When Can I Retire (Safely)?
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- čas přidán 4. 07. 2024
- Anyone can retire any time they want. But doing it safely is a whole different ball game.
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Planning software we use: Conquest www.conquestplanning.com/en-c...
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DISCLAIMER: All videos on this channel (including this one) are for educational or entertainment purposes only. They are not (and are not intended to be) financial, investment or legal advice. It is our firm position that everyone has a unique situation and should seek professional advice on how best to navigate it. Rhys Martell is a Chartered Investment Manager (CIM), a Fellow of the Canadian Securities Industry (FCSI), a Qualified Associate Financial Planner (QAFP) and more. However, he is not registered to provide investment advice and, therefore, does not provide specific investment recommendations. Those looking for specific investment advice should seek out a registered professional.
Very well done and nicely explained video. This shows if you are single you are always at a disadvantage when you want to retire early. The software that you are using is pretty awesome. Great content...!!!!
Thank you! And you’re right. Higher expenses and less OAS and CPP.
Just wanted to say how impressed I am with your content.
Oh wow! Thanks :)
Another way to improve the retirement score is to adjust lifestyle. My wife and I plan to enjoy certain luxuries for one year then live very modestly the next. We enjoy travel but we don’t feel we want to do this every year. Lifestyle adjustments can help with huge financial benefits.
Absolutely!
I was thinking the same thing! Really, a lot of this comes down to the lifestyle choices you want in retirement. $5K/month to me is quite a bit of $$, especially considering she has no debt to service. I prepared a spreadsheet to capture my monthly expenses and then calculated my monthly income (dividends) to help with understanding my margin of safety in retirement. Found it very helpful.
I’m going that route: travel one year and enjoy the memories while raking leaves the next year. Check on the budget, if possible, more travel the next year. Rinse, repeat.
Always excellent advise ! Thanks
Glad it was helpful!
Fantastic Video
I turn 60 in a couple of months and I REALLY appreciate this video.
I’m lucky in a lot of respects. I’m in good health, I like my job, and I’ve got a decent DB pension from my employer. So I’m planning to work to 70 and hold off on CPP/OAS until then…
I’d rather have a short comfortable retirement.
Great video!
I watch all your videos religiously. They help me a lot. I'm 40 yrs old and with your expertise I paid off my mortgage early. All the population of Canada should subscribe to your channel. You deserve millions of subcribers. Thank you
Oh. Wow. Thank you!
Another consideration would be for her to tap into home equity for her later years. Either with a formal or home-grown reverse mortgage maybe? Taps out the estate, but there was no mention of her needing to pass assets along to anyone.
Very good point. Totally an option.
My lesson from seeing my mother in a seniors home is that her monthly fees are based on her income. She gets exactly the same care as someone who pays twice as much based on their higher income. Having a larger income in her later years is of zero benefit.
@@Cancionera40 I really hope you're not advocating killing old people.
I doubt it would have zero benefit. That's nonsense. Having more money is ALWAYS better.
@@rickallen9099 She eats the same meals, same room, prescription drugs part of rent, can participate in all programs. Where is the benefit to her?
Seeing the same thing!
@@rickallen9099 Not zero benefit, overall. Her 'ability' to pay helps fund those in the same home that do not.
how many people later in retirement find their money running out and then downsizing expenses before it is too late and still end up with a happy retirement although not what was originally imaged based on the baseline built on working year lifestyle.
Hey Rhys - love your channel!
The software platform you use - is there a ‘lite’ version that is available for consumers? Thx
Thank you!
Sorry, there isn’t. It’s only available via advisors.
What about buying a property in Moncton(NB) between 300-400K pay cash, rent it for $2200/Month, will that extra income will allow her to make up for the shortfall
Someone sitting on that kind of money not including oas an 80% cpp as well as a pension - shouldn’t have any problem surviving.
I don’t see interest on her saved money, is that included as well.
And if she owns her own condo, what is she currently spending 5 grand on a month.
Susie patusie needs a shake.
Yup. Balanced portfolio earning north of 5%.
Exactly ✅
Exactly. If she owns, no mortgage, she shouldn't be spending $5K/month. Big point that isn't addressed in this video.
@@rickallen9099
Exactly Rick a huge financial point totally overlooked in this analysis.
Honestly if someone with $5,000 monthly net income is blowing anywhere near that amount each month there is a psychological issue in play. Typically an addictive spending disorder of some sort. And there’s actually a name for it. Compulsive Buying Disorder is tightly associated with excessive or poorly managed urges related to the purchase of the items and spending of currency in any form; digital, mobile, credit or cash. Four phases have been identified in compulsive buying: anticipation, preparation, shopping, and spending. Alcohol, drugs or even a shopping addiction. Counselling would be advised.
Never forget the operating cost and spending side of any financial plan. 🤓
Crazy...and really kind of depressing, but all the numbers make sense. I was thinking at the start at the video that the extra $1k pension she was getting from her previous employer was her golden ticket and give her the breathing room she needed - guess not. Tell Suzie if she really wants to retire and not have to work again that she needs to find a friend so she can cut her living expenses in 1/2 :) Thank you for the video.
Thank you! And you’re right. Way harder (expense-wise) for singles.
How do you know she's going to live until 90? Who gave you that crystal ball? She could live to 100. So from 90-100 she's going to be in poverty? You need to address longevity risk. And also, did you mention if she's a renter or owns property in the video? If she owns property, there is no reason her expenses should be $5K/month for single person. With no mortgage to pay, those expenses should be way lower unless this bitch lives like a rock star @@wellbuiltwealth
I think with no debt $5k a month after tax is way more than most will need. Her condo probably costs her $1k a month, so she has $4k to live on. One month of reading books instead of travel and she’s got an extra $2k to add to next month’s kitty. I dunno, sounds like an ambitious budget.
Is this software program available (or a similar version of it) that we can download to play around with?
Sorry. It’s not.
Came across this video randomly as it applies to us. We are 68 years old and still working part time. We probably won't run out of money as our assets are over $4.5 M to date. I'm actually delaying SS until 70 for the bigger check. Our hangups right now are the fear of inflation, recession, and the possibility of WWIII if Iran and US go at it. Our portfolio is well diversified but would take a huge hit in a stock market crash. So whatever net wealth you have is never enough in an unstable environment. The other big hangup is getting out of the savings/investing mode and moving into a spending mode when we do fully retire.
If no db pension, lifetime payout annuity.
It takes a lot of savings to achieve a reasonable annuity payment, but it is a great option for those that can afford it.
I wonder if reducing her life expectancy to 85 (which is the average for a women in Canada) if the numbers would be closer to 100%
It would definitely get it closer. We usually start with 90 as a base case just to be conservative. But in practice, we let our clients choose the age they want us to plan to.
This video makes no sense. You did another video with a couple who had 500k and wanted 7k/month and they were in much better shape. In fact, downsizing their home to get an extra 300K put them on easy street.
Totally different situation in that video. They retired at 65 and had two sets of OAS and CPP. In this video she is retiring much earlier. Huge difference.
@@wellbuiltwealth They were also looking at retiring at 59 in the beginning. Yes they have more CPP/OAS but there are 2 of them with a correspondingly larger budget. In some scenarios, there were shortfalls but nowhere as drastic.
Agreed. The math does not work. 🙈
This lady didn't want to downsize though.
If she goes from a 500k condo to say 300 it obviously opens up other options.
@@kenp4464 She had almost 800K even without her condo. Both scenarios are kind of "unreasonable". She wanted 6K after-tax. Her current income is 80K. A target of 90% of your working salary is a bit nuts, especially with early retirement. But for the couple, they are aiming for 3.5K per person which is too low considering they are leaving behind a legacy of more than 2M. So a better apples-to-apples comparison would be that they all aim for 4.5K/person (so 8-9K for the couple). Then we can say whether they all have enough to meet their target.
At 55, can I transfer a portion of the funds from my LIRA onto my TFSA? Would this be a reasonable thing to do?
A LIRA has both a minimum and a maximum annual withdrawal limit. You can of course withdraw from your LIRA, pay the tax, and contribute to your TFSA but the withdrawals from the LIRA will be constrained to the min and max. Depending on your province you may be able to unlock some of your LIRA and move it to an RSP.
@@James_48 In 4 years, I can unlock half.
@@James_48 Thank you for your reply.
@@Pkeats817 for sure. But remember if you unlock half to an RSP and choose to withdraw it for whatever purchase you may incur an outsized tax bill that is not to your advantage so plan the withdrawals accordingly. One option to consider is taking some December 30 and some January 2nd but you still have to take a close took at total income and average tax rate.
@@James_48 Yes, right. I would be interested in in transferring to a TFSA, I think.
Simple real life answer : When you have NO loans /mortgages etc... to bleed you dry.
If Alberta leaves CPP, retiring safely might have to be tweaked 😐
Yeah, hard to say what the implications will end up being.
Client name: Mr. E. Novel
I’m embarrassed that it took me a minute to get this one 🤦♂️
Recently came accross your vids. You explain things every well and don't seem to just be pushing for subscribers and views to pad your own pocket book. A couple of your vids have already changed the way I'm looking at retiring.
Gotta say one thing though. Look at this example, Suzie Badoozie ( hope she excusses my bad spelling of name =) ) she has tons of money and investments, or course she's going to be fine.
It would be really nice to see a more real life scenario, of " Brad Thedrag " with modest to lower end resources. The people that really need some good ideas are those people, not richy rich of the world.
I do really appreciate your vids as you explain things really well.
Thank you! And I hear you. It’s on the agenda. Coming very shortly :)
Coolio. =) Thanks for replying. @@wellbuiltwealth
This analysis make no sense.
$5,000 net income per month? With no debt? No consideration of her investments increasing? No consideration of the condo she owns appreciating? $700,000+ saved should generate $70,000 year invested wisely. $5,000 month income, at that rate she can save a few thousand dollars every month. Suzie an alcoholic, gambler or taking a trip somewhere every month? Suzie needs some serious Dave Ramsey spending/budgeting advice. 🙈 🤔
The real question is….Why does the Canadian government discriminate against single people to the tune of billions of dollars? Every year? 😮
Yup. Condo appreciating. But as stated in this video, she had no interest in selling it. Also as stated in the video, she has a balanced portfolio for her investments. So it’s generating north of 5%. So yeah, all factored in. Maybe she has a different idea of what she wants her retirement to look like than you do? That’s the beauty of planning it out. It’s custom to you. You can shoot for whatever you like.
@@wellbuiltwealth
Yes understood she’s not moving and and average ROI.
The equally key forecasting variable is the other side of the equation - the monthly budgeting/ cost side. She has zero debt and with $5,000 coming in every month. Just where is all this money going anyway? Taxes, groceries, auto expenses, insurance, subscriptions, internet and gas cost nowhere near $5,000 a month for a single person without debt. $3,000 a month would be a high maximum average amount leaving $2,000 surplus every month. Again, who blows $5,000 a month every month? Dave Ramsey would fall of his chair hearing that! She needs a plan, and that plan is called a budget. 🙈
@@billyrock8305It’s her plan. Her money. HERS.
5k/month sounds perfect and gives some wiggle room. Not everyone wants to sit at home and garden or read. Good on her if she can afford to live life to her fullest
She doesn't need to spend $5K/month if she owns her condo, no mortgage. Susie needs to cut back on her hookers and blow habit @@wellbuiltwealth
He says, "let's make it chill and add an extra 5 years of part time work". Dude, there is nothing chill about working an extra 5 years. Wake up.
Sorry, I was sleeping.