Are you saving enough for retirement?

[Enoch Root]

Originally Posted by GGG

The options are some combination of increase risk, spend less in retirement, spend less today, or work longer so whether or not anyone said work longer it’s a consequence of have a higher number.

I read your comment 'work more' as working more now, not working for more years - i.e. another reference to the work vs family or enjoyment comments.

But yeah, working extra years is definitely an option, especially for those that didn't start saving early enough (which has been my primary message from the get-go - the earlier you start to save, the better).

That brings up another point, BTW. A few people have mentioned working part time in retirement, or continuing to work even though they could retire. One thing I have always said is: retirement doesn't mean that you don't work, it means that you don't have to work. Or, as Tony Robbins calls it: Financial freedom.

Having something that you enjoy, that provides supplemental income in retirement (along with getting you off the sofa) is a great way to strengthen your financial situation and solidify your retirement income.

[iggy_oi]

Originally Posted by flamesfever

My advise to lower income people, especially those just starting out, would be:

1. Only have one credit card e.g. Visa or Mastercard, and make sure you pay off the balance every month.

2. Establish a long term relationship with one bank, and work on maintaining as high a credit rating as possible.

3. Start a TFSA, and learn to invest.

4. Purchase a freezer and start buying meat and other items on sale.

5. Minimize spending by limiting to item needs and not wants, and don't get sucked in by ad campaigns. Never try to keep up with the Joneses.

6. Minimize time on social media...99% is a waste of valuable time.

7. Maintain good physical health with proper diet, exercise and adequate sleep.

8. Maintain good mental health by keeping socially active with family and friends. Get a dog. Stay positive. Be grateful for what you have.

9. DON'T WORRY...BE HAPPY

You don’t know very many people who work for minimum wage do you?

This type of pull up your bootstrap thinking is insulting advice for the demographic you’re trying to give it to because the majority of what you’re suggesting is likely impossible to do for someone who takes home $1200/month.

1.Having one credit card is sensible, but expecting someone with a low income to pay off the balance every month seems pretty ignorant to why they would end up with a balance in the first place.

3.Start investing is also sensible, when you actually have money to do so. How far do you think an income of $1200/month is realistically going to go after you’ve put a roof over your head and fed yourself?

4.Purchase a freezer? See point number 3.

5.Minimizing spending is always good advice but at the same time it’s unrealistic to think people won’t spend money on some items you may consider to be frivolous. If the only thing you’re able to afford from working full-time is a roof over your head, food and a means to get you to and from work inflation will eventually break you before frivolous spending has a chance.

6.People should reduce their time on social media for a lot of reasons, but I don’t think it will help you with retirement.

7.Healthy food is expensive. Frankly most of what you’re suggesting is completely out of reach for someone working a minimum wage job, which means they would probably need multiple jobs to achieve these objectives, which means adequate sleep is probably not in the cards.

8.Get a dog? Seriously? This goes against a number of your other suggestions. Spending time with family and friends is all well and good but if you can’t actually afford to do so or don’t have the time because you’re working multiple jobs to make ends meet it’s really kick them while they’re down style advice IMO.

9. “Don’t worry be happy.” “Be grateful for what you have”. It’s funny, this type of thinking doesn’t even work for rich people whenever any sort of tax increase is brought up yet you think it’s going to work for low income earners who have very little. That’s rich, pun intended.

You can’t squeeze blood from a stone, but assuming you can appears to be the theme of your “advice”. I believe your heart is in the right place but most of the advice you’re giving simply just isn’t in the cards for the people you’re trying to give it to.

Here’s my suggestion to any low/minimum wage earners, use the means that are available to you to increase your compensation at your current job if you can’t find a better paying one. The more money you have, the more options you will have in life to plan for retirement. You may even end up being able to afford some of flamesfever’s suggestions that would otherwise be out of reach. Working more hours at stagnant low wages simply isn’t sustainable, without actual wage growth inflation will ensure that you continually fall further behind because there’s only so many additional hours you can actually work.

[Enoch Root]

Originally Posted by iggy_oi

You don’t know very many people who work for minimum wage do you?

This type of pull up your bootstrap thinking is insulting advice for the demographic you’re trying to give it to because the majority of what you’re suggesting is likely impossible to do for someone who takes home $1200/month.

1.Having one credit card is sensible, but expecting someone with a low income to pay off the balance every month seems pretty ignorant to why they would end up with a balance in the first place.

3.Start investing is also sensible, when you actually have money to do so. How far do you think an income of $1200/month is realistically going to go after you’ve put a roof over your head and fed yourself?

4.Purchase a freezer? See point number 3.

5.Minimizing spending is always good advice but at the same time it’s unrealistic to think people won’t spend money on some items you may consider to be frivolous. If the only thing you’re able to afford from working full-time is a roof over your head, food and a means to get you to and from work inflation will eventually break you before frivolous spending has a chance.

6.People should reduce their time on social media for a lot of reasons, but I don’t think it will help you with retirement.

7.Healthy food is expensive. Frankly most of what you’re suggesting is completely out of reach for someone working a minimum wage job, which means they would probably need multiple jobs to achieve these objectives, which means adequate sleep is probably not in the cards.

8.Get a dog? Seriously? This goes against a number of your other suggestions. Spending time with family and friends is all well and good but if you can’t actually afford to do so or don’t have the time because you’re working multiple jobs to make ends meet it’s really kick them while they’re down style advice IMO.

9. “Don’t worry be happy.” “Be grateful for what you have”. It’s funny, this type of thinking doesn’t even work for rich people whenever any sort of tax increase is brought up yet you think it’s going to work for low income earners who have very little. That’s rich, pun intended.

You can’t squeeze blood from a stone, but assuming you can appears to be the theme of your “advice”. I believe your heart is in the right place but most of the advice you’re giving simply just isn’t in the cards for the people you’re trying to give it to.

Here’s my suggestion to any low/minimum wage earners, use the means that are available to you to increase your compensation at your current job if you can’t find a better paying one. The more money you have, the more options you will have in life to plan for retirement. You may even end up being able to afford some of flamesfever’s suggestions that would otherwise be out of reach. Working more hours at stagnant low wages simply isn’t sustainable, without actual wage growth inflation will ensure that you continually fall further behind because there’s only so many additional hours you can actually work.

More really bad advice here.

1) If you aren't paying off your credit card balance every month, you are wasting money. CC interest rates are 18% and higher. If you're on minimum wage, or similar, the last thing you can afford is to buy on your CC and not pay it off. Yes, #### happens. And yes, it's hard. But paying off your credit card(s) is the first thing everyone should do.

3) The biggest mistake most people make is they think "I can't afford to save'. start with something - $10 even. Once you do it, you quickly learn that you don't miss it. Starting to save - as difficult as it is - is one of the ways to get out of the rut of poverty.

[koop]

Originally Posted by iggy_oi

Here’s my suggestion to any low/minimum wage earners, use the means that are available to you to increase your compensation at your current job if you can’t find a better paying one. The more money you have, the more options you will have in life to plan for retirement. You may even end up being able to afford some of flamesfever’s suggestions that would otherwise be out of reach. Working more hours at stagnant low wages simply isn’t sustainable, without actual wage growth inflation will ensure that you continually fall further behind because there’s only so many additional hours you can actually work.

So reading between the lines here, Iggy_oi's retirement / financial planning advice for low income earners is to start a union drive... Im shocked

[iggy_oi]

Originally Posted by Enoch Root

More really bad advice here.

Not sure if you’re referencing my post or your only 2 counter points to the 9 I made, but if it’s the latter we definitely agree.

1) If you aren't paying off your credit card balance every month, you are wasting money. CC interest rates are 18% and higher. If you're on minimum wage, or similar, the last thing you can afford is to buy on your CC and not pay it off. Yes, #### happens. And yes, it's hard. But paying off your credit card(s) is the first thing everyone should do.

Flamesfever’s post was specifically addressed to low wage earners. I don’t disagree that paying off your credit card should be a priority, but frankly it’s simply not possible in many situations and the less money you earn the more likely you are to end up in that situation. If you want to pretend as though it’s always possible all I can say to that is simple math suggests it isn’t.

3) The biggest mistake most people make is they think "I can't afford to save'. start with something - $10 even. Once you do it, you quickly learn that you don't miss it. Starting to save - as difficult as it is - is one of the ways to get out of the rut of poverty.

Again, we’re taking about low wage earners here. While there is almost certainly people in higher earning end of that demographic who spend where they could be saving, there’s also certainly people who spend every penny on the necessities of life and literally can’t save that extra $10. How many minimum wage earners do you know who put money away every month?

[iggy_oi]

Originally Posted by koop

So reading between the lines here, Iggy_oi's retirement / financial planning advice for low income earners is to start a union drive... Im shocked

It sounds like you have better solution, so please share it. Someone already suggested buying a dog, of the two which do you think would be more likely to get them ahead?

[koop]

Im not sure what you are arguing here. Are you really saying there arent good financial habits someone earning a low wage can have?

Paying off your credit card every month is "bad advice"?

[Enoch Root]

Originally Posted by iggy_oi

Flamesfever’s post was specifically addressed to low wage earners. I don’t disagree that paying off your credit card should be a priority, but frankly it’s simply not possible in many situations and the less money you earn the more likely you are to end up in that situation. If you want to pretend as though it’s always possible all I can say to that is simple math suggests it isn’t.

Actually, the math clearly states that you have no choice, but to do so.

Again, we’re taking about low wage earners here. While there is almost certainly people in higher earning end of that demographic who spend where they could be saving, there’s also certainly people who spend every penny on the necessities of life and literally can’t save that extra $10. How many minimum wage earners do you know who put money away every month?

Well, I know that my wife and I did.

But that isn't the point. The point is that this is a thread about saving for retirement. It is a thread designed to provide ADVICE. It is terrible advice to say people can't afford it. Because they can. And they should. Life is choices, and even if it's a hard choice, it's a good one. It is helpful in building a way out of poverty.

[iggy_oi]

Originally Posted by koop

Im not sure what you are arguing here. Are you really saying there arent good financial habits someone earning a low wage can have?

I’m not saying that at all.

Paying off your credit card every month is "bad advice"?

It’s great advice, it’s just not practical for some scenarios.

Imagine a minimum wage earner on a fixed budget who gets sick and not only misses time from work without sick days to cover their lost wages but also has to pay out of pocket for medications to treat their illness because they don’t have coverage, you can even throw in the potential for an expensive ambulance bill. They are likely put in a position where they have to choose between eviction or putting some bills on a credit card that they know full well they may not be able to pay off. How would you suggest they pay it off when they have no disposable income to do so and no means to increase their income?

[koop]

Originally Posted by iggy_oi

I’m not saying that at all.



It’s great advice, it’s just not practical for some scenarios.

Imagine a minimum wage earner on a fixed budget who gets sick and not only misses time from work without sick days to cover their lost wages but also has to pay out of pocket for medications to treat their illness because they don’t have coverage, you can even throw in the potential for an expensive ambulance bill. They are likely put in a position where they have to choose between eviction or putting some bills on a credit card that they know full well they may not be able to pay off. How would you suggest they pay it off when they have no disposable income to do so and no means to increase their income?

Ok, so advice is bad unless it can hold up agaisnt any hypothetical scenario you throw out about financial hardship? In that case I guess i can see how you arrive at the position where there is no such thing as good advice for someone earning a low income.

[iggy_oi]

Originally Posted by Enoch Root

Actually, the math clearly states that you have no choice, but to do so.

Like you say below, life is choices. Sometimes that choice is between keeping a roof over your head and incurring interest on your credit card.

Well, I know that my wife and I did.

Congratulations to you both in whatever era that occurred in, but do you actually know any who are currently doing so?(the actual question I was asking)

But that isn't the point. The point is that this is a thread about saving for retirement. It is a thread designed to provide ADVICE. It is terrible advice to say people can't afford it. Because they can. And they should. Life is choices, and even if it's a hard choice, it's a good one. It is helpful in building a way out of poverty.

Your entire argument appears to be predicated on your assumptions that all low wage earners can afford what you want them to do when that simply is not the case. If your advice isn’t based on reality I don’t think it’s very helpful.

[iggy_oi]

Originally Posted by koop

Ok, so advice is bad unless it can hold up agaisnt any hypothetical scenario you throw out about financial hardship? In that case I guess i can see how you arrive at the position where there is no such thing as good advice for someone earning a low income.

Do you always try to put words in people’s mouths when they challenge your passive aggressive attempts to dismiss what they say or are you making a special exception in this case?

You’ve tried to it 2 posts in a row now.

[koop]

Originally Posted by iggy_oi

Do you always try to put words in people’s mouths when they challenge your passive aggressive attempts to dismiss what they say or are you making a special exception in this case?

You’ve tried to it 2 posts in a row now.

Railing agaisnt some pretty basic and sound advice like paying off a credit card every month is bizzare.

Im sure someone could list hypotheticals off in response to literally any financial advice as a reason it wouldnt be possible in a certain scenario.... But im not sure what the purpose of that excersize would be. Advice doesnt have to hold up to any hypothetical situation to be sound.

If someone in any financial situation doesnt have a plan to pay off their monthly credit card balance on a regular basis its just going to keep getting worse, and as such its a good peice of advice to focus on first and foremost. That doesnt mean #### cant happen in life to throw things off the rails, but it doesnt change that its good advice.

Explain what im missing here.

[Geraldsh]

Credit card interest was the epiphany that got me started on the road to financial freedom. We were in a rough spot employment wise and had to find a way to stop spending more than we were earning. Discovering that over $50 a month was disappearing with nothing left to show for it was a life changer.

[iggy_oi]

Originally Posted by koop

Explain what im missing here.

That no one is railing against the concept that paying off a credit card every month is a prudent thing to do. You just simply couldn’t come up with an answer to my response to your OP which had absolutely nothing to do with credit card debts so you decided to change the subject and start putting words in my mouth. Are you back up to speed now?

[koop]

Originally Posted by iggy_oi

That no one is railing against the concept that paying off a credit card every month is a prudent thing to do. You just simply couldn’t come up with an answer to my response to your OP which had absolutely nothing to do with credit card debts so you decided to change the subject and start putting words in my mouth. Are you back up to speed now?

The dog vs union drive question? You were looking for a response to that?

1.Having one credit card is sensible, but expecting someone with a low income to pay off the balance every month seems pretty ignorant to why they would end up with a balance in the first place.

Its pretty basic, sound advice and youre saying its ignorant.

I questioned you on it and your response was some convoluted hypothetical about how there are certain situations it wouldnt be possible, which is both true and irrelevent to paying off a credit card being good advice.

Owning a dog vs. Kicking off a union drive and its impact on retirement/financial planning for low income earners sounds interesting and all, but maybe a tad off topic, no?

I think making plans to pay off your monthly CC balance as a rule is far better for someones future financial outlook than a union drive though.

[Jason14h]

Let's be honest - If you are making minimum wage as an adult with a family, you are not going to be able to build much of a retirement fund. The best advice is 100% get into a job that pays more.

However, only ~8% of Canadians earn minimum wage

Of that 50% are under 25

So we're looking at ~4-5% of the Canadian working population over 25 being in this situation

A minimum wage earner makes ~$30,000 a year

CPP pays ~$15,000 and OAS pays ~7500

So for a minimum wage earner (Someone who is earning minimum wage for their entire working career and cant build a retirement fund in any way) the government provided benefits provide $22,500 or 75% of their pre retirement income.

These people will unfortunately be forced to find a way to make another $600 a month to close the gap during retirement.

However, if this same minimum wage earner contributes just $25 from each paycheck from the age of 25 to retirement (at 6%) they would have $140,000K, or enough to cover the gap between minimum wage of government provided retirement $$

So even at minimum wage finding a small amount to put aside helps - And all the advice given are ways to potentially find that $25 every two weeks.

[GGG]

GIS would add another 909 per month if single and income is below 19k (not counting OAS). So a minimum wage earners retirement is fully funded.

Your CPP looks like full CPP whereas I think a kin wage earner it would be lower but overall your point is sound. Min wage earners don’t need to save for retirement.

[iggy_oi]

Originally Posted by koop

The dog vs union drive question? You were looking for a response to that?

You criticized my suggestion without even trying to relate it to paying off debt and I asked you to share what you thought would be a better solution. You responded by asking whether or not I thought there were no good financial habits for low wage earners and then followed it up by implying that I was saying paying off credit card debt was generally bad advice.

Its pretty basic, sound advice and youre saying its ignorant.

There’s a big difference between saying advice is ignorant altogether and saying the advice will not be helpful in many scenarios.

I questioned you on it and your response was some convoluted hypothetical about how there are certain situations it wouldnt be possible, which is both true and irrelevent to paying off a credit card being good advice.

If you found my simple example of an employee being forced to take on some debt to cover some bills because they got sick to be convoluted I really don’t know what to say to that other than it seemed like a pretty reasonable example of a situation where otherwise good advice isn’t helpful.

Owning a dog vs. Kicking off a union drive and its impact on retirement/financial planning for low income earners sounds interesting and all, but maybe a tad off topic, no?

I’d say you’re half right but then again there are some posters who seem to think owning a dog is great advice for helping with retirement.

I think making plans to pay off your monthly CC balance as a rule is far better for someones future financial outlook than a union drive though.

I’d argue the opposite as my suggestion is actually beneficial to a low wage earners financial outlook whether they have credit card debt or not, but even in the event they do it will also help with paying off that debt. Win/win right?

[RichieRich]

Income Distribution in Canada by Age

Nearly 2 million seniors subsist on less than $17,000 each year. Seniors in Canada have not been immune to difficulties. Indeed, almost 15% of single seniors live in poverty.

Around two million seniors struggle to make ends meet on the government-provided Guaranteed Income Supplement. Their yearly income is slightly around $17,000, less than the $18,000 poverty threshold for a single person in Canada.

Source of this and many many other Canadian income facts are here:
https://www.insurdinary.ca/average-income-in-canada/