average he might get another 300/mo - not gonna make a huge difference.
At 62 , I'm retiring later this year. Working until 65 only gains me about another $250 a month on CPP.
Not worth staying at a stressful job another 3 years , Imo. No big debts allow me this move.
@@ketodadif you work part-time 8hrs a week you make more on minimum wage
@@garth217 I agree. Much better to try to supplement your cpp by a side job a few hours a week, than postponing and working longer to equal that , imo.
@ketodad Exactly. If you wait 5 years and get NOTHING from CPP the difference in my CPP is $500 bucks. 32 hours a month on a part-time job will net you $512 / month. And you get the benefit of getting out of the house, getting some exercise ( even if it's walking and standing) and you get the mental stimulation of interacting with people. Then again if you do the 8 hr a week and stop at 70 and you didn't collect CPP you still had the extra money the previous 5 years and then continue life long with the CPP increase. It a very personal choice but the other options are never exposed
$300 a month is absolutely a huge difference for many of those people who clearly didn't earn high incomes in their working life if they only get that much CPP. And in the meantime, they can take GIS while delaying CPP.
So there are So many people here that are living for the purpose of retiring. That's kind of sad. I've retired 3x now since age 54. I've been offered another opportunity for work just the other day..im considering it. I don't need the money i need to contribute still. Every one is different one size doesn't fit all.
Retired doesn't mean sitting around counting beans😀. I just do what I haven't have time to do when I was young and do what I like to do when I like to do them. I am still in go go phase so I traveling outside Canada 6 months/year in Winter. I don't work just volunteer when I am back in Canada in Summer.
Hello Adam... have enjoyed your informative videos for a while now. Very clear and helpful. Would love to see you do a video on capital gains... more specifically in regards to an aging parent trying to gift, donate their primary residence to an adult child. The house has been the primary residence of the parent since in was new. Add childs name to deed? Sell it to child for a dollar, or other low amount. Home roughly 150k new built... now valued $350k. Need guidance... as I expected many many folks do in Canada. Thanks for your consideration. This would be immensly helpful to thousands of Cabadians.
There is no capital gains on a primary residence.
For us that were self employed for most our working life this whole CPP thing gets tossed on it's head. Many of us get next to nothing out of it because we set things up so we contributed very little into it. Why? Because it's a terrible plan. How do we know that? 1, it's forced and 2. it's run by government. If I'd had a choice I would have opted out of it right off the hop. There is more but I'll leave it there.
Have thought of this question a number of times during previous videos and figured I'd ask here. The 3 stages of retirement and a laddered income make perfect sense. Question though, have you ever put together plans and/or had client questions around a more gradual transition between stages rather than sudden transitions of thousands from 1 year to the next?
Ya there is a gradual transition. It's gives you a guide to what can be obtained. Then can transition from there based on needs and ability
Great insights and solid advice. Thank you. Just a point of clarity on defined benefit pension plans though. I have one, but it is not indexed so my purchasing power declines every year with inflation. Huge difference between indexed and non-indexed DB plans. Fortunately, we also have a reasonable portfolio of dividend stocks within both registered and non-registered accounts. Most companies increase their dividend on a regular basis (at least the ones we own do) so this acts as a hedge against inflation. This cash flow from dividends also helps to alleviate concerns over market fluctuations too.
Yes, they are not all indexed. Something that needs to be mapped into your planning.
So I have a DBPP but haven't been able to save anything else. I am 55 and looking to retire at 60. If I am not drawing CPP early how do I bridge that money gap between 60 and 65? DBPP estimates $4200 before taxes. 8 years left on the mortgage?
Thx for the video. Always enjoy them.
If I plan to retire at 56, should i convert some of my RRSP to RRIF? Is there an advantage for doing that?
Thanks for the advice. I have a question though: I understand the argument about taking CPP later but there a caveat in my mind: if you compensate with your investments, shouldn’t you also take into account the opportunity cost of depleting those first? I mean these investments will not grow if I cash them in.
But there is an equal (and usually greater) opportunity cost at taking CPP early.
What I want to know is why is the CDIC insurance so low ? $100,000 is not enough......
I wouldn't worry about it. The last failure was 1996 and every failure prior was a small institution. Keep your money with a larger, well managed institution and you will be fine
@@scotbarlow213totally. The cdic just exists to make people feel warm and cozy about Canadian banks. And that’s just fine,it gives people confidence in our institutions which is arguably a good thing for the stability of our economy.
Just spread you money over multiple accounts if you are worried about that. I think they can even be in the same institution.
Adam, your food budget increased 400%! Ah I remember those days, when my kids were teens (8 years ago) we were spending $12,000/ year on groceries. Fast forward to today, we all still live in the same house and spend about $14,000 on groceries. The solution has been, my wife and I are now retired no prepared food enters our house almost everything is prepared at home almost zero processed food. Look at what you are buying, convenience costs money.
Oh we are the same, my wife cooks everything. Literally bakes the kids treats daily. But to buy quality costs a lot. Fruit and veggies are 3x what they were 5 years ago. Good meat has come down a bit from its peak, but we are paying close to $20 for a tenderloin steak now.
What does a retirement plan cost on average?
$3k-$10k. I know that's a big range, but will depend on your situation. $3k-$5k for a plan with no rentals or corporations. $5k-$10k+ if you have rentals, corp etc.
Adam and his team did a plan for my wife and me ~5 years ago and we have updated it as needed since then. Absolutely 110% best money we ever spent. We have a clear plan and we sleep well knowing where we are at, where we are going and how/when we will implement our plan when we retire at the end of next year. Did we initially think the cost was high? We sure did. But that knowledge and comfort we have now as a result is priceless. Adam and his team walk the walk and talk the talk. No one at Parallel Wealth paid me to say this 😊. Highly recommend them!
Can you look at a plan that you provided 15 years ago and show how the plan was adjusted over the years to cover the different changes?
We have done this a lot. I would say the biggest thing is people still not spending enough early. Obviously everyone's situation is different, but that would be the most common feedback we have and see. Inflation has played a small role (less than you would think), but overall many plans we review from a decade ago have had to adjust to spending changes.
Running out of health.
fear of running out of money based on partners death. My father in-law lost $1000 a month when my mother inlaw died. She was 85. So he's now living with us.
My own father died at 61. Leaving my mother with a reduced income for retirement. Thus she had been with us 16 yrs.
So DEATH of my wife is what feeds my fear of running out. So I'm planning.
God Bless all of you who plan on living to 110 a collecting these massive pension amounts. 😂 The REALITY is that we’re all one appointment away from bad news and dying. If you’re dependent on your government CPP & OAS then Good luck to you all! Keep working and deferring.😊🤞🏻
How do most of you guys still make profit? Even with the downturn of the economy and ever increasing life standards
Please educate me. I've come across this name before. Now I am interested. How can I reach her?
You need to talk to Mary Jane Ticklemaster. She helped me build a deck, gazebo and wood burning pizza oven.
@@mikeb6459 Miss Terri Tootnrun taught me how to leave it all behind.
1st to comment. Thanks for the video Adam!!
Boom!
It’s difficult not to have this fear with the Liberal government in place. Taxes imposed on us will keep many working into their late 60’s early 70’s. Not by choice. God help you if you’ve saved money to buy a cottage because you have no defined pension plan and now are facing a larger capital gain. Canadians can not get ahead. This is why many are leaving the country