Are you saving enough for retirement?

[edslunch]

Originally Posted by Reggie28

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.

I retired at 60 after years of burnout, and figured we had enough to make it work. I’m 4 years older than her so could play the “I’ve paid my dues” card. Of course that’s the moment she decided to launch a startup and has been insanely busy ever since. But if it wasn’t that it would be something else…she will never retire.

[RichieRich]

Hey Reaper - great questions and you triggered a bunch of awesome stuff. Perhaps like drinking from a fire hose for a bit. Biggest advise stated (which I agree with) was: Take a bit of time and get educated. Read a LOT. It'll be overdose and "too much" for the first bit until the pieces of the puzzle come together.


Here's a Canadian couple.. yes they were high income earners but they REALLY really dove into things and created a great "how to" online guide for free. Website link is here: https://www.millennial-revolution.com/start-here/, followed by: https://www.millennial-revolution.com/investworkshop/


and their basic layout is as follows:
Part 1: Why People Lose Money in the Stock Market
Part 2: How To Build a Portfolio
Part 3: Asset Allocation: Slicing the Pie
Part 4: Rebalancing: How to Buy Low and Sell High
Dollar Cost Averaging: How To Invest Without Freaking Out
Sequences of Returns Risk
Black Swan Events
How To Pay No Tax On Your Investments (Canadian Edition)
Investment Fees Are The Worst


I have *not* actually rigorously followed this specific instruction (but do in general), but have followed their online blog and studies etc etc pretty much since the beginning. It may be easier to binge-read some of this stuff.

[RichieRich]

NEXT big things that I don't believe I saw that much of above:


Figure out how to get extra money to save.


That may look like a combination of:
- more work
- more pay (how? be more valuable, rise up, 2nd income stream)


What many forget is that you also gotta look at what you spend your existing money on and basically do better. It may mean cutting a few things, trimming here and there, and quite probably just doing better with contracts. It's daunting but not that hard. What am I talking about?
- cut unnecessary streaming services and online stuff like Prime, Netflix, etc...
- maybe cut non-essential memberships (unless they are of exceptional value to you such as physical/mental health)
- do better on your TV/Phone/Internet - it's a tight market and relatively easy to get big discounts for relatively little effort.
- Use GasBuddy
- Use Flashfood
- Discounts and coupons on everything you do
- local holidays instead of flights/etc...
- find ways to spend less on vehicle(s), housing (electricity/gas)
- clothing you need - so much on Marketplace and ValueVillage and Goodwill
- other "stuff" - so much on Marketplace/Kijiji
- avoid buying new or latest-and-greatest
- stop buying coffee/food/booze from cafes/restaurants


I'm sure there are many other ways to stretch a dollar BUT then you gotta have the discipline to put it away for your future self.

[RichieRich]

lastly (for this evening) most of ya'll may find this link useful:
https://www.theglobeandmail.com/inve.../cpp-benefits/


Basically helps you determine when taking CPP makes sense, or to compare where the crossover point is for total monies taken. Of course don't forget taking CPP is added to your taxable income so it also has an affect there.
I back-calculated the approx CPP internal rate of return (ie if you defer year over year for a higher rate down the line) and it was around 8%'ish. So that means if you take it early and invest it for yourself (and your heirs if you croak), you need to be making more than ~8% return.

[GGG]

Originally Posted by RichieRich

lastly (for this evening) most of ya'll may find this link useful:
https://www.theglobeandmail.com/inve.../cpp-benefits/


Basically helps you determine when taking CPP makes sense, or to compare where the crossover point is for total monies taken. Of course don't forget taking CPP is added to your taxable income so it also has an affect there.
I back-calculated the approx CPP internal rate of return (ie if you defer year over year for a higher rate down the line) and it was around 8%'ish. So that means if you take it early and invest it for yourself (and your heirs if you croak), you need to be making more than ~8% return.

I think this is the wrong way to look at CPP.

CPP is a guaranteed investment, effectively an inflation adjusted annuity. By having this annuity it allows you to take more risk in other investments and generate greater returns there. It’s your longevity hedge. So in evaluating its value one should look at the cost to purchase a similar product if it’s even available.