With all this retirement talk lately...

[Salmonidstalker]

The returns I've seen over the past few years would disagree with you. The only times you see a loss is when you actually pull the money out..

At some point that money has to come out. I'm not saying that you're right or wrong, the stock market just doesn't really interest me, even if the returns are fruitful. It wouldnt sit right with me at night.

Edited December 3, 2014 by VXP

[irishfield]

As I pointed out.. the idea is for the money to come out ONLY after you have stopped making an earned income. So you draw from your RRSP's at the lowest tax rate available and if possible not above the basic personal deduction so you pay NO tax on it.

[Garnet]

I'm waiting for my 6th correction of 20 % or more. I did panic the first time the other 4 I made out like a bandit.

 

VXP 2 things you are in the stock market every day of your life. Weather you pay cash or credit if you buy anything you are in the markets.

 

And the 5 major banks have paid Div. every year for 175 years strait, not much to worry about.

[Big Cliff]

Realestate and in particular waterfront if you know what you are looking for is probably one of the best investments you can make. The big thing about waterfront is they aren't making any more of it. Places like the Kawarthas are growing and will continue to grow. When you have people selling their houses in the GTA for $650,000.00 + and looking for a place to retire on the water, well, they have the money to spend.

 

In my case, one of my pensions went by by leaving us with a lot less to live on than we expected to have. We do have a lot of equity in our home but don't want to use any of that until the time comes that we need it.

 

Fortunatly for me I love working and doing things. I was fortunate to find a job that I love, I can work when I want to, play when I want to, and the extra money I make from working pays for all the extras that we enjoy.

 

We also rent out our basement apartment to students every fall to spring, the income from that pays our taxes and utilities as well as some of the up keep.

 

I haven't had much success with the financial planners, Sue invested a bunch of money with one and basically lost almost all of it. I also invested through our bank, after 4 years I had slightly less than I had invested and I decided I wasn't going to be able to retire on that so I pulled it out.

 

Most of all, don't give up everything today for what you might have tomorrow, live for today look forward to tomorrow.

[Salmonidstalker]

As I pointed out.. the idea is for the money to come out ONLY after you have stopped making an earned income. So you draw from your RRSP's at the lowest tax rate available and if possible not above the basic personal deduction so you pay NO tax on it.

Yes I understand fully how RRSP's work, and for some they make sense but I personaly do not want the government in control of my money with the fear that if I ever needed it one day, I would be slammed with taxes. Just my opinion and don't really fault anyone for investing their money that way. To each their own.

[irishfield]

What ever makes you comfortable VXP.. that's all that matters. BUT.. if you put it in this year to defer the taxes..even at 51% as a highest earner.. and you need that money next year for something real important and you're still working. You're still only going to pay the same 51% on it.. so nothing has been lost. You only gain if you can leave it there until you are in a lower tax bracket or not making money at all.

Edited December 3, 2014 by irishfield

[bigbuck]

So just how exactly is the government in control of your RRSP?? Are they in any more control of that any more tthan anything else, your home, your bank accounts, etc.... how else is the average Joe going to be able to save enough money to retire?? CPP and OAS will put food on the table and pay some bills but is no where near enough to get by. Not everyone has a job with a generous pension or works for the government. You have to do something to be able to retire.

[captpierre]

Lots of good advice.

 

LIVE WITHIN YOUR MEANS

 

Pay yourself first. Save 10% first. Automatic withdrawal, Live on 90%.

 

Get out of debt. Highest interest rate debt first.

 

RRSPs if you will be earning less money after retirement than now. -there will be a tax advantage.

Some financial advisors recommend interest earning investments in RRSP

 

Stocks outside of RRSP ( capital gains will be taxed at at 50% when sold rather than in RRSP where taxed at 100%)

 

Max out TFSA

 

AVOID equity (stocks) mutual funds. Way too expensive . You will pay 2-2.5% per year on the total amount whether they go up or down.

60% of these funds don't beat the exhanges (TSX, DOW, Nasdaq etc) because of these fees. You can buy theses exchanges thru ETFs (Exchange Traded Funds) for .05%. No research and analysts to pay for.

 

My concern is, the whole world economy is deeply in debt and fragile.

Some say there is a huge collapse coming in the future.

It might get ugly. Like money is worthless.

Food. Land. Maybe gold.

In the mean time, you have to be in the stock market. Interest accounts don't even cover inflation.

 

Work hard. Don't get sick. Fish more. You'll be good

[Old Ironmaker]

Is it just me or does anyone else not believe in rrsp's and the stock market. To me, putting your money out there without anything tangible to attach it to doesn't sit well. You'd better be prepared to lose it all at any given time.

That would be me. Never put a penny in RRSP's because of the rather good, at the time and still hanging on company pension plan that at one time was funded at above 100% currently at 89%, so if it was to be wound down tomorrow I would see a 11% loss that is offset by taking the early CPP pension. I have been retired 15 years and have not missed any meals, believe me. I needed every penny of cash I could get my hands on to invest in properties. Whether a rental or flip. We were flipping before there were reality shows showing how to do it. Believe me we had to learn through our mistakes.

 

Not all debt is bad, if I have to pay a slightly higher than prime rate to see cash to buy more " good deal" properties to sell at 12% or more above the interest as aim ROI, so that's good debt. Eventually that interest is no longer overhead unless that money can get a greater return elsewhere and a low interest loan is secured for purchase. There were times we had to buy material or pay a specialty tradesman on a credit card, well that's what had to be done. High interest loans will kill you yes, but some debt is the price of doing business.

Edited December 4, 2014 by Old Ironmaker

[Old Ironmaker]

Live at home with your parents and save as much as you can. Your twenties should not be about partying, but for saving. Don't get credit card debt. Almost 19% interest would kill anybody.

Live with Mommy and Daddy until you save as much as you can? Man your kidding, tell me your kidding.

[irishfield]

Doubtful Old Iron.. some just can't be weaned off the teet ! I left home at 17 and never looked back. Wonder if my parents were ever thankful for that! LOL

[Old Ironmaker]

The key is getting out of debt as soon as possible. I'm 32 and I've never bought anything if it wasn't in cash, including my house, my boat and my cars. It's probably my European background. I'm completely debt free and what a load off it is not to have the mortgage payment every month, car payment every month etc. Im also a saver. I sacrifice a lot but what I get in return is much greater and deeper than having more STUFF.

 

Add up your interest amount on your house, your car and everything else you need a loan for and you'll probably see that you are working for the bank not yourself.

 

If you have debt, get rid of it and you'll see that retirement will not only come sooner, but the load off your shoulders while getting there will make a huge difference in your overall happiness.

 

Debt.......that is the killer.

 

I guess to add to this is that I am not retired so, I can't really add the advise of those that are there; however, I think I'm headed in the right direction. Can't imagine how hard it must be for young families out there with kids, a never ending list of bills, a mortgage, and car payments. At the end, very little must be left.

In the end what is left? Family that's what's left. But at 32 you get a pass because you don't get it yet.

[LostAnotherOne]

The only person happier then myself when I bought my house was my dad. He was probably saying to himself "Out you go and don't come back". lol

[Old Ironmaker]

The only person happier then myself when I bought my house was my dad. He was probably saying to himself "Out you go and don't come back". lol

If's not too personal a question how old were you when you had saved enough to move out. Just talked to a pal about a fishing pal of his and it came to light both this guy and his brother still live at home, 57 and 55 years young. What!

[BillM]

If's not too personal a question how old were you when you had saved enough to move out. Just talked to a pal about a fishing pal of his and it came to light both this guy and his brother still live at home, 57 and 55 years young. What!

 

Wowzers.. I was out of the house for college and never returned, not like the offer wasn't open but I was working while in college and had a fulltime gig the day I graduated. Sure I had to slum it a bit, but that's all apart of growing up. Some people still living at home in their late 20's and 30's blow my mind.

Edited December 4, 2014 by BillM

[irishfield]

My father died when I was 24... I already had a wife and 2 kids. I guess I could have moved back in... lol

 

Yah I know Steve.. none of this is helping you!

Edited December 4, 2014 by irishfield

[Moosebunk]

Can't help either... really do know little of investments... especially those for the long term. But that said, great thread to read through.

 

 

Do believe though, (for maybe some other's reading) that it doesn't hurt when you're young to invest in an education or skill that has "actual" job prospects, even if that maybe means incurring some extra debt on top of debt already existing. Get working, make better money, and sock some of it away for the old and grey.

 

 

And don't make it all about the end game either... there's plenty space in the middle you won't get back, and plenty things you won't be physically able to do despite finally having the time and money to do so.

[Garnet]

Learning about investment that can be held in your RRSP and your TFSA is a huge subject.

 

So read Wealthy Barber and look up Idiot Millionaire Derek Foster his 1st 3 books are very good for building foundation.

 

The last couple he moved to options. There's money to be made in options but it takes a big time commitment and lot's of computer time.

 

Remember to send twice the time researching investments .

 

Canadian Money Forum is a good DIY investing site. Has a good real estate thing to.

[BillM]

Canadian Couch Potato is another good site if you want to do some reading.

[Sharkbait22]

That's some good advice from Moosebunk. It can be a tough balance between doing something you want to do and doing something that will land a job.

 

I'm in my 40s but can appreciate that times have changed for young adults. It certainly doesn't seem as easy to get a job early in life, raise a family, and stick with the job for life. This is even more true if you can't or don't want to move e.g., out to Alberta. Most kids these days would love that opportunity to get "life" started early. Kids graduate (if they take the post 2nd route - which too many do likely) with a lot of debt and don't even have a job, perhaps no car. Free government money (grants) for education is largely a thing of the past. University and college tuition is very expensive.. Most of this is not relevant to the OP and I'm not entirely certain of what I've written - just trying to understand things. I have a preteen.

[MrSimon]

I work in the financial world ... specifically related to retirement savings/investments. I know a thing or two.

 

We can talk for hours about where/how to invest .... good debt vs bad debt .... tax laws .... etc etc etc.

 

But there is one simple rule that almost everyone ignores.

 

STOP SPENDING YOUR MONEY!!!!!

 

If you are willing to sacrifice a bit and get creative, you can EASILY live on half of what you bring home and save/invest the rest. It's amazing how fast it adds up if you don't have car payments, credit card debt, cable bills, cell phone bills, etc. You can save TONS by eating at home, buying used clothes, quitting smoking, quitting drinking, etc etc.

 

Most people aren't willing to make those sacrifices ..... but then again they are the ones in their early 60's complaining that they don't have enough money to retire.

[SirCranksalot]

 

 

STOP SPENDING YOUR MONEY!!!!!

 

 

 

Simple, but not easy. A bit like how to lose weight:"Just don't eat anything you like"

[BillM]

 

Simple, but not easy. A bit like how to lose weight:"Just don't eat anything you like"

 

If it was easy, everyone would be doing it

[chris.brock]

I work in the financial world ... specifically related to retirement savings/investments. I know a thing or two.

 

We can talk for hours about where/how to invest .... good debt vs bad debt .... tax laws .... etc etc etc.

 

But there is one simple rule that almost everyone ignores.

 

STOP SPENDING YOUR MONEY!!!!!

 

If you are willing to sacrifice a bit and get creative, you can EASILY live on half of what you bring home and save/invest the rest. It's amazing how fast it adds up if you don't have car payments, credit card debt, cable bills, cell phone bills, etc. You can save TONS by eating at home, buying used clothes, quitting smoking, quitting drinking, etc etc.

 

Most people aren't willing to make those sacrifices ..... but then again they are the ones in their early 60's complaining that they don't have enough money to retire.

 

 

The Wealthy Barber is likely 200 pages. MrSimon just said it in a paragraph.

 

Live below your means, spending doesn't equal happiness.

Set up a monthly investment plan as early in life as possible. Invest in quality funds.

[Steve]

great advice....and great participation....no worries for the little side tracks, lol.

 

Gerritt, was in the office today and checked up with HR on my plan.

 

I too am in a base DB plan, which is based on my pay grade.

 

Then I contribute on a DC plan, in which the company matches, but only to a certain % based on annual salary. I double checked and I'm paying in the DC plan enough to ensure I'm getting my company to match their full 50%.

 

It sucked that I took 25K from my RRSP savings to buy my home, but I'm of course already well into paying that back.

 

I keep a low credit card balance (<$1K), and don't have a line of credit.

 

I see the point of sacrifice, for sure. I just cancelled my personal cell phone. Wife still has one....but I'm done with those evil things.

 

I wish I could have paid cash for my house...that is quite an achievement!!!

 

again, thanks for the advice...I did find out my company has a 90 plan.

 

age + years of service = 90 and you get retirement.

 

For me that works out at age 58.

Edited December 4, 2014 by Steve