Are you saving enough for retirement?

[DoubleF]

Originally Posted by Reaper

We're actually debt free aside from our mortgage.

I'll put it this way. $20K is a lot of money and so is $250-1000 a month. But people disregard it because they're not dealing with an extra 0 behind the number. Don't be embarrassed by it, figure out how it works and where the comfort lies for you. Many people over think it and/or overshoot it by stupid factors or give up before trying.

IMO $100K is something like a modest savings of 10 years at $10K a year. People say it's just slightly more than one years wages... but come on, not as a post tax raw savings and I'm talking modest, not opulence.

Focus on the 15 years instead and break the numbers into something that makes sense for you. Forget completely about investment for a sec and go with cash flow.

15 years = 180 months.

$1000 average per month = $180K in 15 years, no investment
$500 per month = $90K, no investment
$250 per month = $45K, no investment

$20K at 5% = approx $41,500 in 15 years.

"Worst case scenario", by age 65 you put "only" away $500 per month so the $90K (let's say average $45K) added another $40-50K over 15 years in modest investing. $90K savings over 15 years + $50K rate of return on the savings + $20K initial investment now + 20K rate of return on investment = $180K. Add CPP and OAS to that of $10-20K a year. That's a savings that can afford maybe $30K ish or so per year for living until approximately age 80 (drain your investments $10-15K per year for 12-20 years) when the investments run out and you're CPP/OAS only?

And you haven't consider downsizing your mortgage free house to unlock more cash plus a bunch of the and you haven't considered the mortgage free cash flow you can put away before you retire. You've got enough time, you'll be OK. How long are you going to live to? Vast majority of people have 20-25 max after retiring at 65.

More investments obviously will feel more comfortable, but don't tell yourself it's insurmountable if you have $20K, 15 years and a good attitude now.

Originally Posted by Reaper

I guess I need to make an appointment with our bank so we can set this kind of thing up. I really don't understand how to do even the basics like a TFSA and how you move money in and out of them. I'm financially illiterate.

If you do that appointment, set up a self managed TFSA account only. Don't even ask them to transfer money into the account (just ask if it's doable, but perhaps best for you to learn how to do that yourself as well) and DO NOT get them to invest for you.

Learn about your annual TFSA limit, but I assume you won't hit that for a long while.

You may not be financially strong, yet, but don't let learned helplessness stop you. Buying a stock on line isn't too much more difficult than paying a bill online. Learning curve might be a total of 3-5 hours only and then it's a life skill.

You got this.

[Muta]

Originally Posted by Fuzz

I meant to take a look at their robo-investing returns, how are they?

With a managed account, my RRSP is up 34% over the last two years. Management fee is 0.4% (rate is determined by the amount invested overall with WS in total). I'm happy; I may switch my TFSA to a managed account as well sometime soon. WS' platform is great for those of us with limited interest in this world, but want good management, low management fees and solid returns... just to set it and forget it.

[Fuzz]

Originally Posted by Muta

With a managed account, my RRSP is up 34% over the last two years. Management fee is 0.4% (rate is determined by the amount invested overall with WS in total). I'm happy; I may switch my TFSA to a managed account as well sometime soon. WS' platform is great for those of us with limited interest in this world, but want good management, low management fees and solid returns... just to set it and forget it.

I assume that includes deposits? According to this WS was 10.3% for the balanced portfolio, which under-performed QW and JW.

But how do its returns actually stack up against competitors? Over the past year, Wealthsimple's balanced portfolio returned 10.3%, lagging behind Questwealth's 13.54% and Justwealth's 14.78%. The gap widens when you look at long-term performance: since inception, Wealthsimple's balanced portfolio has returned 73%, while Questwealth has delivered 105.99% and Justwealth an estimated 124%.

https://moneygenius.ca/investing/wea...io-performance

Good to know. Not all bad, just less than competitors. But QW has the awful ads, so...

[Muta]

Includes deposits, yes; and it is with their Growth portfolio. Was with QT before, but hated the platform and no longer use it. For me, given the technology and the services, WS was the right choice.

[puckedoff]

Originally Posted by Reaper

See? This kind of advice is why I posted in this thread. You guys have helped tremendously.

Honestly I think the WealthSimple account is best for you. If you go to a bank they will definitely try to get you into a managed product, and it will cost you way more.

Get that $20K invested, then keep adding to it little by little. Time is a great compounder.

[Locke]

My whole retirement plan is to 'Talented Mr. Ripley' my way into the life of the rich and famous and I think as a blond white guy I can probably make that happen. I mean...if Matt Damon could do it how hard could it be??

[Nufy]

Just got my latest report...

Investments are up to about 400K...should be 5-600 k with interest and additional investment by the time I retire...(Fingers crossed)

Company RRSP should be about 150K in that time frame as well.

Include govt pension (60 or 65...haven't decided yet...)

Possibly downsize the house and use the equity as well.

Should be close to 1M available for retirement assuming no new expenses...

I am about a year away from being debt free...(no mortgage / car payments etc...)

Don't know if thats good or not...

Regular household bills dont count imo...

[undercoverbrother]

Originally Posted by Nufy

Just got my latest report...

Investments are up to about 400K...should be 5-600 k with interest and additional investment by the time I retire...(Fingers crossed)

Company RRSP should be about 150K in that time frame as well.

Include govt pension (60 or 65...haven't decided yet...)

Possibly downsize the house and use the equity as well.

Should be close to 1M available for retirement assuming no new expenses...

I am about a year away from being debt free...(no mortgage / car payments etc...)

Don't know if thats good or not...

Regular household bills dont count imo...

I am going to hit those numbers by 60, roughly 1 mill

My plan right now at 53 is to retire at 60 and still work to cover my costs.

Will that work, maybe, but I don't want to be answering emails on the weekends and evenings at 60+.

My simple napkin math tells me it should work.

Just need both kids out of school.

[Kybosh]

I was on track to retire by 55 but then we went and had another baby. ####ing dumbasses lol.

[Sliver]

Originally Posted by Reaper

I'm one of those people who haven't saved anything for retirement. I'm at the point where I don't plan on retiring simply due to not being able to afford it and time to a retirement age being short (less than 15 years). That being said, I do have about $20K that I need to invest to help with my expected slowdown as I age. I just have no idea how to invest any of it and am quite frankly embarrassed to ask. How do I go about investing in something with safe returns? No admonishment please as writing this post was hard enough.

Shout out to you, dude. You have time and you seem motivated to get on it. I'm not worried for you. Happy to see you post here and I can assure you nobody would judge you negatively for anything you wrote. You sound like a man taking control.

[Bill Bumface]

Originally Posted by DoubleF

My suggestion (one of many correct or incorrect options out there for YOU) for a reasonable baseline is to buy a major bank stock and just sit on it. RY/TD/NA/CM/BMO are the ones I'd suggest if you want to go blindly for it.

I would not do this. Just because something has done great for decades doesn't mean that will keep going. People have thought this about various industries before.

Buying the whole market, all industries, all geographies is the best way to avoid risk in one country or one sector wiping out your retirement savings. Globally diversified index funds are the cheapest way to do this.

[chemgear]

Originally Posted by Kybosh

I was on track to retire by 55 but then we went and had another baby. ####ing dumbasses lol.

[PaperBagger'14]

Originally Posted by puckedoff

Honestly I think the WealthSimple account is best for you. If you go to a bank they will definitely try to get you into a managed product, and it will cost you way more.

Get that $20K invested, then keep adding to it little by little. Time is a great compounder.

This is probably the best advice here, as said earlier avoid using banks and their financial advisors. Slava would (presumably, I don’t have any investments with him) be another great resource as well.

[PaperBagger'14]

Originally Posted by Kybosh

I was on track to retire by 55 but then we went and had another baby. ####ing dumbasses lol.

Username checks out

[Locke]

Originally Posted by Kybosh

I was on track to retire by 55 but then we went and had another baby. ####ing dumbasses lol.

Dont know what to tell ya man. Congratulations? Condolences? I hope you love your job.

In keeping with the Gif theme...

[edslunch]

Originally Posted by Reggie28

I think the $22,321 number is consumer debt, which is basically all debt excluding mortgages.

I also believe the $4652 credit card number is just the current balance on your cards, when I look at my credit report, my credit card balance is listed as debt (which it is), however it is automatically paid every month.

Like anything, the devil is in the details, personally I have a home loan that is structured as a line of credit and an investment loan that is classified as a personal loan. My contribution to “consumer” debt may be (home loan+investment loan+current credit card balance), when each of those debts are being used to my advantage and are not truly what I would consider consumer debt.

We pay everything possible with the credit card, to get points, but pay it off every month. My wife has income but I’m pulling from RRSPs. We use a home line of credit to help pay off the card for heavy months (big purchases, prepaid travel, etc.) to manage the draw on the RRSP.

We pay down the LOC over time but there’s always a balance. Interest on the LOC is less than 6% and the RRSPs typically make double that or more so I’m in no rush to clear the LOC. Getting a big lump to drop on the LOC would hurt my tax rate so I’d rather slow walk it.

[V]

I think Reaper should just YOLO on Nvidia calls.

[Locke]

Originally Posted by V

I think Reaper should just YOLO on Nvidia calls.

So...you're basically advocating that he take the $20K, head down to Vegas and put it all on Black?

Or are we thinking more of a 'Vegas Vacation' kind of Casino scenario?

[DoubleF]

Originally Posted by Bill Bumface

I would not do this. Just because something has done great for decades doesn't mean that will keep going. People have thought this about various industries before.

Buying the whole market, all industries, all geographies is the best way to avoid risk in one country or one sector wiping out your retirement savings. Globally diversified index funds are the cheapest way to do this.

That's why I said it's one of many right or wrong options. I also said later in the post that he could consider some or all of the 20K. It doesn't have to be all in right away and not all in the same stock.

IMO tracking a bank stock is more effective to learn how investments work than a blended ETF. A blended ETF is more effective at investment diversification. its two slightly different things.

[Reggie28]

Originally Posted by edslunch

We pay everything possible with the credit card, to get points, but pay it off every month. My wife has income but I’m pulling from RRSPs. We use a home line of credit to help pay off the card for heavy months (big purchases, prepaid travel, etc.) to manage the draw on the RRSP.

We pay down the LOC over time but there’s always a balance. Interest on the LOC is less than 6% and the RRSPs typically make double that or more so I’m in no rush to clear the LOC. Getting a big lump to drop on the LOC would hurt my tax rate so I’d rather slow walk it.

I don’t know how you pulled this off, I brought up that I may retire early (stressful job) but she would probably have to keep working, went over like a lead ballon. We came together later in life, in for a Penny, in for a Pound, I guess.