Author Topic: Retirement Budget (Read 33482 times)

Snowman · « **Reply #100 on:** March 04, 2015, 02:39:34 pm »

Quote from: Northernridge on March 04, 2015, 01:59:08 pm

Retirement budget – interesting to see a spreadsheet of expected expenses. I haven't done that yet...mostly because I'm not really planning to retire. But it sure is a great exercise, it leads to things like how the annual income will be funded and for how long, etc.

For example, some back of the envelope math...that $78k annual net would probably require $108k gross in ON. From investment income earning 6%/year that would require about ~~$1,800,000~~ $2,137,672 in investments. Pensions, income splitting, etc, etc are variables. I wonder how many people actually take the time to work this stuff out...and then freak out about how much money they'll need.

EFA

wing · « **Reply #101 on:** March 04, 2015, 02:47:10 pm »

I'm only 36 I've done the math. 2mil is also my number.

Hall conversation at work with 50 year old plus people that didn't have a number. They thought I was crazy at 2 mil.

I think they have a rude awakening coming.

blotter · « **Reply #102 on:** March 04, 2015, 02:50:48 pm »

Quote

interesting to see a spreadsheet of expected expenses. I haven't done that yet.

If you haven't done so yet... tracking how you spend now can help build your retirement spreadsheet.
knowing what you spend now is key to understanding what like in retirement will cost.

Quote

I wonder how many people actually take the time to work this stuff out...and then freak out about how much money they'll need.

I think many people on this forum are well ahead of the average person. It blows my mind the amount of people that don't have a plan. In a plan, I don't just mean a spreadsheet - but I think it's crazy how many don't have a lifestyle plan let alone a budget. Or have any idea of how much money they'll need, have and if it'll be enough.

tpl · « **Reply #103 on:** March 04, 2015, 02:59:23 pm »

Quote from: Snowman on March 04, 2015, 02:39:34 pm

Quote from: Northernridge on March 04, 2015, 01:59:08 pm
Retirement budget – interesting to see a spreadsheet of expected expenses. I haven't done that yet...mostly because I'm not really planning to retire. But it sure is a great exercise, it leads to things like how the annual income will be funded and for how long, etc.

For example, some back of the envelope math...that $78k annual net would probably require $108k gross in ON. From investment income earning 6%/year that would require about ~~$1,800,000~~ $2,137,672 in investments. Pensions, income splitting, etc, etc are variables. I wonder how many people actually take the time to work this stuff out...and then freak out about how much money they'll need.

EFA

Yes you are right on. About $2MM plus the pensions for a couple should be fine for the lifestyle I think you want and to get through to 95. BUT if you do make it to 95 it may not leave much to your kids...if you care. Another $1mm would do no harm tho'

We did do the math and we, being older than you have less time to go. And, importantly we have been able to refine our numbers after 9 years of retirement.

dougjp · « **Reply #104 on:** March 04, 2015, 03:00:45 pm »

The example says "from investment income", however as everyone gets CPP and OAS, am I right in assuming it was meant to read "from investment income, CPP and OAS"? If its only investment income being used, then what is the relevance, ie; the shock value with the big number that isn't required? Also, because of the CPP and OAS X2 if its a couple rather than an individual person, that makes a big difference in needs as well. And also, couples doing financial planning seldom think of what happens if suddenly its just one person having to cover all the expenses. Lots of major variables.

tpl · « **Reply #105 on:** March 04, 2015, 03:01:56 pm »

Quote from: wing on March 04, 2015, 02:47:10 pm

I'm only 36 I've done the math. 2mil is also my number.

Hall conversation at work with 50 year old plus people that didn't have a number. They thought I was crazy at 2 mil.

I think they have a rude awakening coming.

If I were 36 now and in a good career I'd be aiming for $4MM including house etc but not including pensions at 60. When I think of what prices and so on were when I was 36, high inflation then as well and to allow for a 2008 at some time in the next 24 years I'd want more than $2MM

mrthompson · « **Reply #106 on:** March 04, 2015, 03:07:28 pm »

To some this might be the retirement lifestyle plan...

ArticSteve · « **Reply #107 on:** March 04, 2015, 03:15:49 pm »

What's required is some serious uptake in global warming .... soon, very soon!

Snowman · « **Reply #108 on:** March 04, 2015, 03:18:28 pm »

Quote from: ArticSteve on March 04, 2015, 03:15:49 pm

What's required is some serious uptake in global warming .... soon, very soon!

Yes, I'm all for that. Looked at travel insurance costs for one month outside Canada at age 70. An eye watering $3000

Northernridge · « **Reply #109 on:** March 04, 2015, 03:22:27 pm »

$4million...Jesus Christ! The vast majority of Canadians have zero hope of anything remotely close to this... only what, 1% are millionaires today?

http://www.thestar.com/business/2014/06/18/were_rich_number_of_canadian_millionaires_climbs_to_320000.html#

I call BS on most of this 'my number' business. Most people's number is another 10-15 years of work.

Arthur Dent · « **Reply #110 on:** March 04, 2015, 03:22:59 pm »

Pretty sure this will be mine

dougjp · « **Reply #111 on:** March 04, 2015, 03:25:45 pm »

Quote from: mrthompson on March 04, 2015, 03:07:28 pm

To some this might be the retirement lifestyle plan...

Old book, old chair, old house, obviously NOTHING spent for paint or wall cleaner...... No cost of living!

wing · « **Reply #112 on:** March 04, 2015, 03:26:43 pm »

My number doesn't include house which is already worth 500k so maybe a 1mil in house equity by then.

Snowman · « **Reply #113 on:** March 04, 2015, 03:27:20 pm »

Quote from: Northernridge on March 04, 2015, 03:22:27 pm

$4million...Jesus Christ! The vast majority of Canadians have zero hope of anything remotely close to this... only what, 1% are millionaires today?

http://www.thestar.com/business/2014/06/18/were_rich_number_of_canadian_millionaires_climbs_to_320000.html#

I call BS on most of this 'my number' business. Most people's number is another 10-15 years of work.

Depends on where and what lifestyle you chose. My mom lived very comfortably on $47k/year in her house that was paid off. In the last few years her investments were actually growing faster than her draw-down. At 74 she had about 200k left.

Weels · « **Reply #114 on:** March 04, 2015, 03:44:03 pm »

I think people tend to overestimate their $$ needs in retirement.
My mother as an example. I just went to bank with her yesterday to re-invest a couple of her GIC's. She is 84 and she has about $600K including her condo.
Her only income is a tiny annuity and the usual CPP/OAS. Every time we go to review her investments, she has more in the bank than the last time.

Granted....... she is in good health and spends nothing. Her largest budgetary item i am sure is her wine. Of course, if her health deteriorated and needed to go to a retirement home, that $600K would be pretty much shot if she lived another 10 years

Northernridge · « **Reply #115 on:** March 04, 2015, 03:44:20 pm »

I think most people are going to have to come to terms with working longer (big deal) and pairing back lifestyle.

redman · « **Reply #116 on:** March 04, 2015, 03:54:46 pm »

I guess it all depends on your lifestyle. Recently in Aruba we met a retired couple who travel every month in winter starting late December overseas for 1 week minimum at a time.
They are planning Spain in April and already booked in for New Zealand for next winter. They spend summers between their home in and cottage in Rhode Island and live nearby 4 kids and 12 grandchildren.

That's my kind of retirement. I'd be comfortable being able to swim in salt water daily and not having to wear closed shoes ever again or layer up to high heaven just to run to the grocery store.
I have low blood pressure and suffer with cold skin on hands during winter. For the week I was gone I never had the cold hands issue or sinusitis.
I asked about travel within the U.S. and they stated not yet we're saving that when mobility becomes an issue than off to our cottage with ramps, wide door and first floor bedroom.
"We don't travel much within N.A. but make exceptions for Quebec City"

This is how I'd rather get there

https://www.wingsmagazine.com/operations/fractional-ownership-in-canada-506

johngenx · « **Reply #117 on:** March 04, 2015, 04:03:40 pm »

I really don't see myself ever not working, but doing things I like and only part-time. Kinda like now!

ArticSteve · « **Reply #118 on:** March 04, 2015, 04:14:48 pm »

Quote from: Northernridge on March 04, 2015, 03:44:20 pm

I think most people are going to have to come to terms with working longer (big deal) and pairing back lifestyle.

Forget retirement, I think just keeping a decently paying job will be a rarity in the not so distant future.

Northernridge · « **Reply #119 on:** March 04, 2015, 04:20:32 pm »

Quote from: johngenx on March 04, 2015, 04:03:40 pm

I really don't see myself ever not working, but doing things I like and only part-time. Kinda like now!

Same. Work is fulfilling (or I'd change careers) and every year of working is one less year of living off savings.

Somehow we have to convince the next generation to not loath their career...or at least not have to count down the days until they can leave it.