Well done. Thank you. My wife just retired at 57. I’m 60 and I’m energized by the people I work with and clients I get to work with. As we’ve discussed the moment that passion goes then I will retire
Financial literacy is being added to the Ontario curriculum starting in 2025. Financial literacy, with a 70% pass requirement, will become a prerequisite course to graduate Ontario high school. A very positive development for all. As well, Home Economics is also being added.👍
Another point that doesn’t get mentioned is when people have kids. My parents had kids in their early 20s and were empty nesters by mid their 40s. They had 15 years to pay off debt and save and retired before 60. I’m 52 and was 40 when our 2nd son was born. I don’t regret my choices, but it does change things. Lots of my friends are in a similar situation, which means retiring in our 50s is unlikely. Great video. Keep them coming.
We waited a bit longer to have kids also. We wanted a nice house and a good neighborhood to raise them. Our last kid was born when we were both 37. We're now 59. My 27 year old son is moving out at the end of this month and our 22 year old is still with us. My plan had always been to downsize and retire at 55 but the reality is more like 61 or 62. So keeping the bigger house because of our adult kids obviously costs more money with the ever increasing costs of property taxes, utilities and insurance. Then there's the food. Kids do put retirement into perspective as we made a choice to have my wife stay home with the kids and live off my income. It looks like my daughter will be part of my retirement plans until she can afford to be on her own. I'll still downsize but not go as small as we had planned.
It also gives you more opportunities to plot money into saving when you’re young and take advantage of compounding interest. If I had had kids in my early twenties, I’d be in a much worse financial place now. I lived with roommates until my mid thirties, bought a house at 35 and now at 37, I’m in a great financial position to have a kid (although biologically it might be more challenging!).
First kid at 45, 2nd and last at 54 (same spouse). I’ll be 72 when the last one graduates high school, 76 if they take the college route. I enjoyed my young adulthood and regret zero (Eat dessert first is my motto). Retirement will likely be when no one wants to employ me. I saved a third of my income pre-kids, and am now fortunate to do that percentage again. My spouse, obviously younger, has 20 to 25 years worth of working before retirement. Hopefully it all balances out.
Addressing some of the smug comments here about how people must only retire if debt free, as if some kind of moral failing to do otherwise. I come from a very hardworking immigrant family, raised to live modestly and save. But now that I have a sibling with terminal cancer at 58, a mother who died in her early 80s, an aunt with terrible dementia at 83 and my own health issues, I have no desire to work until 65. My outstanding mortgage and HELOC are less than the price of an obnoxious SUV, but I am done with my 60-hour a week, high stress, very sedentary job. I want to hike, kayak, volunteer and just live. I tested living on a shoestring this past year, so i know it's doable. I don't think I am making the wrong choice.
Retired two years, I could have kept at it, but as you get older you start seeing a lot more people, friends and relatives not ever make it to retirement, If you love working that's one thing, but most of us as we age don't. Do what it takes to get some sort of income by 60 to 65, keeping in mind old age pensions will add to it. Also keep in mind, the lower your income the less tax you'll pay, and you no longer have all those deductions you once had... the money will stretch farther.
Single, started my pension contrutions at 25. Lived modestly, paid off my condo at 57 and the same year I retired in 2018. Sold my condo in the high priced Toronto market in 2021, and reinvested. Sold condo when I got a steal of a deal, in rent, still living in today. Maxed out my TFSA with condo sale, reinvesting interest in TFSA account, and maximizing my TFSA yearly top-up contributions. Will melt down my (non-registered) RSP (35K yearly) from 65 to 70. As I lose Bridge benefit at 65. Will of course continue to contribute yearly max to TFSA Delaying my CPP & OAS till 70. I so enjoy living modestly. Frugal? Can afford to live like a modest king LoL. The money I save(d) giving up the high cost of "Low living." The real fun I then experienced in life. Quitting drinking at 32 years old *30 years ago. And quit smoking shortly after!!! To think affording to *live modestly... I want to live in a self-contained "Van down by the River," with a Nationwide gym membership. Following the North American moderate Sun. 4 - 5 months each year in RV haven, sunny Arizona!!!
One reason for the difference between expected and actual retirement ages is that in many cases, retirement is something that people find happens to them unexpectedly. One reason is ill health (self or dependent). Also, I have heard about people (especially post Covid) who were close to retirement age and who were made redundant and could not find equivalent work.
US data showed the same trend. That’s why it’s important to reach financial independent in your 50’s, hopefully early 50’s. So you have the flexibility to work or not.
As Covid-forced retiree, it wasn't that my job went away but Covid in early 2020 followed by Long Covid made me unable to continue working. Many people get a buy-out or retirement opportunity and just decide to "go for it".
You forget to mention the 100's of thousands of people forced to choose between compliance with government mandates, their families, and their own bodily freedom. Legions of people were forced to leave the work force or leave their careers and many of those found ways or had to come to terms with never working again (officially) as a result.
My assumption is that there is a strong correlation between people feeling they need to work longer: and the decline in employer sponsored pension plans, the current interest rate environment increasing fear and uncertainty and the general decline in the better paying jobs such as manufacturing. BTW - great video. Really appreciate your research summary and analysis.
We live in southwestern Ontario. Both in our early 70's. Our combined income is almost 30.000. We own our house and we put all of our savings into this house. It is all ready to go for re-sale if we had to. We have 50.000 invested in safe stocks. Thats it. We have a very good quality of life. A lot of people are stubborn and think they can have it all until the end. We chose to down size and it paid off in spades. We don't owe a dime. 🙂🙃🙂🙃🙂🙃🙂🙃🙂
Well, my husband has internalized that 65 is the age of retirement. I think we can sell our home/cottage (possible equity if $500,000.00), and move somewhere cheaper. We can invest some of that equity into a TFSA (GIC). We have full room. He can literally build a home himself (I can be an assistant😊), and we are planning a 1000 square foot house outside of a city. In addition to that, we should have about $500,000.00 in RRSP/“LIRA” RRSP, so I think he can retire at 60, possibly less that that, but he won’t believe it’s possible. That’s only 6 years away. 🤞 Ps…we are trying to get fit, physically and financially, so we can make these goals come true. We have a couple of snowmobiles to be paid off and we need to do major renovations in our home that will only be funded through working!! We have a ways to go…but, I’m crossing my fingers it makes sense. Luck must come into play!
@@Pkeats817 hello! I’m giving it a shot, will fund my retirement for the next 5 years with my savings ( rrsp tfsa) and will start qpp and oas at 65 . According to the Canadian Gov retirement calculator all should be well , might get a part time job in the future but I just quit a very physically and mentally challenging job and I need a break! Turning 60 next week🍾
The set it and forget it mantra really does work well. I’ve been doing that since my twenties. Makes me more confident about our retirement going forward at 56.
@@freedomlife3623 I appreciate what you are saying and imagine that even a small amount of planning is be better than nothing. I'd also like to suggest that many of us pursue passions and adventures that provided great life experiences; also, many have to deal with the normal ups and downs (job loss or health challenges) that life throws at you - which can often place a great challenge and strain to any so-called planning. I live in Vancouver and rent - which is a whole other story with regards to expenses.
Great information again Reese. I think the difference between the average retirement age and the pre-retirement groups expectations of when they'll retire is due to the fact that pensions are becoming harder to come by and that saving for retirement is getting harder to do (high housing costs might be a big factor). I think the average retirement age of 59 will be going up in the next decade.
@@1966johnnywayne Over taxation can definitely put a damper on saving for retirement and also for those already retired. . Inflation is also the killer for those in the private sector that don't belong to unions who can extort more from taxpayers for big pensions and big pay.
Your self austerity can be applauded and I agree that consumerism is a major factor in saving for the future. But look at it this way. I bought my home in 2013 for 320000. 5% down. I am mortgage free in 48 months. My home today is worth around 700000. I couldn't afford to by my own home in today's prices. Something is wrong here.
@@1966johnnywayne Not sure where you've been, but the younger generation doesn't stand a chance to save while trying to pay their bills. I'm not overly wealthy but know when we're being screwed. I took my kids to Disneyworld every other year when they were young and now take at least 2 cruises a year. We also eat out once a week. Guess who I mostly see on the cruise ships? Retired government workers. They seem to be the only people who can afford it. It's not that they've scrimped and saved, it's because they have huge publicly funded pensions for life. I met an ex fireman from Ontario. His gov't pension is over $80 grand/yr. It's no wonder governments are broke. I have been focusing on retirement since the age of 18 while the present government would prefer me to keep working. I'll be retiring in 2 years at the age of 61 and most likely move to a more tax friendly country. Under the present regime, this country is fast becoming unlivable..
@@Redneckboy991 I mean everyone likes to gripe about taxation, but don't forget corporate profits are at an all time high, and that income growth has largely been reserved for the top 10% over the last 40 years. It is especially prominent in the 1%. Unionized workers getting a fair shake are not the problem here. Lack of private sector unions is. Remember that Canada's overall tax rate is at the OECD average. For the record I am a government worker (hospital lab) with a DB pension, maxed both my TFSA and RRSP. I work 50+ hour weeks in northern MB. My house will be paid off in 3 years (I've owned it for 3).
I will retire in the next 2 to 3 years, but will work 1 to 2 days a week in my profession and my husband as well as a buffer for delaying cpp. We are both fortunate to have small pensions which many don't and we feel so lucky to have.
At some point in your 50s you finally wake up and see your life passing you by. You may have thought "I have to work, I love work, I love my money" and then you change your mind and say "to heck with that, I want to appreciate my health, my life, my family/friends" etc. and you just pull the trigger and learn to live on less. And you look at your life a few years in and realize, I should have done this a few years ago. I started looking at retirement in Fall of 2020, during the height of Covid. I am now less than a year away from retirement at age 54. So many of my contemporaries are making the same move I am making (In their brains) and are going to spend a year or two getting the details worked out. I am ready and can't wait!
Here is a paradox: you decide to appreciate your family and friends more, you retire, but as it comes out they are all at work all day. So you are on your own, only now you have less money and nothing to do :)
I have friend who earns almost 50% more per year than what I do. She works all hours, insane really IMHO. I'm retiring this year at 63. We are both the same age, she says she has to work until 65 or longer. She used to say "I'll be found dead at my desk" until I started sending her your videos as well as Parallel Wealtg and directed her to the MyService Canada website retirement calculator. Hopefully she'll retire well before 70 and enjoy life. 🤞🏽
Depending when the stats are from...Covid. Many just retired. Don't want to go back to the office. Didn't spend any money for two years so more for retirement. Life is too short, get out when you can. Don't delay.
My guess about that 5.6 year difference between when people think they will retire and when they actually retire. I’m thinking about my colleagues, relatives and friends that are between ages 52 and 62. (1) Assumptions ! People don’t have a Financial Plan. (2) Very little idea of how CPP/OAS functions. It’s truly wonderful that you are educating Canadians!!
People have 45 working years to save. My friends with no savings have no one to blame but themselves. The moment they have cash it’s going to vacations, cars, and bars.
You big meany. That’s why we have the NDP to help those unfortunate people who chose to spend their savings. Redistribute wealth is the way say the Libs and NDP. Work hard and save and you will be punished. Relax and spend money and you will be rewarded. Don’t forget to vote for Trudeau and Singh to make the country so much better
Yes, but if you have a dead beat husband and end up raising two kids on your own, it is hard to save for the future. Can not colour people with the same crayon.
Of the way people save for retirement, I used 6 of them at one time or another. I think that is an important metric not measured. I retired when I calculated that working longer would not make me any better off. I retired at 58 and should have retired at 55. The drop in cash flow at retirement was less than the drop in expenses making me better off. Not mentioned was when people first understood how investing worked and when they actually started investing.
When people run scenarios and see their gross income being cut in half, they have to realize that a large chunk of that gross income is going to savings. That is why it is so important to look at the net amount being spent in your pre-retirement years and the after tax value of the projected retirement income. That is where you will find the gap to be so much less scary.
Personal experience is not finding work. I naively believed I had more value to offer with wisdom gained, but reality knocked me off Maybe some of it had to do with younger decision-makers with no comprehension of how much “older” people bring.
Many canadians are immigrants like myself. Their income is lower, and they have less if any retirement investments, along with fewer years of contributions to CPP. I'm not sure if survey addressed that.
I am an immigrant and my income is much higher than average. I have 2 DB pensions from my home country and will be entitled to a full state pension and a healthy RRSP and TFSA. My CPP and OAS will be about average but then I am not relying on them
@brassj67 lucky you. Our family income is higher than overage, but only one has a pension plan from work. We are supporting 2 university children, so I can only minimally contribute to RRSP. My CPP+OAS will be between 900-1000 $ only 😭, i was in shock when I've found it out. We will downsize and even move to another province, but I am very concerned about my quality of life during retirement.
@@annashulman4717how about having kids supporting their own high education? We all did when we went through university, learned many life lessons along the way.
@@freedomlife3623 they do partially, both work part time, but we give them a substantial buster. Son is in medical school and was denied a loan... we had to take a line of credit. He is our investment 🫠🙃.
@@freedomlife3623 My parents did support me, living at home and paying for my food. But all else I paid for. University was out of reach for me. Two years of community college, graduated during the recession of the early 80s. A year later I did get a job and worked continuously since then, retiring two years ago. And while my pay was not great, I still saved what I could and I now have more than I need.
Reasons expected retirement age doesn't match reality: Many people don't get to choose when they retire; either health problems or ageism in the workplace decide for them.
Imho, the whole "down with unions" movement was good for investors and bad for workers. Sure, a company could dovetail a db pension into wages without the need for pressure , but why would they.
When you (and the survey) talk about the differences between pre-retirees plans for travel, vs retirees actual travel, it’s important to consider the timing of the survey, and possible impacts on attitudes towards travel (safety, cost, convenience, etc) resulting from COVID. It’s not addressed, but I believe is an important factor that contributes to the findings.
Well this is interesting, I thought I was doing about average and happy that I think I should be able to retire in 6 years when I an 63 without a mortgage. Looks like I am doing much better than I thought compared to the rest of the population
My wife and I both retired at 60 in February. We have been mortgage free for 20 years, we used both our Father's inheritances to pay it off. We retired due to health issues and just both being sick to death of working in the current climate and mentality of today's human being. We both feel very at odds with today's mind set. We do not intend to take CPP or OAP until we are 65.
A lot of people probably retire earlier than planned because :1. Health issues 2. They might lose their job, and don’t want to start over after they’re 50+ 3. Maybe a significant sum of money is received through inheritance (I bet this doesn’t happen often) or 4. (mine and husband’s) burn out and tired of the soul sucking corporate world, and we can retire if we do less, freedom is better than more money
Number 2 and number 4 here. Tuning 60 this year. Have saved a life time, but looking to see if I need to leave this country and it's "leadership". He has said in clear terms we don't deserve what we worked for all our lives. Since he has proven it over and over. He hates this born and bread Canuck.
@@EKH8evil777that’s why there has been the highest number of emigrants in the countries history in the last few years. One of the reasons we sold up and left.
@@petewick8627 if you don’t agree with Canada’s values it’s better for all to see you gone. Good luck with your choices! History tells us those immigrants will pay dividends in tax revenue and growing the economy. Especially the second generation. That’s what will pay our oas and cpp. I am happy to see them.
All the complaining about high interest rates is strange if you’re on track to be able to retire you should have paid most if not all debt and should be making more on safe investments with the higher rates. Interest rates bad for the spender not the saver.
100K household used to be good money. Now if you have paid off house then 100K is comfortable. For people who are still in the work force, with that inflation, 100K is the new 50K.
How can you retire with debt? Maybe if you have a defined benefit pension but even then you will not be getting as much. Rule number one in retirement. Pay off debt first and then live within your means.
One thing to keep in mind is the difference between a regular worker and a government worker in how the pension works when retiring. Also too for government workers, i think you had to have started working betore 2013 to qualify for the pension bridge at 60. We started to practice financially living like we are retired since 2 years ago. I think we will be fine. Hubby still anxious.😅 Love the video.
pre retirees are not waiting for retirement to do big holidays/travel. they have more balance in their lives vs those of us raised by parents who lived thru the 30's and had the save, save ,save mantra drilled into us. Spending a chunk on "enjoyment" versus necessary item comes hard. The thought of the Taxman getting any dollar more than I can help is motivating me to make changes.
If you have a retirement portfolio managed by a financial institution, transfer it to a self managed broker and build/manage your portfolio of low cost index funds yourself. If done properly the savings could be huge. Most people are not aware of the high management fees that are killing their wealth.
Hello did u also take into consideration on those retirees who retired outside Canada where it can be cheaper to do so? I wonder if that will sustain the remaining retirement savings and if this is common now amongst people
Most people do not choose their retirement age. Retirement is foisted on them for two primary reasons; 1/ A health event that prevents someone from continuing to work and 2/ Laid off or let go from work. You reach a certain age where an event like this can not be recovered from easily. So it makes perfect sense that pre-retirees have a retirement age goal higher than what actually transpires. The best way to suss this out was with one further question of retirees: Was your retirement date planned or was it forced upon you. The implications here are significant. For those who were planning to supercharge their savings and pay down debt in the last five years of their planned working life - may find themselves retired earlier having not saved what they had hoped for. I was shocked at how little investments pre-retirees have available to them. There also should have been more gradations on the top end.. 9% is a big bunch of people with over a million... But, how many of those had more than $2 million or $5 million...???
Interesting point that most don’t take into account including myself is that I won’t be trying to save so much in the next couple years but instead, spending it. I keep thinking I will need to have the same income in retirement or maybe close to the same but in reality, I may need much less to do the same things I do now. My close friend who is retired told me that they don’t even need 50% of their pre retirement income and do well. So I don’t know where this 70 to 80% comes from. He said he would be living like a king if he was needing that much income. Guess I will jump into retirement and test out the water. Hope it’s warm. Thanks for the great video again!
Love this video. Thank you for posting. I have just started a very small TH-cam channel and doing a few videos on my retirement journey. Will add a link to this video for folks. Such great info! My channel is definitely not about financial planning LOL. I rely on the experts for that! However, I reference the importance of financial planning as an essential part of the process and this video is a great resource!
Thanks for this and other videos. People are retiring later as the population is healthy, not having defined benefits plans, thus saving more for themselves and living longer and due to the increased cost of living. I would appreciate info about single people regarding investing and retirement.
@@reefglider couples also have better treatment from the taxman. income splitting is a big benefit. taxation of a single person's income is unfair and needs to be revised.
You make the best videos on TH-cam! Been binge watching your content for some time and have to say thank you so much! I’m 36, based on info you’ve shared in this video I’m ahead of the game thankfully. Learned a lot about retirement info for my parents who have me tending to their affairs. I would really like to have you look over my financial info and plans for my early retirement to see if it’s realistic. Is this a possibility?
I planned to retire at 65 or maybe even 70 as I loved working but after a downsizing at age 59 1/2 and looking at at the future, I said hell no time to go! Seems I fit the stats perfectly
One reason for the difference could be pre-retire look at interest rates, cost of living and wonder about working longer to afford it. Right now I'm working on my pre and post retirement budget and I need to cutback somewhere. I'm still shooting for 60-61 ish.
Usually a divorce destroys a retirement plan. Mine saved me. A nothing to lose mentality stepped up and the increased risk funded an early retirement. Nothing wagered nothing gained. You live once. You miss all the shots u don't take. 😊
My divorce worked better financially for me, too! My ex-husband didn't like to save, just worked enough, as a self employed carpenter, to get by. We were always broke. I was a single mom, worked 7 days a week, and eventually got ahead. I received an inheritance at age 50, which allowed me to buy a house. At 72, he's still living that way, not saving money, living on CPP, OAS and GIS, and doing OK. I'm 70, still working part-time about 8 months of the year, really enjoying my job plus all my time off. I'm mortgage free, which I think is essential on a low income. I still save lots of money with an annual income of under $35,000. My investments are worth $170,000 now and growing every year, as I don't withdraw, so compounding. My little house is worth a lot now too. I live frugally, drive a great 20 year old Toyota Matrix and purchase very little. I feel fortunate.
I wonder if pre- retirees might focus on their savings and not consider the impact of CPP and OAS. I think many couples can bring in $35-$40k annually from these which can significantly reduce the reliance on savings. Taxes are often much lower in retirement with pension splitting as well as the pension and age credits. There is also generally no further saving for retirement, no mortgage payments etc so it becomes much easier than some might anticipate.
Good point. Assuming the maximum amount of CPP for a couple it is a great benefit. For those short on cash they might take CPP early, have reduced payments due to missed years, or be single. Actual Average CPP for new applicants at 65 is $9900/yr in 2024, and at 60 is $6300/yr. Plus $9k in OAS. However many (about half) people are getting less than the average.
55 this year with a DBPP ready and waiting(but penalized for taking it before 60). Kids in early 20s(one in university). 8 years left on the mortgage and desperately fighting the cost of living to get ready for retirement. Have some moderate RRSP contributions for my spouse. She is also 5.5 years younger than I am, obviously affecting her CPP and OAS draw dates compared to mine . Thinking about down sizing early to put some money away and replace a car before stepping away from work but am uncomfortable with what would be a loss in home equity. Go at 60? Don't really want to touch CPP early but??? Thoughts?
Would really like to see your analysis on the capital gain tax increase. Basically a tax on certain people's retirement, like family doctors. How is that ok?
My retention plan used to offer the retirement without penalty at 57 years old. It has been moved to 62 years old…. I guess other retirement plan did the same…. That could explain a part of the gap. People are also living older… therefore they plan to work more. It all makes sense to me!
This is the reason why 1/3 of Canadians are eligible for Guaranteed Income Supplement. This isn't going to be solved any time soon. What the government needs to do is to allow seniors to receive GIS while living abroad, many retirees want to live in warmer places, but also more affordable and they can't because their GIS will stop. Seniors living in Canada represent a major healthcare expense, if the government makes it easy for seniors to move abroad, seniors will improve their lifestyle and Canada will save money. It's a win-win situation.
Didn’t know person will lose GIS if they live abroad. Guess if people are making low income during working years, they actually have better living standard retired.
@@1966johnnywayne it's a form of communist wealth redistribution through taxes and gov borrowing that millenials actually vote for when they vote Trudeau/Gagmeat.
Financial Advisors say you need a million dollars to retire. But do you? If you own your home and it is in good condition that eliminates a huge expense a mortgage. No credit card debt is good too. No car payments either, especially electric car payments. After the kids leave home & the mortgage is paid, put the mortgage amount into your RRSP and TFSA. Also your health is important and your friends. Be in good health and have many REAL friends. If you worked in another country for 10 years or more you maybe entitled to a pension from there, add that to your Canadian pension and your savings of around 500K per family and you'll be OK.
Interesting survey results. Main culprit in poor retirement planning is a lack of financial eduction in secondary schools. Nobody should not be allowed to graduate high school unless they can pass a personal finance 101 and 201 exam. Misconception #1 is you need make a lot of money to retire a millionaire.
@@wellbuiltwealth When you can graduate high school and don't know how many minutes are in a quarter hour or how many dimes are in a dollar the bar is very very low.
@@wellbuiltwealth Its really crazy that parents don't teach their kids to be financially responsible. My parents were immigrants who came to Canada with nothing and couldn't speak English. They worked and saved. Learned the language. Brought up three children. We learned to save. If we wanted something we would save for it.
I'm 61. Working full time but only 4 days a week. The plan is to do this until 64, then scale back (because it is an option available to me) and work 1/3 to 1/2 less. CPP at 67. RRSP meltdown starts with a trickle as I begin taking less employment income. Planned out. Mapped out. Thing is, the thoughts of scaling back sooner are creeping in and there's a realistic option to retire sooner. I wonder if that's the case for more people since the stats show average expected retirement at 65 and actual retirement is almost 5 years earlier?
Unless you are a Federal or Provincial civil servant or in the MUSH sector you are entirely on your own. MUSH is Municipalities, Universities, Schools, Hospitals. Defined Benefit Pension Plan benefits paid in the Public Sector today are higher than the entire combined Private Sector pensions. That is despite the Private Sector being 4 - 5 times more employees. A huge disparity - we now have two classes of taxpayers - those public sector employees that can retire comfortably and those that are never secure.
Pre-retiree, I'm 56 and planning on retiring by 58. YES planning on selling(downsizing) home so I can fund my early retirement - once that $ runs out - will "activate" CPP
What would I do all day if I didn't work? Sometimes I worry that I'll just sit around all day - eat, sleep, walk the dogs repeat... This isn't something I look forward to. My retirement is fully funded and I could walk away tomorrow but I'm just gonna keep on working and saving.
Im in my low 50s with over 400k in my company pension plan my house is paid off i have no debt and o invest 75% of my current salary and im 11 years away from 65 hopefully I will be a millionaire before then hard work and sacrifice always pays off😂😂
On the topic of saving too much, I noticed a correlation with how I play video games. Again and again, I finish the game with WAY too much money, and should have bought better weapons and armour earlier on.
Interesting that no one is talking about the increase in cost of leaving. One or two decades ago, housing, food, transportation, etc were much cheaper than now. I am in my 50th and I fear that the next generation will have to work even longer to think about retirement....
I work with one guy in his 80's. I'm quite sure he couldve retire in our frield a long time ago, but I use him as fuel to not be here longer than I have to lol
It would be interesting to hear from working age people what they are doing to not have financial shortfalls like the people in the surveys do. What are their priorities now?
In addition to compounding, I'd bet part of the reason that retirees have bigger investment portfolios is inheritance. Chartered Professional Accountants of Canada estimate that $1 trillion will move generations through inheritance between 2023 and 2026.
Thank you for what you do.Good work. Question: What happens if you take the CPP and OAS at 65 and you still work full time and still pay CPP until 70's. No house. Some RRSP and TFSA? can you say what is good/wrong? Please and Thank you
Thanks! Unfortunately, I can’t advise without a real deep dive into your situation, but working past 65 and still contributing to CPP will lead to an even greater CPP benefit. Cheers
I could work until 65 (62 now) but the commute (37km each way) throughout the winter months on hilly farm country roads and that my job now has reduced responsibilities...meh. I'm gonna retire at 63 (this fall) thanks to a defined benefit pension plan and I took my CPP and have invested it in high interest TFSA and GICs. Done. Mike drop. On to happy frugal living for the remainder of my days.
I wonder if the 59 yr retirement is due to a combination of people realizing they have enough saved in general to retire early,along with those folks who maybe don’t have as much saved,but have just enough to get them to their government entitlements,so they retire due to health concerns. If that makes sense to anyone.🤔
I was wondering if some of the numbers presented were based on one persons income or combined. Both my wife and I have (and are) saving for retirement. We both have about the same amount saved. Closing in on sixty and feeling good about where we sit combined
It would be interesting to see how many people who have DB pension plans have "invested/saved" anything over and above their non-liquid assets (house, cars, etc.) Firstly, most of your RRSP room gets eaten-up by your DB plan, so that's gone right there and I suspect many just don't see the need with a plan that's essentially guaranteed and indexed to inflation.
Ok. Nothing, and yes that was the plan. Its great knowing that a steady monthly keeps appearing, and its some comfort to know that my spouse will get 2/3 of that upon my expiry ,until she kicks it. No savings to pass on to my kids tho.
we have a good db pension coming but have also invested.. rrsp was limited amount for sure but has grown over the years and tfsa are maxed. We also have non registered investments that have flourished with some luck (4-5 years from retirement now).
Man oh man. I've been ignoring this reality. I'm 51. I didn't even want to watch this video but I forced myself to do it. I need to start planning and stop hiding 😞
Spent much of my early adult life living under the poverty line as a new pilot in Canada. Then spent the next 9ish years making ‘ok’ money. Tried to find a balance between’now I can buy some desirables’ and thinking of the future. I’m now 56, earn about 150g with a small fam and a mortgage that should be over in 5 years. Am I fucked? I think I am, and plan to work until I drop dead. Sad life in the end. But hopefully my family will prosper once I’m gone.
Interestingly I belong to the average in terms on household income, but to the small 4% of those saving more than $30k. Probably I'll will be one of those spending too little in retirement. Not having a pension, having to rely entirely on savings, makes me particularly prudent. However, I think most Canadians in a situation like mine, or better, just spend too much money and save too little. We bought a home that just fits our needs, no luxury - I admit fortunately I live in Ottawa and not in Toronto, so I don't need a million dollars for a simple home. But we have one car only, which is already 13 years old. Rarely eating out. No unnecessary subscriptions. But I hope to retire around 60, so I save as much as possible. I would support higher mandatory CPP contributions, to ensure all Canadians have a sufficient pension based on their own contributions, taking risk out of their hands. Too many people don't save enough and/or gamble their retirement savings in stock picking. This society based on consumerism and chasing stock market growth is not healthy. Great videos though, thank you.
@@wellbuiltwealth It should be noted that at least 27% of the cohort are single person households. These households also likely make up both ends of the wealth distribution.
i have 1.2 million in property value with 400k owing. plus i have 250k invested in index accounts and am adding 12k a year to these investments. will my spouse and i be able to retire before we are 60?
This is Post War (Silent generation) & Boomers vs GenX, there is so much information written about why those generations are better off financially. Us Gen Xers have to work harder to maintain that lifestyle. And the same will be for all generations upcoming.
Well…currently in the go go go phase of our retirement. Have been in Spain for a month. Leaving next week for Portugal…also a month. Then on to Switzerland for the same. Have to leave Europe after that (stupid 90 day Schengen Zone rules) and haven’t decided where we’re going but England for September and Montenegro/Albania/Turkey October/November sounds good. Christmas in the Philippines and then January in Thailand and February in Vietnam. We met a Kiwi couple doing something similar to us and they invited us to NZ for March and I think we’ll take them up on it. Maybe head home in April to check up on our kids and check in with our friends. Wife is already saying she doesn’t want to stay home too long as we won’t have seen Morocco or Kenya or Italy or Greece or Sri Lanka or Argentina or Cambodia or… The funny thing is I was the one pushing for the World travel but she told me the other day that she’s having the time of her life. I’ve created a monster. 😂
Why does the age of soon to be retirees jump up so much? My guess is a combination of disappearing company pensions, higher home prices locking people out of a forced savings plan, plus recent inflation and pandemic job losses. Finally, imo society prioritizes saving and investing less and less over the decades. Capitalism has succeeded in normalizing debt and spending today in an endless chase to satiate our desires. When I was young, there was no amped up "Keeping up with the Jones'" social media, so I didn't.
Exactly. The notion of retirement commonly discussed today is a facade, a blip in human history, that is as likely to go by the wayside as not. Nothing permanent about it.
My husband has a pension and he is 58. He can retire at 60 but if he waits until he is 65 we will receive an extra $2,000/month. So we are on a 7 year count down. I on the other hand do not have a pension and am 57. I might retire at 60. I have to do the math.
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Well done. Thank you. My wife just retired at 57. I’m 60 and I’m energized by the people I work with and clients I get to work with. As we’ve discussed the moment that passion goes then I will retire
Becoming fiscally aware(and responsible) should be taught in high schools. Thanks for the video, Rhys. 😊
Financial literacy is being added to the Ontario curriculum starting in 2025. Financial literacy, with a 70% pass requirement, will become a prerequisite course to graduate Ontario high school. A very positive development for all. As well, Home Economics is also being added.👍
Basic math+ basic econ knowledge for kids means 0 votes for the left wing in the future. So no. And most of our teachers don't understand that anyway
@@alt9874 Everybody passes everything. Nobody is allowed to fail these days.
@@dcb113 - Not in Ontario high schools, only elementary school pushes you on regardless of pass/fail.
Another point that doesn’t get mentioned is when people have kids. My parents had kids in their early 20s and were empty nesters by mid their 40s. They had 15 years to pay off debt and save and retired before 60.
I’m 52 and was 40 when our 2nd son was born. I don’t regret my choices, but it does change things. Lots of my friends are in a similar situation, which means retiring in our 50s is unlikely.
Great video. Keep them coming.
We waited a bit longer to have kids also. We wanted a nice house and a good neighborhood to raise them. Our last kid was born when we were both 37. We're now 59. My 27 year old son is moving out at the end of this month and our 22 year old is still with us. My plan had always been to downsize and retire at 55 but the reality is more like 61 or 62. So keeping the bigger house because of our adult kids obviously costs more money with the ever increasing costs of property taxes, utilities and insurance. Then there's the food. Kids do put retirement into perspective as we made a choice to have my wife stay home with the kids and live off my income. It looks like my daughter will be part of my retirement plans until she can afford to be on her own. I'll still downsize but not go as small as we had planned.
Seems to be the norm now....having kids later in life.....if at all.
It also gives you more opportunities to plot money into saving when you’re young and take advantage of compounding interest. If I had had kids in my early twenties, I’d be in a much worse financial place now. I lived with roommates until my mid thirties, bought a house at 35 and now at 37, I’m in a great financial position to have a kid (although biologically it might be more challenging!).
First kid at 45, 2nd and last at 54 (same spouse). I’ll be 72 when the last one graduates high school, 76 if they take the college route. I enjoyed my young adulthood and regret zero (Eat dessert first is my motto). Retirement will likely be when no one wants to employ me. I saved a third of my income pre-kids, and am now fortunate to do that percentage again. My spouse, obviously younger, has 20 to 25 years worth of working before retirement. Hopefully it all balances out.
Addressing some of the smug comments here about how people must only retire if debt free, as if some kind of moral failing to do otherwise. I come from a very hardworking immigrant family, raised to live modestly and save. But now that I have a sibling with terminal cancer at 58, a mother who died in her early 80s, an aunt with terrible dementia at 83 and my own health issues, I have no desire to work until 65. My outstanding mortgage and HELOC are less than the price of an obnoxious SUV, but I am done with my 60-hour a week, high stress, very sedentary job. I want to hike, kayak, volunteer and just live. I tested living on a shoestring this past year, so i know it's doable. I don't think I am making the wrong choice.
Retired two years, I could have kept at it, but as you get older you start seeing a lot more people, friends and relatives not ever make it to retirement, If you love working that's one thing, but most of us as we age don't. Do what it takes to get some sort of income by 60 to 65, keeping in mind old age pensions will add to it. Also keep in mind, the lower your income the less tax you'll pay, and you no longer have all those deductions you once had... the money will stretch farther.
Single, started my pension contrutions at 25. Lived modestly, paid off my condo at 57 and the same year I retired in 2018.
Sold my condo in the high priced Toronto market in 2021, and reinvested. Sold condo when I got a steal of a deal, in rent, still living in today. Maxed out my TFSA with condo sale, reinvesting interest in TFSA account, and maximizing my TFSA yearly top-up contributions.
Will melt down my (non-registered) RSP (35K yearly) from 65 to 70. As I lose Bridge benefit at 65. Will of course continue to contribute yearly max to TFSA
Delaying my CPP & OAS till 70.
I so enjoy living modestly. Frugal? Can afford to live like a modest king LoL.
The money I save(d) giving up the high cost of "Low living." The real fun I then experienced in life. Quitting drinking at 32 years old *30 years ago. And quit smoking shortly after!!!
To think affording to *live modestly... I want to live in a self-contained "Van down by the River," with a Nationwide gym membership. Following the North American moderate Sun. 4 - 5 months each year in RV haven, sunny Arizona!!!
The 8th wonder of the world. The power of compound interest. Start early!!
One reason for the difference between expected and actual retirement ages is that in many cases, retirement is something that people find happens to them unexpectedly. One reason is ill health (self or dependent). Also, I have heard about people (especially post Covid) who were close to retirement age and who were made redundant and could not find equivalent work.
US data showed the same trend. That’s why it’s important to reach financial independent in your 50’s, hopefully early 50’s. So you have the flexibility to work or not.
As Covid-forced retiree, it wasn't that my job went away but Covid in early 2020 followed by Long Covid made me unable to continue working.
Many people get a buy-out or retirement opportunity and just decide to "go for it".
You forget to mention the 100's of thousands of people forced to choose between compliance with government mandates, their families, and their own bodily freedom. Legions of people were forced to leave the work force or leave their careers and many of those found ways or had to come to terms with never working again (officially) as a result.
My assumption is that there is a strong correlation between people feeling they need to work longer: and the decline in employer sponsored pension plans, the current interest rate environment increasing fear and uncertainty and the general decline in the better paying jobs such as manufacturing. BTW - great video. Really appreciate your research summary and analysis.
We live in southwestern Ontario. Both in our early 70's. Our combined income is almost 30.000.
We own our house and we put all of our savings into this house. It is all ready to go for re-sale if
we had to. We have 50.000 invested in safe stocks. Thats it. We have a very good quality of life.
A lot of people are stubborn and think they can have it all until the end. We chose to down size
and it paid off in spades. We don't owe a dime.
🙂🙃🙂🙃🙂🙃🙂🙃🙂
👍
I enjoyed that. Thanks. I think all the inflation and higher interest rates have waken up the pre-retirees to the new cost of a good retirement.
Well, my husband has internalized that 65 is the age of retirement. I think we can sell our home/cottage (possible equity if $500,000.00), and move somewhere cheaper. We can invest some of that equity into a TFSA (GIC). We have full room. He can literally build a home himself (I can be an assistant😊), and we are planning a 1000 square foot house outside of a city.
In addition to that, we should have about $500,000.00 in RRSP/“LIRA” RRSP, so I think he can retire at 60, possibly less that that, but he won’t believe it’s possible. That’s only 6 years away. 🤞
Ps…we are trying to get fit, physically and financially, so we can make these goals come true. We have a couple of snowmobiles to be paid off and we need to do major renovations in our home that will only be funded through working!! We have a ways to go…but, I’m crossing my fingers it makes sense. Luck must come into play!
I’m 59.7 years old and I can’t wait to retire. Watching this video helped me understand that I am in good shape. Thank you !
So, will you retire at 60?
@@Pkeats817 hello! I’m giving it a shot, will fund my retirement for the next 5 years with my savings ( rrsp tfsa) and will start qpp and oas at 65 . According to the Canadian Gov retirement calculator all should be well , might get a part time job in the future but I just quit a very physically and mentally challenging job and I need a break! Turning 60 next week🍾
@@marisapavan8615 Sounds like a plan!!! Happy Retirement!!
The set it and forget it mantra really does work well. I’ve been doing that since my twenties. Makes me more confident about our retirement going forward at 56.
Same here. Really don’t understand how people don’t plan for retirement and saving for it, then expect they can just retire well.
@@freedomlife3623 Education and informing themselves is key. They probably believe the government will look after them.
@@freedomlife3623 I appreciate what you are saying and imagine that even a small amount of planning is be better than nothing. I'd also like to suggest that many of us pursue passions and adventures that provided great life experiences; also, many have to deal with the normal ups and downs (job loss or health challenges) that life throws at you - which can often place a great challenge and strain to any so-called planning. I live in Vancouver and rent - which is a whole other story with regards to expenses.
Great information again Reese. I think the difference between the average retirement age and the pre-retirement groups expectations of when they'll retire is due to the fact that pensions are becoming harder to come by and that saving for retirement is getting harder to do (high housing costs might be a big factor). I think the average retirement age of 59 will be going up in the next decade.
Thank you! And I think you’re definitely onto a couple of the big factors.
@@1966johnnywayne Over taxation can definitely put a damper on saving for retirement and also for those already retired. . Inflation is also the killer for those in the private sector that don't belong to unions who can extort more from taxpayers for big pensions and big pay.
Your self austerity can be applauded and I agree that consumerism is a major factor in saving for the future. But look at it this way. I bought my home in 2013 for 320000. 5% down. I am mortgage free in 48 months. My home today is worth around 700000. I couldn't afford to by my own home in today's prices. Something is wrong here.
@@1966johnnywayne Not sure where you've been, but the younger generation doesn't stand a chance to save while trying to pay their bills. I'm not overly wealthy but know when we're being screwed. I took my kids to Disneyworld every other year when they were young and now take at least 2 cruises a year. We also eat out once a week. Guess who I mostly see on the cruise ships? Retired government workers. They seem to be the only people who can afford it. It's not that they've scrimped and saved, it's because they have huge publicly funded pensions for life. I met an ex fireman from Ontario. His gov't pension is over $80 grand/yr. It's no wonder governments are broke. I have been focusing on retirement since the age of 18 while the present government would prefer me to keep working. I'll be retiring in 2 years at the age of 61 and most likely move to a more tax friendly country. Under the present regime, this country is fast becoming unlivable..
@@Redneckboy991 I mean everyone likes to gripe about taxation, but don't forget corporate profits are at an all time high, and that income growth has largely been reserved for the top 10% over the last 40 years. It is especially prominent in the 1%. Unionized workers getting a fair shake are not the problem here. Lack of private sector unions is. Remember that Canada's overall tax rate is at the OECD average. For the record I am a government worker (hospital lab) with a DB pension, maxed both my TFSA and RRSP. I work 50+ hour weeks in northern MB. My house will be paid off in 3 years (I've owned it for 3).
While few retirees earn more than 100k, when you have no mortgage then life is good! My parents were in that no mortgage zone for decades.
I retired at 57 because of a DB pension and a small inheritance. I think many of us still had company or institutional pensions. 😊
I will retire in the next 2 to 3 years, but will work 1 to 2 days a week in my profession and my husband as well as a buffer for delaying cpp. We are both fortunate to have small pensions which many don't and we feel so lucky to have.
At some point in your 50s you finally wake up and see your life passing you by. You may have thought "I have to work, I love work, I love my money" and then you change your mind and say "to heck with that, I want to appreciate my health, my life, my family/friends" etc. and you just pull the trigger and learn to live on less. And you look at your life a few years in and realize, I should have done this a few years ago. I started looking at retirement in Fall of 2020, during the height of Covid. I am now less than a year away from retirement at age 54. So many of my contemporaries are making the same move I am making (In their brains) and are going to spend a year or two getting the details worked out. I am ready and can't wait!
Absolutely
Here is a paradox: you decide to appreciate your family and friends more, you retire, but as it comes out they are all at work all day. So you are on your own, only now you have less money and nothing to do :)
I have friend who earns almost 50% more per year than what I do. She works all hours, insane really IMHO. I'm retiring this year at 63. We are both the same age, she says she has to work until 65 or longer. She used to say "I'll be found dead at my desk" until I started sending her your videos as well as Parallel Wealtg and directed her to the MyService Canada website retirement calculator. Hopefully she'll retire well before 70 and enjoy life. 🤞🏽
Depending when the stats are from...Covid. Many just retired. Don't want to go back to the office. Didn't spend any money for two years so more for retirement. Life is too short, get out when you can. Don't delay.
My guess about that 5.6 year difference between when people think they will retire and when they actually retire. I’m thinking about my colleagues, relatives and friends that are between ages 52 and 62. (1) Assumptions ! People don’t have a Financial Plan. (2) Very little idea of how CPP/OAS functions. It’s truly wonderful that you are educating Canadians!!
Actually, there is a section in this survey that speaks to the lack of financial plans. So yeah, that’s definitely got something to do with it!
My partner at work can't afford to rent a room, he is renting a bed. What savings for retirement? Job no longer provides living.
Geesh, that’s rough.
That is not "work" then...
Move
Another great video! So interesting. Thanks for reading those 94 pages so I didn’t have to 😊
People have 45 working years to save. My friends with no savings have no one to blame but themselves. The moment they have cash it’s going to vacations, cars, and bars.
Unfortunately, that's true for many. Then they reach retirement age and complain they can't live on CPP.
You big meany. That’s why we have the NDP to help those unfortunate people who chose to spend their savings. Redistribute wealth is the way say the Libs and NDP. Work hard and save and you will be punished. Relax and spend money and you will be rewarded. Don’t forget to vote for Trudeau and Singh to make the country so much better
Many Canadians are totally screwed because the government pumped the housing market to the moon. The government has created a total mess.
Yes, but if you have a dead beat husband and end up raising two kids on your own, it is hard to save for the future. Can not colour people with the same crayon.
@@Brau93 You totally missed the point.
Of the way people save for retirement, I used 6 of them at one time or another. I think that is an important metric not measured. I retired when I calculated that working longer would not make me any better off. I retired at 58 and should have retired at 55. The drop in cash flow at retirement was less than the drop in expenses making me better off. Not mentioned was when people first understood how investing worked and when they actually started investing.
When people run scenarios and see their gross income being cut in half, they have to realize that a large chunk of that gross income is going to savings. That is why it is so important to look at the net amount being spent in your pre-retirement years and the after tax value of the projected retirement income. That is where you will find the gap to be so much less scary.
Personal experience is not finding work. I naively believed I had more value to offer with wisdom gained, but reality knocked me off
Maybe some of it had to do with younger decision-makers with no comprehension of how much “older” people bring.
Also elder workers usually demand higher pay than the young inexperienced workers.
Many canadians are immigrants like myself. Their income is lower, and they have less if any retirement investments, along with fewer years of contributions to CPP. I'm not sure if survey addressed that.
I am an immigrant and my income is much higher than average. I have 2 DB pensions from my home country and will be entitled to a full state pension and a healthy RRSP and TFSA. My CPP and OAS will be about average but then I am not relying on them
@brassj67 lucky you. Our family income is higher than overage, but only one has a pension plan from work. We are supporting 2 university children, so I can only minimally contribute to RRSP. My CPP+OAS will be between 900-1000 $ only 😭, i was in shock when I've found it out. We will downsize and even move to another province, but I am very concerned about my quality of life during retirement.
@@annashulman4717how about having kids supporting their own high education? We all did when we went through university, learned many life lessons along the way.
@@freedomlife3623 they do partially, both work part time, but we give them a substantial buster. Son is in medical school and was denied a loan... we had to take a line of credit. He is our investment 🫠🙃.
@@freedomlife3623 My parents did support me, living at home and paying for my food. But all else I paid for. University was out of reach for me. Two years of community college, graduated during the recession of the early 80s. A year later I did get a job and worked continuously since then, retiring two years ago. And while my pay was not great, I still saved what I could and I now have more than I need.
Reasons expected retirement age doesn't match reality: Many people don't get to choose when they retire; either health problems or ageism in the workplace decide for them.
2:56 - top 4 biggest risks! So true, the next generation are often missing on defined benefit pension plans and that’s sad.
Imho, the whole "down with unions" movement was good for investors and bad for workers. Sure, a company could dovetail a db pension into wages without the need for pressure , but why would they.
great video. what software is that, it doesn't look like snap or purefacts. thanks
When you (and the survey) talk about the differences between pre-retirees plans for travel, vs retirees actual travel, it’s important to consider the timing of the survey, and possible impacts on attitudes towards travel (safety, cost, convenience, etc) resulting from COVID. It’s not addressed, but I believe is an important factor that contributes to the findings.
Good point!
@@wellbuiltwealth Very good point. My travel went to zero for years for that reason.
Well this is interesting, I thought I was doing about average and happy that I think I should be able to retire in 6 years when I an 63 without a mortgage. Looks like I am doing much better than I thought compared to the rest of the population
My wife and I both retired at 60 in February. We have been mortgage free for 20 years, we used both our Father's inheritances to pay it off. We retired due to health issues and just both being sick to death of working in the current climate and mentality of today's human being. We both feel very at odds with today's mind set. We do not intend to take CPP or OAP until we are 65.
A lot of people probably retire earlier than planned because :1. Health issues 2. They might lose their job, and don’t want to start over after they’re 50+ 3. Maybe a significant sum of money is received through inheritance (I bet this doesn’t happen often) or 4. (mine and husband’s) burn out and tired of the soul sucking corporate world, and we can retire if we do less, freedom is better than more money
Point 4 all the way!!!
Number 2 and number 4 here. Tuning 60 this year. Have saved a life time, but looking to see if I need to leave this country and it's "leadership". He has said in clear terms we don't deserve what we worked for all our lives. Since he has proven it over and over. He hates this born and bread Canuck.
@@EKH8evil777that’s why there has been the highest number of emigrants in the countries history in the last few years. One of the reasons we sold up and left.
@@petewick8627 if you don’t agree with Canada’s values it’s better for all to see you gone. Good luck with your choices! History tells us those immigrants will pay dividends in tax revenue and growing the economy. Especially the second generation. That’s what will pay our oas and cpp. I am happy to see them.
All the complaining about high interest rates is strange if you’re on track to be able to retire you should have paid most if not all debt and should be making more on safe investments with the higher rates. Interest rates bad for the spender not the saver.
100K household used to be good money. Now if you have paid off house then 100K is comfortable. For people who are still in the work force, with that inflation, 100K is the new 50K.
Yup!
Early retirement can be corporate ageism (forced out early) or by health of the retiree or a close family member (spouse or an ageing parent).
How can you retire with debt? Maybe if you have a defined benefit pension but even then you will not be getting as much. Rule number one in retirement. Pay off debt first and then live within your means.
One thing to keep in mind is the difference between a regular worker and a government worker in how the pension works when retiring. Also too for government workers, i think you had to have started working betore 2013 to qualify for the pension bridge at 60. We started to practice financially living like we are retired since 2 years ago. I think we will be fine. Hubby still anxious.😅 Love the video.
Great Summary!
What do you feel will break this time?
pre retirees are not waiting for retirement to do big holidays/travel. they have more balance in their lives vs those of us raised by parents who lived thru the 30's and had the save, save ,save mantra drilled into us. Spending a chunk on "enjoyment" versus necessary item comes hard. The thought of the Taxman getting any dollar more than I can help is motivating me to make changes.
If you have a retirement portfolio managed by a financial institution, transfer it to a self managed broker and build/manage your portfolio of low cost index funds yourself. If done properly the savings could be huge. Most people are not aware of the high management fees that are killing their wealth.
Hello did u also take into consideration on those retirees who retired outside Canada where it can be cheaper to do so? I wonder if that will sustain the remaining retirement savings and if this is common now amongst people
Most people do not choose their retirement age. Retirement is foisted on them for two primary reasons; 1/ A health event that prevents someone from continuing to work and 2/ Laid off or let go from work. You reach a certain age where an event like this can not be recovered from easily. So it makes perfect sense that pre-retirees have a retirement age goal higher than what actually transpires. The best way to suss this out was with one further question of retirees: Was your retirement date planned or was it forced upon you.
The implications here are significant. For those who were planning to supercharge their savings and pay down debt in the last five years of their planned working life - may find themselves retired earlier having not saved what they had hoped for.
I was shocked at how little investments pre-retirees have available to them. There also should have been more gradations on the top end.. 9% is a big bunch of people with over a million... But, how many of those had more than $2 million or $5 million...???
Interesting point that most don’t take into account including myself is that I won’t be trying to save so much in the next couple years but instead, spending it. I keep thinking I will need to have the same income in retirement or maybe close to the same but in reality, I may need much less to do the same things I do now. My close friend who is retired told me that they don’t even need 50% of their pre retirement income and do well. So I don’t know where this 70 to 80% comes from. He said he would be living like a king if he was needing that much income. Guess I will jump into retirement and test out the water. Hope it’s warm.
Thanks for the great video again!
$100k for retiree..? I can only dream. Most of us have spent our way out of retirement . 😢
Love this video. Thank you for posting. I have just started a very small TH-cam channel and doing a few videos on my retirement journey. Will add a link to this video for folks. Such great info! My channel is definitely not about financial planning LOL. I rely on the experts for that! However, I reference the importance of financial planning as an essential part of the process and this video is a great resource!
Best of luck!
Thanks for this and other videos. People are retiring later as the population is healthy, not having defined benefits plans, thus saving more for themselves and living longer and due to the increased cost of living. I would appreciate info about single people regarding investing and retirement.
Agreed. Planning as a single person makes a huge difference. Couples can share many costs, like housing, internet, car, insurance etc….
@@reefglider couples also have better treatment from the taxman. income splitting is a big benefit. taxation of a single person's income is unfair and needs to be revised.
Hi. Your numbers? Before or after taxes? Thank you
You make the best videos on TH-cam! Been binge watching your content for some time and have to say thank you so much! I’m 36, based on info you’ve shared in this video I’m ahead of the game thankfully. Learned a lot about retirement info for my parents who have me tending to their affairs. I would really like to have you look over my financial info and plans for my early retirement to see if it’s realistic. Is this a possibility?
Well, thank you kindly! Feel free to check out our website to see if one of the options work for you: www.WellBuiltWealth.ca
Cheers
I planned to retire at 65 or maybe even 70 as I loved working but after a downsizing at age 59 1/2 and looking at at the future, I said hell no time to go! Seems I fit the stats perfectly
One reason for the difference could be pre-retire look at interest rates, cost of living and wonder about working longer to afford it. Right now I'm working on my pre and post retirement budget and I need to cutback somewhere. I'm still shooting for 60-61 ish.
Usually a divorce destroys a retirement plan. Mine saved me. A nothing to lose mentality stepped up and the increased risk funded an early retirement. Nothing wagered nothing gained. You live once. You miss all the shots u don't take. 😊
My divorce worked better financially for me, too! My ex-husband didn't like to save, just worked enough, as a self employed carpenter, to get by. We were always broke. I was a single mom, worked 7 days a week, and eventually got ahead. I received an inheritance at age 50, which allowed me to buy a house. At 72, he's still living that way, not saving money, living on CPP, OAS and GIS, and doing OK. I'm 70, still working part-time about 8 months of the year, really enjoying my job plus all my time off. I'm mortgage free, which I think is essential on a low income. I still save lots of money with an annual income of under $35,000. My investments are worth $170,000 now and growing every year, as I don't withdraw, so compounding. My little house is worth a lot now too. I live frugally, drive a great 20 year old Toyota Matrix and purchase very little. I feel fortunate.
@@susanitasandia5065 Glad to hear you are doing well. Not easy these days
@TripleDeano thanks
I wonder if pre- retirees might focus on their savings and not consider the impact of CPP and OAS. I think many couples can bring in $35-$40k annually from these which can significantly reduce the reliance on savings. Taxes are often much lower in retirement with pension splitting as well as the pension and age credits. There is also generally no further saving for retirement, no mortgage payments etc so it becomes much easier than some might anticipate.
Good point. Assuming the maximum amount of CPP for a couple it is a great benefit. For those short on cash they might take CPP early, have reduced payments due to missed years, or be single. Actual Average CPP for new applicants at 65 is $9900/yr in 2024, and at 60 is $6300/yr. Plus $9k in OAS. However many (about half) people are getting less than the average.
Great if your a couple. try being single.
You need 400-500k to compensate for the loss of income and tax credits when one spouse passes.
55 this year with a DBPP ready and waiting(but penalized for taking it before 60). Kids in early 20s(one in university). 8 years left on the mortgage and desperately fighting the cost of living to get ready for retirement. Have some moderate RRSP contributions for my spouse. She is also 5.5 years younger than I am, obviously affecting her CPP and OAS draw dates compared to mine . Thinking about down sizing early to put some money away and replace a car before stepping away from work but am uncomfortable with what would be a loss in home equity.
Go at 60? Don't really want to touch CPP early but??? Thoughts?
Would really like to see your analysis on the capital gain tax increase. Basically a tax on certain people's retirement, like family doctors. How is that ok?
It isn’t.
Or a large number of small business owners who chose to build businesses and employ people instead of funding an RRSP. It's a real [)!
My retention plan used to offer the retirement without penalty at 57 years old. It has been moved to 62 years old…. I guess other retirement plan did the same…. That could explain a part of the gap. People are also living older… therefore they plan to work more. It all makes sense to me!
This is the reason why 1/3 of Canadians are eligible for Guaranteed Income Supplement. This isn't going to be solved any time soon. What the government needs to do is to allow seniors to receive GIS while living abroad, many retirees want to live in warmer places, but also more affordable and they can't because their GIS will stop.
Seniors living in Canada represent a major healthcare expense, if the government makes it easy for seniors to move abroad, seniors will improve their lifestyle and Canada will save money.
It's a win-win situation.
Didn’t know person will lose GIS if they live abroad. Guess if people are making low income during working years, they actually have better living standard retired.
If you've lived 20 years as adult in Canada you don't lose OAS living abroad.
@@1966johnnywayne it's a form of communist wealth redistribution through taxes and gov borrowing that millenials actually vote for when they vote Trudeau/Gagmeat.
@@isaiah_b_3798 Correct, but seniors receiving GIS lose that part that can be large, especially if they have less than 40 years of residency.
@@freedomlife3623 not necessarily.
Financial Advisors say you need a million dollars to retire. But do you? If you own your home and it is in good condition that eliminates a huge expense a mortgage. No credit card debt is good too. No car payments either, especially electric car payments. After the kids leave home & the mortgage is paid, put the mortgage amount into your RRSP and TFSA. Also your health is important and your friends. Be in good health and have many REAL friends. If you worked in another country for 10 years or more you maybe entitled to a pension from there, add that to your Canadian pension and your savings of around 500K per family and you'll be OK.
Interesting survey results.
Main culprit in poor retirement planning is a lack of financial eduction in secondary schools. Nobody should not be allowed to graduate high school unless they can pass a personal finance 101 and 201 exam.
Misconception #1 is you need make a lot of money to retire a millionaire.
It’s really quite crazy when you think about how the fundamentals of finance aren’t taught. Really makes you wonder why…
@@wellbuiltwealth When you can graduate high school and don't know how many minutes are in a quarter hour or how many dimes are in a dollar the bar is very very low.
Highschools teach queer gender theory and critical race theory. Isn't that equipping our children for the real world?
@@wellbuiltwealth Its really crazy that parents don't teach their kids to be financially responsible. My parents were immigrants who came to Canada with nothing and couldn't speak English. They worked and saved. Learned the language. Brought up three children. We learned to save. If we wanted something we would save for it.
@@isaiah_b_3798Not why everything has to be either or. They can learn both.
I'm 61. Working full time but only 4 days a week. The plan is to do this until 64, then scale back (because it is an option available to me) and work 1/3 to 1/2 less. CPP at 67. RRSP meltdown starts with a trickle as I begin taking less employment income. Planned out. Mapped out. Thing is, the thoughts of scaling back sooner are creeping in and there's a realistic option to retire sooner. I wonder if that's the case for more people since the stats show average expected retirement at 65 and actual retirement is almost 5 years earlier?
I like your game-plan :)
I think you should rerun your plan with scaling back tomorrow and having more fun. I worked too long for little to no improvement in my situation.
Great video❤
Unless you are a Federal or Provincial civil servant or in the MUSH sector you are entirely on your own.
MUSH is Municipalities, Universities, Schools, Hospitals.
Defined Benefit Pension Plan benefits paid in the Public Sector today are higher than the entire combined Private Sector pensions.
That is despite the Private Sector being 4 - 5 times more employees.
A huge disparity - we now have two classes of taxpayers - those public sector employees that can retire comfortably and those that are never secure.
Great info!
Pre-retiree, I'm 56 and planning on retiring by 58. YES planning on selling(downsizing) home so I can fund my early retirement - once that $ runs out - will "activate" CPP
I think they keep adding zeros until you claim, but you do get to drop 8yrs or so of the lowest income between 18 and CPP-start.
What would I do all day if I didn't work? Sometimes I worry that I'll just sit around all day - eat, sleep, walk the dogs repeat... This isn't something I look forward to. My retirement is fully funded and I could walk away tomorrow but I'm just gonna keep on working and saving.
Travel to see the world 🌍
Im in my low 50s with over 400k in my company pension plan my house is paid off i have no debt and o invest 75% of my current salary and im 11 years away from 65 hopefully I will be a millionaire before then hard work and sacrifice always pays off😂😂
Gud fur u 😛
On the topic of saving too much, I noticed a correlation with how I play video games. Again and again, I finish the game with WAY too much money, and should have bought better weapons and armour earlier on.
Interesting that no one is talking about the increase in cost of leaving. One or two decades ago, housing, food, transportation, etc were much cheaper than now. I am in my 50th and I fear that the next generation will have to work even longer to think about retirement....
I work with one guy in his 80's. I'm quite sure he couldve retire in our frield a long time ago, but I use him as fuel to not be here longer than I have to lol
It would be interesting to hear from working age people what they are doing to not have financial shortfalls like the people in the surveys do. What are their priorities now?
In addition to compounding, I'd bet part of the reason that retirees have bigger investment portfolios is inheritance.
Chartered Professional Accountants of Canada estimate that $1 trillion will move generations through inheritance between 2023 and 2026.
Indeed. A ton of money being passed down.
Thank you for what you do.Good work.
Question: What happens if you take the CPP and OAS at 65 and you still work full time and still pay CPP until 70's. No house. Some RRSP and TFSA? can you say what is good/wrong?
Please and Thank you
Thanks! Unfortunately, I can’t advise without a real deep dive into your situation, but working past 65 and still contributing to CPP will lead to an even greater CPP benefit.
Cheers
Or after retirement some fears go away,to much fear mongering!
There is no downsizing your home nowadays.. the prices are ridiculous!
Plus no one builds smaller houses. You either downsize into a condo or nothing. And condos just aren't that great.
I could work until 65 (62 now) but the commute (37km each way) throughout the winter months on hilly farm country roads and that my job now has reduced responsibilities...meh. I'm gonna retire at 63 (this fall) thanks to a defined benefit pension plan and I took my CPP and have invested it in high interest TFSA and GICs. Done. Mike drop. On to happy frugal living for the remainder of my days.
I wonder if the 59 yr retirement is due to a combination of people realizing they have enough saved in general to retire early,along with those folks who maybe don’t have as much saved,but have just enough to get them to their government entitlements,so they retire due to health concerns. If that makes sense to anyone.🤔
Yup! The survey actually has a section on “why” people decided to retire.
@@wellbuiltwealthyou need to have a separate video on this topic. Thanks.
I think ideally 60-70 go-go, 71-80 slow-go, 80-max no-go.
I was wondering if some of the numbers presented were based on one persons income or combined. Both my wife and I have (and are) saving for retirement. We both have about the same amount saved. Closing in on sixty and feeling good about where we sit combined
Great video and very informative
Thank you!
It would be interesting to see how many people who have DB pension plans have "invested/saved" anything over and above their non-liquid assets (house, cars, etc.) Firstly, most of your RRSP room gets eaten-up by your DB plan, so that's gone right there and I suspect many just don't see the need with a plan that's essentially guaranteed and indexed to inflation.
Ok. Nothing, and yes that was the plan. Its great knowing that a steady monthly keeps appearing, and its some comfort to know that my spouse will get 2/3 of that upon my expiry ,until she kicks it. No savings to pass on to my kids tho.
we have a good db pension coming but have also invested.. rrsp was limited amount for sure but has grown over the years and tfsa are maxed. We also have non registered investments that have flourished with some luck (4-5 years from retirement now).
Yes, invested in RRSP as well...
They should at least invest in their TFSA and use it for big purchases in retirement.
I think everything you have said is a concern of everyone no matter what their age.
Man oh man. I've been ignoring this reality. I'm 51. I didn't even want to watch this video but I forced myself to do it. I need to start planning and stop hiding 😞
Yes, do it, the time is now and it’s so worth it!
It’s always good to have a fin-plan, I work with a professional planner, multi-market and fixed-income strategist.
Pensions are only paid once a month. I noticed that difference. Every month I notice it! Lol!
Bigger question is, how long will you live? No one knows, everyday is a gift.
Spent much of my early adult life living under the poverty line as a new pilot in Canada. Then spent the next 9ish years making ‘ok’ money. Tried to find a balance between’now I can buy some desirables’ and thinking of the future. I’m now 56, earn about 150g with a small fam and a mortgage that should be over in 5 years. Am I fucked? I think I am, and plan to work until I drop dead. Sad life in the end. But hopefully my family will prosper once I’m gone.
ya, your fucked, sad life to be sure, forget the family prospering you do you and live.
Interestingly I belong to the average in terms on household income, but to the small 4% of those saving more than $30k. Probably I'll will be one of those spending too little in retirement. Not having a pension, having to rely entirely on savings, makes me particularly prudent. However, I think most Canadians in a situation like mine, or better, just spend too much money and save too little. We bought a home that just fits our needs, no luxury - I admit fortunately I live in Ottawa and not in Toronto, so I don't need a million dollars for a simple home. But we have one car only, which is already 13 years old. Rarely eating out. No unnecessary subscriptions. But I hope to retire around 60, so I save as much as possible. I would support higher mandatory CPP contributions, to ensure all Canadians have a sufficient pension based on their own contributions, taking risk out of their hands. Too many people don't save enough and/or gamble their retirement savings in stock picking. This society based on consumerism and chasing stock market growth is not healthy. Great videos though, thank you.
Question: At 5:40, are the portfolio sizes based on per-household or per-individual?
Per household
@@wellbuiltwealth It should be noted that at least 27% of the cohort are single person households. These households also likely make up both ends of the wealth distribution.
i have 1.2 million in property value with 400k owing. plus i have 250k invested in index accounts and am adding 12k a year to these investments. will my spouse and i be able to retire before we are 60?
People may retire early for health reasons, or work stress, or because they have saved enough $ to retire early.
This is Post War (Silent generation) & Boomers vs GenX, there is so much information written about why those generations are better off financially. Us Gen Xers have to work harder to maintain that lifestyle. And the same will be for all generations upcoming.
Well…currently in the go go go phase of our retirement.
Have been in Spain for a month. Leaving next week for Portugal…also a month. Then on to Switzerland for the same. Have to leave Europe after that (stupid 90 day Schengen Zone rules) and haven’t decided where we’re going but England for September and Montenegro/Albania/Turkey October/November sounds good. Christmas in the Philippines and then January in Thailand and February in Vietnam. We met a Kiwi couple doing something similar to us and they invited us to NZ for March and I think we’ll take them up on it. Maybe head home in April to check up on our kids and check in with our friends. Wife is already saying she doesn’t want to stay home too long as we won’t have seen Morocco or Kenya or Italy or Greece or Sri Lanka or Argentina or Cambodia or…
The funny thing is I was the one pushing for the World travel but she told me the other day that she’s having the time of her life. I’ve created a monster. 😂
So awesome.
It is not fair that people who did not work in Canada have the same pension as a people who worked and paied tax in Canada. 😢
It is divorce and the recent increase in inflation, and supporting children that derails the expected date of retirement
Why does the age of soon to be retirees jump up so much? My guess is a combination of disappearing company pensions, higher home prices locking people out of a forced savings plan, plus recent inflation and pandemic job losses. Finally, imo society prioritizes saving and investing less and less over the decades. Capitalism has succeeded in normalizing debt and spending today in an endless chase to satiate our desires. When I was young, there was no amped up "Keeping up with the Jones'" social media, so I didn't.
i am a first comer and enjoy your videos
Since time immemorial, peasants don't retire. They die.
Exactly. The notion of retirement commonly discussed today is a facade, a blip in human history, that is as likely to go by the wayside as not. Nothing permanent about it.
What can we do with Rsps through work that have high fees when we retire?
Transfer them out!!
Can you kindly suggest some options?
We do a lot of business with Justwealth. Highly recommend you check them out :)
My husband has a pension and he is 58. He can retire at 60 but if he waits until he is 65 we will receive an extra $2,000/month. So we are on a 7 year count down. I on the other hand do not have a pension and am 57. I might retire at 60. I have to do the math.