Topic: Retirement Budget

[mmret]

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

Indeed. I worked out a lot of simulation based scenarios several years ago when I entered the workforce. There's various strategies you can use to minimize the odds of going bankrupt over a certain time horizon (essentially its a bit like asset-liability management, except backwards).

I came up with something like $3.2m plus a house. (Of course there are an infinite number of parameter permutations to get there) So you $4m including house number seems pretty much on the mark. If you were 60 and had that it would result in a very robust lifestyle so long as the market doesn't become truly, abysmally awful. All calcs were done in real dollars.

[EV-Light]

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.

Non-sense, I love my work but it isn't my life. I would retire right now if I could and actually use my time doing everything I'd rather be doing than working....life is too short, spending 8-10h of your day at work is so sad!


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I don't think it's nonsense whatsoever, and I think you might be misunderstanding what NR is saying (or perhaps I am).  My work, whether it be my IT job, brewing, or detailing is not my life either.  If I was filthy rich, I'd have no issues never working again either, but in reality most of us have to work.  And since we have to work, do it doing something that you really enjoy and not count the hours until you're finished each day.  Going through life absolutely loathing what you're doing is a pretty sad state to be in, and I think that's what NR was eluding to.  But maybe I'm wrong.

Sorry it is still non-sense to me...most people from high school/friends that followed their 'dream' are in tons of debt and living pay check by pay check, doing exactly the opposite of what they thought they would be doing. They are still young like me, late 20s...and they may bounce back, but if they don't...there's a chance they might NEVER retire - not a very good outlook in my opinion.

Now...this doesn't mean I didn't learn how to love my job - which I really do. But also doesn't mean I'd rather be at home taking care of my cats, people I love, etc - because yes, they will - including us - all die one and call me selfish, but I truly prefer them over work.

[dougjp]

Crazy big numbers for cash needed, and still avoiding including income everyone will have (CPP and OAS), no reasons given for the exclusion.

Every financial planner seems to make at least one erroneous assumption before beginning. The first huge one is, having struggled to amass a huge bunch of debt free cash throughout a whole lifetime, suddenly you are not allowed to touch any of it, only the revenue it makes!     And then the next crazy assumption, you WILL live forever!     Crazy stuff, all wrong!

I won't get into personal details, but know because I'm doing it that it takes a fraction of these numbers to live well in retirement, including some travel, and I'm not even drawing down the principal much yet.

[mmret]

Every financial planner seems to make at least one erroneous assumption before beginning. The first huge one is, having struggled to amass a huge bunch of debt free cash throughout a whole lifetime, suddenly you are not allowed to touch any of it, only the revenue it makes!     And then the next crazy assumption, you WILL live forever!     Crazy stuff, all wrong!

Some of us like to have a large buffer. Remember, the future is very uncertain. I'd also like to have the flexibility before I die to make one last splash of money (whether kids, donation, giant platinum statue of self, etc.)

[rrocket]

 I'd also like to have the flexibility before I die to make one last splash of money (whether kids, donation, giant platinum statue of self, etc.)

Hopefully you'll be able to do that....that is if your profession doesn't sink the ship like they did in 2008....

[mmret]

 I'd also like to have the flexibility before I die to make one last splash of money (whether kids, donation, giant platinum statue of self, etc.)

Hopefully you'll be able to do that....that is if your profession doesn't sink the ship like they did in 2008....

Hey, you're lucky to have us around as a scapegoat for what was inevitable

[dougjp]

Every financial planner seems to make at least one erroneous assumption before beginning. The first huge one is, having struggled to amass a huge bunch of debt free cash throughout a whole lifetime, suddenly you are not allowed to touch any of it, only the revenue it makes!     And then the next crazy assumption, you WILL live forever!     Crazy stuff, all wrong!

Some of us like to have a large buffer. Remember, the future is very uncertain. I'd also like to have the flexibility before I die to make one last splash of money (whether kids, donation, giant platinum statue of self, etc.)

Good points when different requirements are factored in that change the picture. I'm just concerned that when a 50 year old with a mortgage and a car loan gets advice that he needs $ 3 or 4 million cash before he can retire, or even $ 2, its seldom going to be possible. So what ends up happening is he ends up dead at 75 while working at his desk, with a potful of unused cash. What a retirement he had! I just hope he didn't pay for that advice!

[tpl]

Crazy big numbers for cash needed, and still avoiding including income everyone will have (CPP and OAS), no reasons given for the exclusion.

Every financial planner seems to make at least one erroneous assumption before beginning. The first huge one is, having struggled to amass a huge bunch of debt free cash throughout a whole lifetime, suddenly you are not allowed to touch any of it, only the revenue it makes!     And then the next crazy assumption, you WILL live forever!     Crazy stuff, all wrong!

I won't get into personal details, but know because I'm doing it that it takes a fraction of these numbers to live well in retirement, including some travel, and I'm not even drawing down the principal much yet.

A big chunk of that debt free cash for most people will be the house and or cottage and the RRSP ( assisted by the government) or even the NPV of a defined benefit pension plan.    CPP and OAS are just the icing on the cake... and if you listen to Artic Steve they may not exist anyway 

As for drawing down the principal.  Many people wish to leave money to their children or to make a difference to something by leaving it to a specific cause.  In that case then being able to leave on the income is a good thing.

As for living forever...the trouble is that you might live much longer than you think...even after the Supreme Court decision.


As for your 50 year old, he will, one would hope, be in a position to save something and keep his job until 65, pay off the mortgage  and then be able to live  frugally perhaps but  not in poverty.

[Ex-airbalancer]

If you have a 2 mill in the bank , taking out $60,000 that is good for 33.3 years , that before interest on the money
add in CPP and OAS, that is a better good living

[wing]

Yeah except don't forget about inflation.  $60k sounds good today, but might be poverty line in 33 years from now.

[Ex-airbalancer]

Yeah except don't forget about inflation.  $60k sounds good today, but might be poverty line in 33 years from now.

I am looking at 5 years :
or if lotto max comes in comes in maybe sooner  :rofl2

[OliverD]

Yeah except don't forget about inflation.  $60k sounds good today, but might be poverty line in 33 years from now.

Hopefully your investment returns would combat inflation.

[johngenx]

We've got only one shot on this planet so why wish time away.

BINGO.

I know so many people that spend all of their time planning for some distance future - they don't really live their lives today.

[blotter]

But don't ever think that you can't start over.  I'm guessing that you're in your late 20s or early 30s, correct?  I was 40 when I decided follow my passion for brewing and build my brewery.  Never too late to do something you're passionate about.   

That's heart breaking and soul crushing. And you can start over...why do people think they can't?
It's the curse of the middle class to have been told by our parents to get a nice, secure job.

36...

I had debated for a while to go back to school.   However I set out on the wrong path long ago.
High school was a write off....  I just didn't care.   I always worked but never saved.   While my parents set me up on the concept of, you work for what you want... I did..  I always got what I wanted but lived pay to pay.    It wasn't until taking a year off school and worked 3 crappy job that I realized where I was headed.    In college I showed far more discipline since I was paying for it, I wanted to succeed. 
I followed my passion and it ended up being a dead end.   I've actually made the best of it.

I can't complain too much...  we're living the perfect middle class life.  House, cars, trips, bikes, etc..
moderate debt.   

The problem going back is that it would require a major lifestyle change which BOTH of us would need to agree on.  While I'd love to be doing something else, I do work for a great company, have good benefits and alright pay.    Replace that now a days even after going back to school would be a serious challenge.

So I could embark on major change, adjust our lifestyle, spend time and money in school but still come out no further ahead.   

I was 41 when I went back, again, to University.  I've known people 20yrs older that changed direction completely.

I think it's amazing you managed to take the risk, make the change and come out successful at it.

[wing]

School is overrated, you can do lots of stuff without school.

[blotter]

don't get me wrong, although I never imagined once that I'd work in the finance industry and if I could, I'd start over....   I mean, have my sh*t together way back in high school, have good grades, save money and do something I have a little more passion about.   

My wife thinks I'm crazy to even consider wanting to change... considering some of my above post.
I think everything job will come with it's down moments.    While there are certainly some parts of my job I do actually love... there are equally head shaking moments.    I'm also pretty good at what I do...
I've just about exceeded every year I've been here, so I'm valued.   

I think this goes hand in hand with another post earlier about expectations.
There are very few jobs out there which will be amazing 100% of the time.

[PJungnitsch]

There are very few jobs out there which will be amazing 100% of the time.

Very true. Most I've found have brutally hard moments, people that make you want to tear your hair out, etc.

Accepting a worthwhile life has a lot of hard and difficult times is the first step to really enjoying your time on earth.

[johngenx]

School is overrated, you can do lots of stuff without school.

Very true - but professions still demand the credentials - so in some cases it's a necessity.  There was a time when I enjoyed university for the sake of it, but not so much anymore.  The climate has changed in many faculties thanks to changes in funding models.

There are very few jobs out there which will be amazing 100% of the time.

True.  A friend of mine is a mountain guide, and one evening over beers I asked him about that.  He noted that when he's spending a day "checking knots" at the crag with beginner rock climbers, he's tempted to complain, then thinks "if this the price I have to pay for the rest of what I do, it's so small, it's almost ridiculous."

[Northernridge]

What are the universal things that make any job 'amazing'?

...Working to your particular strengths and passions
...The chance to do something great
...Freedom from mediocrity, management and morons

[Triple Bob]

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.

This.

I too love my job and I also live very close to work. I would be thankful if I could do this forever and just take multiple weeks off when I'm older. But, I know those who commute couple hours a day and don't even like the job they're commuting to. They take multiple vacations a year just to escape from their everyday lives.

These people are counting down the days to retirement. I just think that's a sad way to live - you never want to wish time away.

You have to remember that many of the people commenting on here and in the money thread are better off than others.  Mostly I would say through their own hard work, but there is also an element of luck, and family support.  It would be nice to be in a situation where everyone loved their jobs and only commuted a few km's, but that isn't reality for most, and for some that situation is very difficult to change.

Hard work and determination will get you far in life, but circumstances outside of your control can also be either a benefit, or a hindrance.