I always thought the idea of early retirement wasn't to save enough to live x years but rather save enough to generate a never ending income from. eg, If you can save 5 million and get a 4% return on your retirement investment you can withdraw 2% of that ($100k) and use the other 2% to grow your investment at the rate of inflation. In other words, you could live forever on your retirement nest egg. Or in the case of 3.2 million at 4% you could pull out a living wage of $64k/year while growing your initial investment with inflation.
Now saving 5 million bucks to start the party is a different story...
I finally started a RRSP because of this thread....it only has $25 in it but that's $25 more than it had yesterday.
For all the bickering, whining and trolling that goes on here, I think we just made a difference. I think we just saved someone's life. Good work CP!
In all seriousness, that's awesome. Once you start a plan, and have automatic withdrawals to your savings/RSP/TFSA/etc. account(s), you won't miss the money, and will wonder why you didn't start before. You'll also think that if you can save $25 per cheque, why not an extra $10 on top of that. It's totally worth it. Good job on starting and good luck going forward.
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Quote:
Originally Posted by Bingo
Jesus this site these days
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Originally Posted by Barnet Flame
He just seemed like a very nice person. I loved Squiggy.
As Steve Jobs said the immutable fact is death is the greatest changing force on the planet. There's this balance between the present and the future. What good is saving for an RRSP if you exit the planet pre-maturely.
Then I think about John Lennon, that life is what happens when your busy making other plans. The whole Freedom 55 thing.
Theres a fine balance for living and experiencing each day and planning for the future.
Wealth which creates choice is created from income and ensuring your expenses are way below. Wealth is potential energy that is stored to be used to make a choice. Once that choice is made, wealth quickly dissipates. Most people that I know that are wealthy consume very little and would be hard to identify. Most people that I know the make a lot of money spend it and do not have wealth. Just materials and coffee house addictions and no freedom of choice.
To that end, retirement should be defined as having your expenses totally in control. The truth is by the time most people are 65 they aren't too interested in consuming anymore. They are not looking to move into a neighbourhood, or the trouble of renovating. They may not want to travel as much, or plan out a cheaper extended stay. They drive their cars longer, they drive less. The flash dance of newer, better, faster is replaced with peace, no trouble, leave me alone. They've successfully partnered with a woman who has issued her demands, not divorced you (50% wife tax) and is no longer possessed.
It's more about a state of mind. If you really went to work on your spending and you could transport your mind to the age of 65 and take away all your desires and needs, your spending would plummet tomorrow. That's the moment you start to build wealth and freedom of choice. However, you could be 25, and you need a house a new car, a washer a dryer, a wedding..... wealth is demographically linked to age.
Retirement is not sitting around wasting your days, or spending wads of cash, it's having enough wealth to responsibly choose and be free from outside influence on your decisions.
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^^^ I really like the above, We really don't have a saving problem we have a spending problem. I look at how much I spend on coffee and eating out and it really is sickening when you do the 35 year cost of it and certainly not worth it. Over the past year I have cut that amount in half. Still a ways to go.
One experiment I did with myself was to stop consuming. For 1 month we didn't buy anything aside from neccessary groceries. This was also combined with trying to rework diets so we also didn't by anything processed. The first 2 weeks were difficult but in the end we carried on for 2 months before slowly slipping back into a consumption mode.
My latest thought to spending is to always spend with intent. Every dollar spent should be planned and enjoyed. So instead of going out to eat because I don't feel like cooking I go out to eat becasue I have a planned event. I find planning to spend and knowing the cost of that spending makes me consume far less.
I think there's a healthy balance between saving for the future and enjoying your life in the present.
I spend an obscene amount each month on coffee and restaurants, and I enjoy going on lavish vacations and buying the latest technology gadgets like smartphones, tablets, and game consoles. Someone who scrimped and saved through the Great Depression would probably think I'm living a wasteful life of opulence, but those are luxuries I can afford because I'm disciplined with my personal finances. I don't have any student debt, I never carry a balance on my credit card, I contribute 10% of my gross salary to my RRSP (and my employer adds an additional 5%), and I maximize my TFSA investments each year. I also have three months' worth of personal expenses saved in a rainy day account. I don't drive a car, and I choose to live in a modest 2BR condo in the Beltline. Despite only being in my early 30s, I already have more retirement savings than most Canadians aged 50+. I'm also paying off my home in an accelerated fashion and will be mortgage-free within four years.
As far as I'm concerned, planning appropriately for retirement doesn't mean you have to live like a miser while you're young. Like others have said, setup automatic RRSP deposits from the moment you get your first ever paycheque. You will never miss the money, and saving for retirement in this manner won't make any impact at all in your ability to enjoy your youth.
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I apologize if this has been posted already, but I've found the following strategy works for me in terms of increasing your savings.
I, like most people, am trying to balance living in the current and living for the future. It took few a few years of living on my own to get out of living paycheque to paycheque, and that was with going out to dinner, enjoying the nightlife, the odd vacation, golf, Flames tickets etc. Once I received enough money that allowed me to save a portion of my paycheque, I immediately put that into an RRSP. I deduct every 2 weeks on the same day I receive the paycheque, so it's like I never received the money at all. With every raise, I increase my portion of money that I put in savings by the same amount. So now I still appear to be living paycheque to paycheque, but in reality I’m saving 12% of my income before it even gets in my hands.
I think there's a healthy balance between saving for the future and enjoying your life in the present.
I spend an obscene amount each month on coffee and restaurants, and I enjoy going on lavish vacations and buying the latest technology gadgets like smartphones, tablets, and game consoles. Someone who scrimped and saved through the Great Depression would probably think I'm living a wasteful life of opulence, but those are luxuries I can afford because I'm disciplined with my personal finances. I don't have any student debt, I never carry a balance on my credit card, I contribute 10% of my gross salary to my RRSP (and my employer adds an additional 5%), and I maximize my TFSA investments each year. I also have three months' worth of personal expenses saved in a rainy day account. I don't drive a car, and I choose to live in a modest 2BR condo in the Beltline. Despite only being in my early 30s, I already have more retirement savings than most Canadians aged 50+. I'm also paying off my home in an accelerated fashion and will be mortgage-free within four years.
As far as I'm concerned, planning appropriately for retirement doesn't mean you have to live like a miser while you're young. Like others have said, setup automatic RRSP deposits from the moment you get your first ever paycheque. You will never miss the money, and saving for retirement in this manner won't make any impact at all in your ability to enjoy your youth.
Maybe one of the experts can advise, but isn't it recommended for 6 months? After the 2008 recession, besides keeping 3 months in cash I also keep +12 months in bonds (short term investments), then the rest are "investments".
__________________
"With a coach and a player, sometimes there's just so much respect there that it's boils over"
-Taylor Hall
As Steve Jobs said the immutable fact is death is the greatest changing force on the planet. There's this balance between the present and the future. What good is saving for an RRSP if you exit the planet pre-maturely.
Then I think about John Lennon, that life is what happens when your busy making other plans. The whole Freedom 55 thing.
Theres a fine balance for living and experiencing each day and planning for the future.
Wealth which creates choice is created from income and ensuring your expenses are way below. Wealth is potential energy that is stored to be used to make a choice. Once that choice is made, wealth quickly dissipates. Most people that I know that are wealthy consume very little and would be hard to identify. Most people that I know the make a lot of money spend it and do not have wealth. Just materials and coffee house addictions and no freedom of choice.
To that end, retirement should be defined as having your expenses totally in control. The truth is by the time most people are 65 they aren't too interested in consuming anymore. They are not looking to move into a neighbourhood, or the trouble of renovating. They may not want to travel as much, or plan out a cheaper extended stay. They drive their cars longer, they drive less. The flash dance of newer, better, faster is replaced with peace, no trouble, leave me alone. They've successfully partnered with a woman who has issued her demands, not divorced you (50% wife tax) and is no longer possessed.
It's more about a state of mind. If you really went to work on your spending and you could transport your mind to the age of 65 and take away all your desires and needs, your spending would plummet tomorrow. That's the moment you start to build wealth and freedom of choice. However, you could be 25, and you need a house a new car, a washer a dryer, a wedding..... wealth is demographically linked to age.
Retirement is not sitting around wasting your days, or spending wads of cash, it's having enough wealth to responsibly choose and be free from outside influence on your decisions.
Maybe one of the experts can advise, but isn't it recommended for 6 months? After the 2008 recession, besides keeping 3 months in cash I also keep +12 months in bonds (short term investments), then the rest are "investments".
I dont' subscript to this idea. I have a HELOC so why would I choose to park 3 or 6 month of cash in a basically non-interest paying account? If I do need funds, I'll just take it out of my HELOC when the time comes.
^^^ I really like the above, We really don't have a saving problem we have a spending problem. I look at how much I spend on coffee and eating out and it really is sickening when you do the 35 year cost of it and certainly not worth it. Over the past year I have cut that amount in half. Still a ways to go.
One experiment I did with myself was to stop consuming. For 1 month we didn't buy anything aside from neccessary groceries. This was also combined with trying to rework diets so we also didn't by anything processed. The first 2 weeks were difficult but in the end we carried on for 2 months before slowly slipping back into a consumption mode.
My latest thought to spending is to always spend with intent. Every dollar spent should be planned and enjoyed. So instead of going out to eat because I don't feel like cooking I go out to eat becasue I have a planned event. I find planning to spend and knowing the cost of that spending makes me consume far less.
I definitely agree with this sentiment. Just taking the time to consider what you're about to do with your money - or anything in life - will give you a chance to pause and genuinely consider if it's worthwhile and meaningful.
Like others have said, setup automatic RRSP deposits from the moment you get your first ever paycheque. You will never miss the money, and saving for retirement in this manner won't make any impact at all in your ability to enjoy your youth.
So important.
We have started this with the kids and allowance. They must each put a certain amount of their allowance into their banks accounts each month.
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I'm on Freedom 95. My retirement plan is "Honey, my left arm is all tingly. I'll get it checked out after I clear off my desk today. I gotta get back to work."
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We have started this with the kids and allowance. They must each put a certain amount of their allowance into their banks accounts each month.
This x 1010000000100101010
My parents forced me to save half of everything I made growing up. I had my first job at 14. It really sucked at the beginning not being able to blow all my money on the fancier bike or more x box games and what not. It sure paid off though once I wanted to buy my first property at 19. Having that money and learning how to save really set me up for life thus far.
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Right, as long as those programs are around and still paying that much (indexed) and in his case if he retires and lives for 20 years it all works. To me though, this is where advisors really show what they're worth; things go wrong and maybe the market corrects and you don't have as much to retire. Maybe the government can't afford to keep those programs rolling. Maybe you have tax obligations or health issues that change things dramatically. Throw in a divorce for good measure or other enormous life changes/challenges and who knows whether these scenarios work out as well as hoped?
CPP is considered to be sound until at least 2075. For OAS, who knows.
My parents forced me to save half of everything I made growing up. I had my first job at 14. It really sucked at the beginning not being able to blow all my money on the fancier bike or more x box games and what not. It sure paid off though once I wanted to buy my first property at 19. Having that money and learning how to save really set me up for life thus far.
Because mashing buttons on the keyboard is way more fun than typing 100. I don't know how binary stuff works but x 327978 also sounds like the message will get across to those binary guys as well!
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CPP is considered to be sound until at least 2075. For OAS, who knows.
OAS is funded differently, so will be sound as long as the government is solvent. However, they may set back the retirement age.
I cringe when I read some saying live it up now because you may not live long enough to retire. You probably will, so you have to plan for it. Balance, folks. Balance.
